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.
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| 1930's style US Deflation or German hyperinflation? |
July 2020 performance
The Chicken Little Portfolio gained 0.14% in June 2020 while the Dow Jones Industrial Average gained 2.57% (the bounce since March 23 is the best since the 1930s).
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| Central Banks print with abandon |
July 2020 was a good month for financial risk-taking with gains of 2-10% across major asset classes. Year to date, the best investments remain the safety trades of Treasury bonds, gold, and cryptocurrencies.
August 2020 portfolio positions
Chicken Little remains mostly in cash, but has small positions in gold, crypto and Long-term US Treasuries. Chicken Little retains a small short position in US stocks.
What is the value of tiny positions? Possibly two purposes. First, the positions can become bigger - it is easier to add to winning positions than to initiate new positions. Second, even a small position increases one's focus.
The goal is to be in the correct position to be a buyer in The Depression. Buying requires both having capital to invest, but also being in touch enough with the market to be able to see the opportunity.
August 2020 portfolio positions
Chicken Little remains mostly in cash, but has small positions in gold, crypto and Long-term US Treasuries. Chicken Little retains a small short position in US stocks.
What is the value of tiny positions? Possibly two purposes. First, the positions can become bigger - it is easier to add to winning positions than to initiate new positions. Second, even a small position increases one's focus.
The goal is to be in the correct position to be a buyer in The Depression. Buying requires both having capital to invest, but also being in touch enough with the market to be able to see the opportunity.
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