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Macro Chat
Macro Chat
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Weston NakamuraVisionary
Real Vision Exchange Manager, Programming and Community Engagement

Good question. Regarding commods, you’d have to distinguish between them. Finite ones like gold and maybe even to some extent crude (though not really- and wouldn’t WTI pricing from -$37 → $70 in a year be perhaps not “exponential“ but certainly non linear? I know thats a stupid one off example). For scarce/fixed supply commods with demand like gold should increase in price more or less mirroring the rate in which balance sheet expands. But for commods that you can literally plant and replicate, much less so, no fixed supply. Equities and crypto have fixed supply technically- in fact equities supply was shrinking due to buybacks, m&a, lack of IPOs until recently and that was certainly helping equities ↑. And for other commods, the US wouldn’t necessarily see commod prices ↑ in USD terms because much of it is domestic (energy, agriculture etc) so commods priced in USD wouldn’t see a material (or exponential scale) of change in value. Neither would the rest of the developed world as long as their respective central banks also continue to generally devalue (or appreciate) their respective currencies - not talking about a percent or 2 rate diff or like ECB is doing x-amount of QE and US is doing 1.2x-amount of QE if they’re all just doing trillions upon trillions- one might pull ahead of the other then drop back then ahead again, but they’re all speeding 300mph in the same direction. If you’re importing from the US and you have a horrendously... (More)

Wissam Ali
High Performance Computing Systems Engineer

Understanding which equity sector to invest in

I am posting here two charts from Bridgewater that explain how someone can allocate to equity sectors based on what you think the macro outlook is:

The chart above says the following:

  1. If you believe that we will not have rising rates of economic growth with no rising rates of inflation and ample liquidity, you should invest in Hi-Tech especially software. This is Raoul Pal's thesis.
  2. If you believe that we will have a rising rates of economic growth environment with inflation with no ample liquidity you should be investing in value stocks and the resource sector.

The charts above compares the performance of Tech in 2020 versus value and resource sector in 2021. In 2020 we had the first condition (point number 1) and in 2021 we had the second condition (point number 2).

As investors we need to determine which macro environment we will be in for the next few years. Is it point number 1 or point number 2? This gets tricky for two reasons: A) Government fiscal policy and B) The FED will never stop QE. Julian Brigden's thesis is centered on point number 2 due to fiscal policy and he also believes we will get yield curve control which is another way of saying shit loads of liquidity. In this environment you load your truck with commodities, gold and gold miners.

How this impacts Bitcoin I do not know. I am still trying to assess how the market is assessing bitcoin? If it is an... (More)

Friday's Daily Briefing extendo-jam (please?)

I've watched Friday's DB twice now and speaking as a relative noob, it feels like so much of the conceptual knowledge I've taken in since joining RV is playing out in real time. (i mean, it's always playing out, but there's this convergence across major macro components--dollar, bonds&yields, inflation, commodities, knock-on effects, sector interplay--that feels a bit different in my experience). Any chance @Jack Farley @Nick Correa could do a quick follow-up explainer video and unpack some of this one?

PT Home Depot Associate AMA; by the way, weekly sales for my store is 1.4mil MoM for 5 straight. (post any questions below)