July 2020, Chicken Little Portfolio Performance

Tom Segura, the Netflix comedian, says he has a new technique for arguing. He immediately switches to the other person's position. Such mental flexibility is extremely hard when it comes to investing. Six months ago, I changed from predicting a deflationary depression to predicting a depression that will probably be deflationary, but that might be inflationary. I continue to try to open my mind to the possibility of inflation by holding some gold and crypto. 

1930's style US Deflation or German hyperinflation? 

June 2020, Chicken Little Portfolio Performance

There is one central question in finance now. Can a country become rich by deficit spending and e-printing. The US government is running the largest deficit in history, and the Fed has monetized more than 100% of the additional debt. The government spends and the Fed prints. So far, the stock market has loved this combination. Chicken Little continues to believe debt and deficit lead to Depression.  

The US Government is hurting the economy 

Bear Bounce ending?

Chicken Little has a small short position on US stocks, betting that the stock market will go below the March 23, 2020 low of Dow 18,000. 

This is going to hurt

Economics, Biology, and The Search for Happiness

Economics and Happiness, Click here or image for academic article

May 2020, Chicken Little Portfolio Performance

On March 23, 2015 the Dow was just over 18,000. Five years later the Dow was almost exactly unchanged at 18,591. Stock market investors spent five years without making any money while bonds, gold, real estate, and crypto soared. Stocks were the worst investment. Amidst pandemic, people sold huge amounts of stock in March 2020. Then, the Dow rallied almost 40% in 9 weeks. Pain! Perhaps worse than the losses, is the fact that stock market may be teaching us the wrong lesson.  

Time to leave your equity wingman? 

April 2020, Chicken Little Portfolio Performance

Equity markets bounced 33% off their March 2020 lows. Chicken Little believes that the mother of all bear markets deserves a world class bear market rally. Broad economic pain cannot be stopped by government overspending and e-printing. Look out below. 

Bear Market bounce (click for video) 

Chicken Little's Criteria for Buying Stocks

When will it be time to buy stocks?  

From 1982 until 2000, I was at least 100% invested in stocks. My Chicken Little persona is temporary. I am looking forward to returning to 1980's style Mega Bull. In this post, I revisit the criteria for a major stock market buying opportunity from Mean Markets & Lizard Brains.

Chicken Little will become Mega Bull

March 2020, Chicken Little Portfolio Performance

The Covid-19 storm hit in 2020. The world was financially unprepared having squandered a decade of prosperity (see empty Rainy Day fund).  For example, in 1929 the US debt/GDP ratio was 16% of GDP; today US debt is 107% of GDP. Now, individuals will pay the price for government folly in multiple ways. 

The storm came and the government was unprepared

Is the Market Scared of Big US Deficits?

In the last two weeks, every asset has gone down. For sure, risky assets including stocks have gone down broadly this month, but the 'safety assets' of gold, bitcoin, and long-treasuries have also declined. I have long predicted that the end game of our current government folly will happen when the market cuts the US off from easy money (for example, HUGE deficits & Bond yields collapse).  We will see if the end game is here. 

The End Game will be rising Real Interest Rates

The Rainy Day Fund is Empty

The US economy has boomed for 11 years. The gains from that boom have been squandered, and we are not prepared for hard times. 

The Rainy Day fund is empty

February 2020, Chicken Little Portfolio Performance

Since 2015, Chicken Little was hiding in Treasury bonds fearing a Japanese/German style collapse in bond yields (see 'turning Japanese' for one of many articles).  Now that this nightmare of low US interest rates is a reality, what is next? First, the mother of all monetary bubbles, and then second, the imposition of discipline from the financial markets.

The bull market is built on e-printing and spending

January 2020, Chicken Little Portfolio Performance

If you need to hide 25% of your assets to avoid inflation or confiscation, do you have the tools? If not, a crypto beachhead might be a good idea.  Chicken Little has made three successful cryptocurrency raids (1, 2, 3). A raid is temporary by design. A beachhead, in contrast, is persistent and can be expanded. 

Chicken Little has established a crypto beachhead