Top Posts From 2016

Me at the beginning of 2016 versus me at the end of 2016. On the left is a man whose life is out of balance. He is missing something. He is estranged from his wife and kids, and it will take a cadre of terrorists for him to realize it. But once he does, he will emerge a stronger and better man. #BestChristmasMovieEver

Well it’s that time of year to recap the wonderful year that 2016. If you go back and read some of my earlier posts (and I kind of hope you don’t), you’ll notice a clear trend of growth, both in writing style and the quality of analysis.  My favorite post this year, although it certainly is not the best written, may be #3. Bulls on a Tightrope. It’s hard to face your fears whether in life or your portfolio, but writing that post was incredibly cathartic and launched what I believe was the next step in my journey to becoming a better investor. I want to thank all of my readers for the best year I could have hoped for. Passive investing be damned, it’s time to ride this momentum into 2017!

6. It’s A Trap! 

ackbar
“Although we are likely in the blow off top phase of US equities, the duration and magnitude of this phase will be dampened due to the abnormally high amount of foreign land mines just waiting for the Fed to step on. If the typical blow off top phase is 18 months, we maybe have 9-12 months which started in early November. I remain open to other possibilities but until new information comes to light, I leave the last word to Admiral Ackbar.”


5. WTF Is Going On At The BOJ

haruhiko-kuroda-boj-japan-interest-rates“But given said speculation and the Yen’s refusal to go higher, it’s quite possible USDJPY is bottoming here at the 100 level which just so happens to be the 50% retracement of the 2012-2015 move. As demonstrated multiple times through out this post, I have my doubts, but it is best to remain open near such key inflection points.”


4. The Case For Higher Interest Rates: Setting The Stage For The Next Crisis

“Speaking of unintended consequences, imagine you are a yield starved Japanese investor whose interest rates have been pinned to floor. Your own central bank has practically outlawed interest rates. Your currency has already started to fall against the US dollar which now offers a much higher rate of return. Would you hold that worthless government paper if US 10-year interest rate rose to 3%? The BOJ seems to be on the verge of monetizing a lot more bonds than it originally signed up for.”

3. Bulls on a Tightrope
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“Higher than expected inflation would kill my long us treasury and cash positions. Higher than expected EM demand coupled with a re-surging US economy would kill my short US equities and Canadian banks positions. Hard to say what would happen to gold, but if fears of a global recession faded the price of the yellow metal could take a heavy hit.

Needless to say, in a 6 months my portfolio could go from looking near genius to incomprehensibly stupid, and that is exactly why I decided to discuss the bull case today. Fear is a powerful motivator, and one should never be fully comfortable with their positions.”


2. Predictions For 2017: Shit Escalatesscreen-shot-2016-12-23-at-3-44-54-pm
“I think Inflationary pressures originating primarily in China with help from OPEC are quite likely to ripple through the global economy, catching investors and central banks off guard. This inflation surprise should destabilize markets in ways that even the great and powerful Klendathu Capitalist cannot predict (see prediction #10.).

I would argue that those inflationary pressures have already done tremendous damage to the US economy where the US consumer was already suffering under immense pressure from stagnant wages and rising energy and healthcare costs. Unable to provide additional dollar liquidity to the rest of the world, the global economy will slow and the dollar will begin the next leg higher in its bull market”


1. Lithium: Late To The Party But It’s Only Just Begunuyuni1-peteuniverse“Between Elon Musk promising to consume the world’s current production of lithium ion batteries and China pretty much outlawing internal combustion engines by the year 2020 lithium demand is set to take off. Just last year Chinese sales of Electric Vehicles (EVs) increased 223% and a 4 fold increase from 2014.”

 

 

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