By now, it’s clear that the world is aware of the changing dynamics in growth prospects for the global economy. After twelve years (2009-2021), where the world’s largest economy was growing very slowly, the millennials and Gen Z demographics are now generating organic growth in the economy. Lowering rates artificially isn’t needed anymore to overcome the demographics cliff.
These age groups, now comprising over one-third of the country’s inhabitants, are searching for better jobs, newer homes, a wife/husband, having children and moving into adulthood.
They’re going to be responsible for generating higher income tax receipts, servicing the interest payments on the national debt, creating real jobs and incorporating new businesses and shaping the future of America.
TECH WRECK: THE TRUTH
- Dominance: Despite calls for the end of the tech sector, as the leading one, before all others, we don’t think that big tech is going to struggle or languish.
We do think emerging tech (the hype bubble that was rampant and prevalent for years) is over!
Investors are waking up to the fact that real growth is happening, so there’s no need to grasp for straws and pay earnings multiples that make no real-world sense for the few businesses that are “going to change the world.”
- Interest Rates: Don’t kid yourself that something like the 1970’s is coming.
Rates might continue to go up, but nothing like what the inflationists keep harping on.
As opposed to that period, when America was the creditor for the rest of the world, today it’s the empire of debt. Any rise in Treasury yields is a severe drag on Washington’s ability to balance the books.
The CBO (Congressional Budget Office) calculated a record-breaking $9.7tn to the deficit until 2030, if rates just creep up by 1.00%.
The bonds bull market, which began in 1982 and lasted nearly 40 years, is over.
I’ve been active this past week, adding to existing positions, entering new ones and planning my entrance into a number of core positions!
The first part of the “buy low, sell higher” sentence mandates, by definition, that one acts when the panic spreads.
PORTFOLIO UPDATES: MARCH 2021
- Adding cash – I literally built a cash position, equivalent to 30% of the overall portfolio.
In two to three years, you’ll look back at March 2021 and ask yourself why you didn’t buy more.
- Solar Energy – My two favorite companies, SolarEdge (SEDG) and Enphase (ENPH) have finally come down a lot.
They’ve been on our Watch Lists for years and I’ve been buying.
- Expensive Tech – I want to take advantage of the balloon deflating and enter into positions, which were so illogically priced thus far that it made no sense.
Therefore, in accordance with our Watch Lists, I entered into positions in BigEcommerce (BIGC), Collective Growth (CGRO), Corsair Gaming (CRSR) and Protalix (PLX).
Each holding represents 1% to 1.5% of the portfolio.
- Major New Positions – In the next four weeks, we will be revealing two of the highest-conviction speculative holdings in our company’s history.
In order to sell higher, one is forced, by mandate, to buy cheap.
Remember this is the Bible of real investors.
With gold, the bottom is probably within reach. The panic that tightening is coming has been fully discussed by the FED; it’s not planned!
Gold has fallen by close to 20% since August 2020; it’s in the safe zone.