October 25, 2019 Tom Linzmeier
For the USA stock market to rally, we need to see a couple of things:
- Interest rates need to RISE, not fall. Falling interest rates at this point are not stimulating the economy. Banks need a spread between short term deposit rates and long term lending rates. Companies and Companies need a signal that the economy is growing to stimulate cap-X and expansion. If they see a no growth or contracting economy, corporations will sit on cash until there is a reason to put their cash back to work.
WATCH FOR RISING RATES TO BECOME BULLISH
- Settle the Cold war with China. This is unlikely on a longer-term basis. China has never been one that can be trusted. It seems The USA has awoken to that fact. Even near-term settlements will require a long time of testing. We are not going back to the old days. Elizabeth Warren will be harder of China than The Trump administration. Tulsi Gabbart is an America First person. She is anti-war but a devoted American Focused Loyalist that will put American interests first. There is distrust of China in the general population with plenty of evidence to back that up.
SUMMARY: There is more that can go wrong than can go right at this time. Be defensive but not fearful.
Our investment Theme is to focus in the following areas:
- Gold Silver and precious metal Miners. Favorites include GORO* $4.05, PAAS $16.20 and very speculative RNKLF* $0.29.
- Large cap, out of favor, value companies that pay a nice dividend (example: XOM $69.00)
- Short term Muni’s from healthy states and cities
- Cash and near-term treasuries
- Emerging markets: Features we like – without US$ denominated debt, trade surplus and banks paying a decent interest rate on deposits. Vietnam is among the best: One year bank deposits are above 6%. Inflation is about 4%. The country is energy independent and has a trade surplus. Little of its debt, is US$ denominated. GDP is growing close to 7% annually. Demographics are favorable. 70% is under 35, Educated and highly motivated. Certainly Vietnam has problems, but solvable Vs many others. Having said that as an example, you will likely be better off selecting an broad country Emerging Market ETF or fund. In this arena, we like SE Asian based funds. South Korea, Japan, Thailand, Malaysia, Vietnam, Philippines and Indonesia stand out. So. Korea and Japan are included because they are aggressively expanding and investing into the others.
- Europe seems to be coming out of its funk. Country funds or ETF’s that look very interesting; Germany, England & France top the list.
- Five to ten percent in bearish short selling funds like GRZZY* $15.63 or HDGE* $6.38
Thomas Linzmeier: A retired career stockbroker, author, national speaker/educator, investment newsletter editor and art collector. Strong interest in value, turnarounds, emerging growth stocks, emerging markets with a special focus on Vietnam. A Vietnam war veteran, Tom lives 70/30 between Vietnam and USA.
Access Vietnam Group, LLC is a business networking group, connecting business opportunities and Investing between the USA and Vietnam.
It is very easy to open a brokerage account in Vietnam for Foreigners. Like the USA, a physical presence in Vietnam is required to open an account. The process might take a couple hours, but after that you can trade from anywhere in the world.
