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Updated: Oct 31, 2023

On the Market, The Nasdaq has shed a quick -8% from its high (peak to trough this 12%), and Apple's US$235bn market-cap pullback is bigger than the worth of 480 of the 500 companies in the S&P 500. This pullback raises the possibility of a VIX discomfort level.

While the company never seems to end a year with a profit and sells just a tenth of the cars sold by GM, its current market cap is ten times higher. This means, investors are betting on

skyrocketing growth for Tesla, which often proves to be more the result of sentiment rather than logic. When sentiment deteriorates, and money becomes more valuable, investors look for the safety offered by stable cash flows and profits, moderate leverage levels, and reasonable growth prospects.

By that time, the tangible present becomes a lot more valuable than the intangible.

Nutstuff has owned both.

Right now the key questions to me are...

1.How long can the tech-led outperformance of US equities endure?

2.Is there anything worth buying in the fixed-income market?

3.Is gold in a sustained rally or a speculative bubble?

4.How much further can the dollar fall, and against which currencies?

5.Does the Federal Reserve's embrace of seemingly permanent low rates and more tolerance of inflation mean that the basic rules that have guided portfolio management for the past several decades need to be thrown out? 60:40 etc?

My responses with help from MM and BB are:

1. Years

2. Loads (LED AA)

3. No view

4. Q1 $ rally Q2-Q3 $ fall

5. FED “IOC” like BOJ

So; Maximize duration Maximise spread, Maximize diversification.

Significant spread compressions are to take place. Significant compression of VOL to take place.

Leading sectors happened to be mainly growth stocks for good reasons; with significant

increases in revenues and benefiting most from the rallying interest rate structure.

In other words private sector GHC 2020 drove rapid revenues to these companies. Public

sector GHC 2020 responses coincidentally benefited growth more than laggards.

So, the “value trade” depends on two factors into 2021 and beyond: local & global immunisation from vaccines and the reset/rebound in economic activity. Will aggregate demand be V, U, L ? Political risk in near term depends on WH outcome as Trump “growth rate” double the pace of prior Biden period post GFC. How can you spot laggards capturing performance during rest of 2020 and into 2021 ?

Watch underperforming FX, commodity and equity markets like a hawk. For example, EM FX, UK stocks, and OIL.

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To Nutstuff again this is a giant and very serious game of WHACK-A-MOLE, as the UK continues to take action against economic threats: First against Global; Mountain 1: commodity price inflation and n

More Bullish Than Consensus!

Yes, it is very clear how concentrated alpha in markets is. It’s the best excuse for underperformance I guess. If stock picking ever mattered it is now...Without FAANGMAT, “AI” Luxury and half a dozen

Duck hunting without a saxophone!

What we are seeing clearly now is the US trying hard to goad China in Taiwan, a diversionary tactic or a new game to play from the Washington bunkers. I suspect Xi plays the calm and longer game here.


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