Nvidia is the talk of the day, but as we discussed back in June, the stock was heavily overvalued. Therefore, none of my readers should have been caught off guard.
The bigger story is that semiconductors and AI have been the primary forces keeping the stock market afloat. Now, as we see some pullback, the media is suddenly flooded with stories of impending economic doom.
I can’t say I disagree, as we’ve been discussing this for months. However, I find it unhelpful to be bearish now that the market has eased back—especially when just last week, the same talking heads were giving us plenty of reasons to buy equities. But hey, such flip-flopping by the media is hardly surprising.
Speaking of flip-flopping, I see the crypto community is being urged to support the Kamala Harris campaign, as her stance on crypto has miraculously shifted in recent weeks.
I know I can be a bit cynical, but I think it’s worthwhile for people to pay attention to what’s happening in the UK. Labour won the election on a platform of vote-winning promises, yet sadly, every promise has been broken in less than two months. The mantra of “promises made, promises broken” seems to dominate today’s politics, and those who have spent their careers with their noses in the taxpayers’ trough are often the worst offenders.
Indeed, when Mark Cuban stated, “Trump was only supporting crypto so those involved can get richer,” it felt more like an endorsement of Trump than a criticism.
Overall, while I’ve held a BTC position for a few weeks, I’m uncertain about the outlook. Anyone with a long-term view on any financial asset at this point needs to be extremely cautious. None of us can confidently predict who the next President will be, and given the stark differences between the candidates, long-term market analysis is challenging.
That said, short-term opportunities are abundant for those who do their own research, and these opportunities should be seized.
I’ve avoided financials over the summer but maintained a bearish stance on equities, supported by a few put option trades that I still find attractive.
Over the past few months, I’ve been closely monitoring the commodity markets, and we’ve had some success going in and out of positions since April/May.
We bought a basket of commodities: copper, aluminium, wheat, and corn, a few weeks back, and immediately saw a good return on the metals. This week, the grains have rallied nicely.
I’ve taken some profits, but overall, I’m looking to increase my position on any pullbacks. I’m also considering adding soybeans if the price becomes attractive.
We haven’t ventured into the more fashionable energy products, as I suspected a pullback might be on the horizon. Last week, I mentioned buying crude below $60, and this still seems like a reasonable entry point, so for now I’m content to wait and watch.
We’ve now held physical gold for almost three years, and while I have no intention of selling, it’s satisfying to see a 30% appreciation since we bought it.
As we’ve discussed many times, we are living through an exceptionally interesting period, and the economic outlook has never been more challenging to analyze. However, for active speculators who trade a well-diversified portfolio and have the discipline to cut losses, there should be great opportunities in the coming months— provided you don’t shy away from trading on the short side.
That’s it for this short week. Labor Day was Monday, and as you read this, I’m on my way to Lisbon to meet up with the team at JPFS and SGT. It’s always great to exchange ideas with old friends face-to-face, and if it’s over a few beers, why not?
The post Have tech stocks calmed down yet? first appeared on JP Fund Services.
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