In spite of the obvious differences betewen the Soviet and U.S. economies there are disconcerting parallels between the systemic roots of their respective crises (USSR in 1980s and USA today).USSR's stalling GDP growth, growing 'defence' budget and balooning budget deficits ultimately led to currency debasement and high inflation. There's every likelihood that U.S. dollar will … Continue reading Inflation: lessons from last empire’s collapse
In my April report I suggested that effective trend following required discipline and a good deal of patience. In this report we discuss the strategy’s proper objective, which leads compellingly to the conclusion articulated in this article's title. We are after outsized, long-term windfalls Many individual traders obsess over short term gains or even day … Continue reading Market trends are the most potent driver of long-term investment performance
Spending time looking at economic data releases or focusing on corporate earnings is a colossal waste of timeDavid Zervos, MD, Jefferies Over the years I’d written many articles suggesting that price forecasting based on market fundamentals is a waste of time – if not something worse. In polite society, this is not a popular claim, … Continue reading Trend following is the only valid answer to the problem of uncertainty
In March 2019, I published an article looking at historical perspective on boom/bust cycles in SeekingAlpha. I suggested then that, “the (still) festering economic imbalances might get resolved along two alternative scenarios. Either we’ll have a full-blown deflationary depression that could see asset prices drop by 50% or more, or we’ll have a strong and … Continue reading Bear market or bubble reflation: what comes next?
Lately I got into arguments about the proper role of hedging with some individuslas who, I thought, should know better. Their belief, essentially, is that operative businesses - mining firms, oil&gas producers, airlines... - should always hedge their price exposure and focus on generating value on their operations. In other words, ignore the price of … Continue reading Why hedging is key!