Thread by @JonahLupton

50% of my portfolio is now in international stocks and here’s why...

With the US elections just 10 weeks away I’ve already started repositioning my portfolio for different outcomes.

The four outcomes I have to consider:
1) Trump wins, Republicans keep Senate
2) Biden wins, Republicans keep Senate
3) Trump wins, Democrats take Senate
4) Biden wins, Democrats take Senate

With no clear front runner in the Presidential election it will remain an unknown risk. Trump or Biden in the White House along with what happens in the Senate will determine many factors that impact our economy and stock markets including taxes, cap gains, fiscal spending, etc.

Large investors will look to reduce their equity risk going into the election by doing some of the following:
1) selling equities and sitting in cash
2) rotating out of higher beta stocks into safer stocks/sectors
3) buying puts for protection
4) buying international stocks

I want to focus on #4

The upcoming elections are just one of the many issues we are facing. We still have a health pandemic. We still have 15+ million people unemployed/underemployed. We still have more bankruptcies and commercial loan defaults on the horizon.

I believe the smartest investors will begin allocating a larger percentage of their funds/portfolios to high quality international equities.

With that said I restarted a position this morning in $MELI and tripled my position in $PDD.

$MELI (South America) and $PDD (China) are two of the fastest growing companies on the planet so it’s no surprise they are both dominating in e-commerce and payments.

$SE (Singapore) is already my second largest position and hit a new all time high today.

To be honest I don’t love the current state of our country or our economy.

On top of that it’s very possible we have a contested election and another onslaught of riots and protests. I would not want to be living in a city in November because I fear things could get ugly.

With regards to the economy, I believe the rebound of the stock market has fooled many of us into thinking things are not that bad.

Under the surface I believe there’s been a lot of damage done with a lot of zombie companies propped up by different forms of stimulus.

At some point these problems and zombie companies need to be dealt with. There’s a good possibility the economic rebound will not be as strong as we’d like it to be. I fear employers will be slow to rehire workers. I fear we could see millions of small businesses disappear.

I hope we get a raging economy in 2021 and 2022 but it feels like there’s a lot of cracks in the foundation and I’m not sure low interest rates, more stimulus and a strong stock market will be enough to prevent a prolonged economic slowdown.

Considering all of this, I’ve already allocated 50% of my portfolio to international growth stocks which includes $SE $MELI $PDD $BABA $API

$API is a Chinese cloud company growing at 120% YoY

I’m looking at several other international companies but the 5 mentioned above are my favorites and should have tremendous growth for the next decade.