What’s Working?
- Uranium hit nine-year highs this week.
- Nat Gas hit seven-year highs this week.
- Gold and silver bottomed in May/June are indicating higher prices into the seasonally strong next four months.
- Short-term (one to five year) Treasuries are rising and in good demand.
Summary: Precious metals and short-term treasuries are risk off trades and seemingly attracting risk off money from equities and long term bonds.
What’s Not Working?
- Chinese tech stocks are weak and a tempting buy, but Evergrande (biggest land developer in China) will not meet its debt obligations. Is this the 2008, “Leman Brothers moment” for China? Chinese government has warned banks that Evergrande will not make their payments. Who else is next in China’s, Government controlled / Cronyism rewarded partner system? No one knows.
- USA stock market has been in a correction since last February / March. A few big names + energy is keeping the averages looking good, but price momentum is falling for many companies.
- Passive investors in ETF’s should be on alert and “not passive”. Have your exit strategy decided and ready to execute. Ray Dalio, founder of the largest hedge fund in the world, Bridgewater, has sold half his S&P 500 ETF and rotated into big name brands, through individual stocks. He also bought Gold and Crypto.
- Real Estate in USA: The annual price growth rate has slowed for the fourth month in a row. The annual median home price growth rate in July was 10.3 percent, down from 12.7 percent in June. In comparison to previous year, large metros witnessed an average price increase of 3.5 percent. Price rise in the country’s major metros is slowing somewhat quicker than in the rest of the country. LOTM: We may be seeing the inflection point where low interest rates and high prices have reach their extremes.
Summary: Equities have had a 12 year great run. Perhaps the best ever in history. Money seems to be growing more defensive by professionals. We suggest Income stocks, Commodity stocks, Value stocks above pure Growth stocks unless the growth is exceeding the current valuation. Know your company!
What about Crypto?
Crypto is heading into a seasonally strong period. Higher prices are anticipated. They are not cheap on an alt-coin basis, but it’s so early in the game, use the downside volatility to accumulate. Be greedy when other are fearful! Crypto is displacing such traditional institutions such as banks, brokers, title companies, insurance companies and mortgage companies. Use the Volatility as a tool to build your crypto asset base. The Upside is massive over time. I have reached the decision level that they are the very fast and evolving future – you have to own crypto. The best way to buy crypto is to accumulate through dollar-cost-averaging. So, I do not see crypto as, “risk on” or “risk off” trade, but as an exciting new adventure where everything is going.
Features LOTM looks for in Alt-coins:
- What does the Protocol do?
- How big is the user Network for the Protocol to expand into?
- Limited or unlimited supply of coins (dilution effect)?
- Who are the developers?
- Who are the financers behind the developers?
Top Alt-coins to consider:
Bitcoin* /Ethereum*/Cardano*/ Solana /Avalanche* /Terra Luna/ Cosmos Polygon /Uniswap /Polkadot*/CELO*/ AAVE/ Chainlink*
It is an exciting time for mass creation of “the new” with destruction of “the old” and governments cannot keep up. Wild West opportunity and risks.
Sept. 16, 2021 – by Tom Linzmeier, editor LivingOffTheMarket.com
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* An account related to LOTM holds a position in this security.
Neither LOTM nor Tom Linzmeier is a Registered Investment Advisor.
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