12-02-2022, 07:45 PM
I called Powell's bluff (an update)
<!-- SC_OFF --><div class="md"><p><a href="https://www.reddit.com/r/investing/comments/pwvway/the_great_market_wheeze_is_almost_upon_us/">The Great Market Wheeze is almost upon us</a></p> <p>I predicted the crash in September 2021 due to higher-than-expected inflation pushing up bond yields and down stock multiples. I advised: cash, shorting bonds, emerging market and defensive dividend stocks.</p> <p><a href="https://www.reddit.com/r/investing/comments/utf65p/im_calling_powells_bluff/">I'm calling Powell's bluff</a></p> <p>Then in May 2022 I called 3,700 the fair price for the S&P (anything below a steal), upcoming softer-than-expected inflation data leading to a fed pivot. I advised: hypergrowth stocks like Shopify.</p> <p>Shopify is up 19% since that call, the Russel 2000 is up over 6% as growth rallies with turning inflation and economic outlook.</p> <h1>> The Response</h1> <p>First here's what people had to say back in May about inflation turning, growth stocks oversold and fed pivoting end of year:</p> <blockquote> <p>Narrator: "He was, in fact, not on the money." </p> <p>This is gonna be so horribly off the mark it's going to be hilarious. Can't wait to come back here a year from now </p> <p>Oh man those stocks are junk. </p> <p>The Shopify "anything below $300 is a steal"' is funny when shopifys pe is rn still above 300. Its gonns steal your money yes. </p> <p>hypergrowth is far from oversold. We have a very long way to go </p> <p>Market has entered the bear market and is going to meltdown well into 2023. I'm 75% cash and going to buy up big time near the bottom </p> <p>"Emerging markets" are about to suffer through the worst famine in our lifetimes. I'm not clear that is going to lead to market outperformance over the next year.</p> </blockquote> <p>​</p> <h1>> What To Do Now</h1> <p>Buy hyper growth like $SHOP.</p> <p>The stocks that were hit hardest on deep recession fears and rising rates will do the best when the opposite happens. Much like how quantitative easing, direct financial stimulus, closing manufacturing and lowering rates increased inflation - and then when we did the opposite it decreased inflation (?).</p> <p>Shopify is a great business that I have the scoop on.</p> <p>These are my top picks for the current environment:</p> <ul> <li>Shopify ($SHOP)</li> <li>Sartorious (SRT.DE)</li> <li>Emerging Market Local Currency Bond ETF ($EMLC)</li> <li>Daikin ($DKILY)</li> </ul> <p>​</p> <p>Here’s a more fun play.</p> <p>Covered call ETFs sell covered calls and pay out the premium as dividends. The more volatility the more you get paid.</p> <p>One I like is $JEPQ. It's an actively managed covered call ETF on tech stocks. It currently has an SEC dividend yield of 19.9%. You get some of the asset appreciation as tech recovers, but I also think there will be an extended period of chop ahead as the fed remains stricter than normal and mixed inflation data comes out. This allows me to profit from both.</p> <p>I'm taking a position on 4x leverage. At the current yield that's an 80% dividend/year minus margin interest. As the dividends are paid out my position becomes less and less risky, after a year my 4x leverage position will be only 2.2x leverage if dividend yields remain this high. The dividends will be rolled into more growth stocks.</p> <p>The dividends on $JEPQ will likely not remain this high forever, but you get the idea.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/ini0n"> /u/ini0n </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/z9zho3/i_called_powells_bluff_an_update/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/z9zho3/i_called_powells_bluff_an_update/">[comments]</a></span>
<!-- SC_OFF --><div class="md"><p><a href="https://www.reddit.com/r/investing/comments/pwvway/the_great_market_wheeze_is_almost_upon_us/">The Great Market Wheeze is almost upon us</a></p> <p>I predicted the crash in September 2021 due to higher-than-expected inflation pushing up bond yields and down stock multiples. I advised: cash, shorting bonds, emerging market and defensive dividend stocks.</p> <p><a href="https://www.reddit.com/r/investing/comments/utf65p/im_calling_powells_bluff/">I'm calling Powell's bluff</a></p> <p>Then in May 2022 I called 3,700 the fair price for the S&P (anything below a steal), upcoming softer-than-expected inflation data leading to a fed pivot. I advised: hypergrowth stocks like Shopify.</p> <p>Shopify is up 19% since that call, the Russel 2000 is up over 6% as growth rallies with turning inflation and economic outlook.</p> <h1>> The Response</h1> <p>First here's what people had to say back in May about inflation turning, growth stocks oversold and fed pivoting end of year:</p> <blockquote> <p>Narrator: "He was, in fact, not on the money." </p> <p>This is gonna be so horribly off the mark it's going to be hilarious. Can't wait to come back here a year from now </p> <p>Oh man those stocks are junk. </p> <p>The Shopify "anything below $300 is a steal"' is funny when shopifys pe is rn still above 300. Its gonns steal your money yes. </p> <p>hypergrowth is far from oversold. We have a very long way to go </p> <p>Market has entered the bear market and is going to meltdown well into 2023. I'm 75% cash and going to buy up big time near the bottom </p> <p>"Emerging markets" are about to suffer through the worst famine in our lifetimes. I'm not clear that is going to lead to market outperformance over the next year.</p> </blockquote> <p>​</p> <h1>> What To Do Now</h1> <p>Buy hyper growth like $SHOP.</p> <p>The stocks that were hit hardest on deep recession fears and rising rates will do the best when the opposite happens. Much like how quantitative easing, direct financial stimulus, closing manufacturing and lowering rates increased inflation - and then when we did the opposite it decreased inflation (?).</p> <p>Shopify is a great business that I have the scoop on.</p> <p>These are my top picks for the current environment:</p> <ul> <li>Shopify ($SHOP)</li> <li>Sartorious (SRT.DE)</li> <li>Emerging Market Local Currency Bond ETF ($EMLC)</li> <li>Daikin ($DKILY)</li> </ul> <p>​</p> <p>Here’s a more fun play.</p> <p>Covered call ETFs sell covered calls and pay out the premium as dividends. The more volatility the more you get paid.</p> <p>One I like is $JEPQ. It's an actively managed covered call ETF on tech stocks. It currently has an SEC dividend yield of 19.9%. You get some of the asset appreciation as tech recovers, but I also think there will be an extended period of chop ahead as the fed remains stricter than normal and mixed inflation data comes out. This allows me to profit from both.</p> <p>I'm taking a position on 4x leverage. At the current yield that's an 80% dividend/year minus margin interest. As the dividends are paid out my position becomes less and less risky, after a year my 4x leverage position will be only 2.2x leverage if dividend yields remain this high. The dividends will be rolled into more growth stocks.</p> <p>The dividends on $JEPQ will likely not remain this high forever, but you get the idea.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/ini0n"> /u/ini0n </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/z9zho3/i_called_powells_bluff_an_update/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/z9zho3/i_called_powells_bluff_an_update/">[comments]</a></span>