Thread by @Melendhar

END OF YEAR Portfolio Update (December)

Up +23% YtD

Positions from largest to smallest:
Cash & #GACB > #PSN > #THS > #HBR < #GKP

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https://twitter.com/Melendhar/status/1599733320761233409

Performance vs Expectations

I have hit my personal target & Im very pleased considering market conditions & my long term assumption that US will correct back to historical valuation averages.

I was early, but luckily on the right side of the trade

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https://twitter.com/Melendhar/status/1488454355883864064?s=20&t=D3cvcJSm1ahIbkPmCGcsyw

This thread will be written in stages as there is still a technical issue with Twitter it seems and the scroll down bar doesnt work on mozilla?, so I cant tweet more than a few tweets at at a time. Discouraging and annoying, but i will try my best to keep writing this thread

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Lets cut to the chase - 2023 outlook

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SUMMARY

Uncertainty remains high. That being said, lets all remember that markets are forward looking & outlook for 2024 and beyond is VERY OPTIMISTIC imho. World coming out of recession, wars ending, energy stability, diversification form USD & China.

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There is only one landmine somewhere on the path to a bull market - recession.
2023 will be a game of chicken between bears and bulls. Fed will reach its terminal rate, we have the recession, both known factors - the unknown being US-China relations.

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At some point this year the positive long term outlook will take over & afterwards the rallies will be spectacular imho.
What makes things a bit harder is that we havent seen a crash similar to what has always happened in the past.

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Its likely ahead of us, but it will be determined by earnings reports. Recent consumer data suggests that things are not as bad as presented on Fintwit.
I will repeat this - we are in a very news receptive environment wit ha lot of uncertainty.

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No such thing as "hard predictions" for all of 2023. One piece of news can turn everything around by 180 degree. You want to follow key financial data very closely. Worth learning a bit about macro if you havent already.

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Precious Metals

➡consensus remains the same- bullish. I have my doubts
➡️increasing global stability (Ukraine war ending?)
➡️inflation taking a sharp hit (disinflation/deflation)
➡️interest rates likely to remain as high as they are

Not the best environment for gold imho

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Once deflation/disinflation gets priced in & combined with 2024 outlook of lower interest rates (many still expect FED to lower them this year, this mistake might cost them dearly) there might be a time later in 2023 very good for buying PM, but I dont think we are there yet

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Industrial Metals

➡️Reopening & stimulus of the chinese economy remain an unknown
➡️Recessionary worries remain
➡️Likely to have a strong quarter, AFTER recession gets priced in into the markets
➡️Cautiously optimistic for late 2023 and 2024

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Oil & Gas

➡️Volatility extreme imho
➡️Usually dips by a lot at the late stages of a recession
➡️A lot will depend on the war with Russia & China
➡️Europe to refill gas reserves without Russias help for the first time?
➡️Energy prices affect all industries - domino effect

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US tech

➡️Disinflation/deflation will potentially make this a very interesting sector in late 2023
➡️Valuations have come down to much more reasonable levels
➡️Currently fixed income offers a better risk/reward profile (capital outflows)

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Housing sector

➡️Media & analysts in US/EU/UK predicting massive corrections
➡️Consensus outlook not in line with reality imho, overly pessimistic
➡️Housebuilders offer good risk/reward imho (2y+ outlook)

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Chinese / EM equities

➡️Big gains to be made in chinese equities IF no military escalations take place with West
➡️Outside of political issues, Brazilian equities look decent
➡️Diversification away from China = opportunity for all of Africa, Brazil & some other EM

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Crypto

➡️#Btc will likely continue to follow US tech trajectory
➡️I expect 2024 to be a good year for crypto, 2023 not necessarily
➡️Potential opportunities for good cherry pickers with a 1+ year time horizon, but damn high risk
➡️Regulatory changes due to mass fraud etc

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Fixed Income / UST

➡️Market liquidity likely to decrease further caused by capital INFLOWS into UST
➡️High yields, small risk = better rewards than equities/PM imho (for most)
➡️In case of UST FX factor/risk of USD not discussed AT ALL on fintwit

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Important themes to be watched in 2023

➡️Enrollment of CBDC's - pushed by globalistic agendas & a huge danger imho.

Random article (havent verified)
cato.org/blog/central-b…

➡️De-dollarization of the non western world
➡️De-globalisation (away from China)

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FINTWIT

Anyone noticed how vivid Fintwit was in the midsts of the last bull market.. compared to now? Its been a LONG WHILE since Ive seen someone posting most of their buys/sells live. Interactions have als come down rapidly unless you are pumping the latest AIM shitco

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I will be opening a seperate account where i will post my live trades. It will be locked & available only to a handful of people. Havent decided on the criteria yet. Maybe only those who interact (in any kind of way) with my tweets. Im not interested in silent observers

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The trade content will be available at the end of each month, during my updates for all to see in retrospective, for transparity mainly. I think this is also needed to separate important content from the less relevant daily trading, to not overly swamp my wall with buy/sells

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END POINTS

I dont expect much to change in my stratedy in the first months of '23

That basically means walking slowly (being mostly in cash) trying to spot the earlier mentioned landmine (recession) & increasing the pace afterwards (recession priced in/no other disturbing

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developments = deploying capital). Short term trading in quality companies the meantime.

What I wish to all my friends & followers on Fintwit (and myself) is a lot more sunshine & positivity, as I know that 2022 wasnt the easiest year for most.

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