May 2019, Chicken Little Portfolio Performance

The Chicken Little Portfolio had its best month so far in May 2019, earning over 5% while the macroeconomic storm builds toward an economic depression. Recall that in April, Chicken Little shorted Tesla and bought crypto (click for article). These April decisions brought May flowers. Bitcoin returned 60% in May, while Tesla lost 22%. 

Are you ready THE DEPRESSION?

May 2019 performance

The Chicken Little Portfolio gained 5.35% in May while the Dow Jones Industrial Average lost 5.76%  

May 2019YTD 2019
Chicken Little5.35%7.25%
Dow Jones Industrials-5.76%7.39%

Chicken Little was well-positioned in May 2019. Stocks went down by about 6% around the world, and Chicken Little owned zero stocks. Long-term treasuries soared by over 6% and Chicken Little was heavily invested. As noted, Chicken Little enjoyed huge positive returns from owning bitcoin and from being short Tesla.

AssetSymbolMay 2019YTD 2019
Dow Jones IndustrialsDIA-5.76%7.39%
Non-US StocksEFA-4.49%7.86%
Emerging Market StocksEEM-6.63%4.22%
US Long-Term BondsTLT6.57%9.37%

The US is in the middle of a debt crisis. Total US debt now exceeds $22 Trillion, rising at a rate of more than $1 Trillion per year over the last decade. 

Trillion dollar deficits will look small soon

Our huge debt levels are well-known. What is less well-known, and absolutely, amazing, is that our debt and deficit are at historical levels in spite of three important factors that should be keeping debt down. 
Elvis made $6 million one year and spent $7 million

1) We are not (yet) in the middle of a large-scale war. Historically, the US government ran large deficits only during wars. 

2) The unemployment rate is very low. 

3) The interest rate paid by the government is low. 

Elvis reportedly made $6 mn in one year, and went more into debt by spending $7 million.  Similarly, the US is building enormous deficits when we should be stocking up our rainy day fund. When it does rain, in the form of a war, a recession, and/or rising interest rates, the crisis will strike in full force. 

June 2019 portfolio positions

Chicken Little remains positioned for a depression by owning cash and Treasuries. Chicken Little remains long bitcoin and other cryptocurrencies and is still short Tesla. Chicken Little cut both the crypto and Tesla positions in half in May. That means selling half the crypto, and buying back half the short position in Tesla.

Chicken Little bought bitcoin a little under $5,000 in April, and the current price is $8,500. Because of the huge increase in price, the Chicken Little crypto currency position remains almost as large at it was a month ago even after having sold half of the coin. 

Chicken Little is planning to re-commence broader bear market operations by shorting the stock market at the correct time.

Previous month's report                 Subsequent Month's report

Chicken LittleDow Jones Industrials
2019 (through May)7.25%7.39%
2015 (April through Dec)-2.49%-0.27%
since inception (3/31/15)8.62%53.02%

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