Ronald Stöferle talks to Charlotte McLeod from Investing News Network (INN) to talk about the current situation of gold as well as silver. They discuss the current situation regarding the FED and rake hikes, the effects of the Ukraine/Russia conflict as well as the mining sector.
Good Morning Ladies and Gentlemen,
The Prussian general and military theorist Carl von Clausewitz once said: “The greatest enemy of a good plan is the dream of a perfect plan.”
In my last weekly, I asked you to share your thoughts on the current political crisis, and I also asked how you would invest your money in a situation of such great political tension. I received many emails. Thank you very much for all your messages, comments, charts, videos and links.
Many people rightly pointed out that gold was doing its job as a hedge against a crisis. This is true; gold performed very well and decorrelated against the large indices this year, and as one would expect, yesterday during the bounce in the U.S. markets, profit-taking in gold was setting in. On the other side of the spectrum, we had Bitcoin disappointing. No decorrelation to the large indices whatsoever. On the contrary, Bitcoin correlates strongly with the S&P; instead of a hedge, it looks more like a proxy, a proxy on steroids, I would say.
I very much liked a short and snappy comment by Adrian, who wrote: «keep it simple, invest in value». Yes, I agree, I think, value, regular dividends and time can do wonders.
What do you expect? Ladies and Gentlemen, the price you pay for return is volatility; if you want to receive a return, you have to accept paying the price. Nevertheless, time usually helps. Volatility curves tend to flatten out over time. Of course, at the time of a crash, of a market setback, volatility still leads to sorrow, but it may offer some comfort to look at very long charts and see that even high short-term volatility loses its significance in the long term. This most probably means in reverse that If you want or need a low volatility investment, the price you pay for it is a somewhat lower return.
If you have an investment plan, question it regularly; no matter if markets are going up or down, question it and if you are happy with your investment plan, stick to it because as Carl von Clausewitz probably correctly said: “The greatest enemy of a good plan is the dream of a perfect plan.”
Looking at the news and listening to the global political elite, I get the impression to see a fair amount of stupidity coupled with ideology. A mix I cannot think much of. Who elected those guys? Next time when voting, please ask yourself how the person you are to elect will represent your ideas during a crisis.
As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to: smk@incrementum.li.
Many thanks, indeed!
I wish you an excellent start to the day, a wonderful weekend, and above all, good health!
Yours truly,
Stefan M. Kremeth
Wealth Management
Incrementum AG – we love managing assets
Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li
Good Morning Ladies and Gentlemen,
The great Wayne Gretzky once said: «I skate to where the puck is going to be, not to where it has been.»
Some weeks ago, I pointed out that U.S. private investors’ bullish expectations were on low levels. Guess what? This Wednesday, that number dropped again. The number now stands at 19.2% versus 24.4% in the previous week. 19.2% represents a new trend low. Readings below 20 are rare. This was only the case at the beginning of the 2015/2016 bear market in the past five years.
The Ukraine crisis is determining the current price trend on the stock exchanges. Almost all other developments are being pushed into the background. Among traders, a famous saying goes: «political markets have short legs». “Short legs” may mean, in the event of an actual outbreak of war, that the adjustment to the new circumstances would take place quickly, in the form of significantly falling prices. However, the first buying opportunity would occur within a few days. If, on the other hand, a conflict can be avoided, at least for the time being, there would be a relief rally due to an already built-in war premium. A positive diplomatic solution would come as a surprise, be unexpected, provide relief, and lead to higher prices.
In that situation, what would Wayne Gretzky do? Would he buy into the market, expecting it to go up, assuming a diplomatic solution to be reached? Or, would he reduce his holdings, assuming further tensions escalating into a war and thus falling markets?
Do you think global leaders are capable of finding a diplomatic solution, or are they sacrificing the Ukrainian people to their unclear visions? Furthermore, how do you invest your money in a situation of such great political tension? Please let me know, because I would love to be able to do it the Wayne Gretzky way and skate to where the puck is going to be!
As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to: smk@incrementum.li.
Many thanks, indeed!
I wish you an excellent start to the day, a wonderful weekend, and above all, good health!
Yours truly,
Stefan M. Kremeth
Wealth Management
Incrementum AG – we love managing assets
Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li
Good Morning Ladies and Gentlemen,
When everything seems so obvious, you want to reconsider.
Sometimes things seem so obvious, «the really smart» people point in one direction, media and social media confirm the view, the trade looks very promising, you are convinced to outsmart the market. Ladies and Gentlemen, a good trade may begin like this, a bad trade as well.
Over the last twelve months, inflation increased steeply, driven by a base effect of higher commodity and energy prices. While I believe a similar increase cannot be expected for this year, a look at the long-term charts, including the core rate (excluding food and energy), shows clearly that U.S. inflation has reached the breadth of the U.S. economy. On the other side, inflation has not (maybe not yet) reached the core area in the Eurozone. Moreover, although energy prices were rising, the core inflation rate even fell slightly in the Eurozone.
Crude oil plays a significant part in the energy price equation. Yesterday, the WTI spot price hit USD 91.64; this morning, March futures are trading slightly below USD 90. As a trader, whose market comments we follow regularly, pointed out to us, looking at August delivery, prices go down to USD 83.24 already, and whoever can wait until December buys the barrel at USD 79.90. The point I want to make is that if crude oil plays a significant part in the energy price equation and the rise in energy prices led to a base effect that fuelled inflation; the opposite may come true as well.
What if, in the same time frame, supply chain problems recede somewhat and freight rate prices for container ships ease similarly to those for bulk container ships? Would we not see inflation rates come back?
Moreover, if inflation rates come back slightly, maybe the Federal Reserve would refrain from increasing the U.S. base rate six times by 0.25% in 2022 as it is currently priced in by the market, and this Ladies and Gentlemen would be a surprise to market participants. Today’s speculation still goes as far as 12 increases.
Now, to me, «short bonds» is a crowded trade, and I would keep my fingers off! Currently, the trade looks still so obvious. Too obvious, I think, this is why one wants to reconsider. Once market participants change their inflation outlook slightly and predict a minor lower inflation picture for the end of the year, a forced covering of a short position in the bond market (in any market really) may lead to losses.
As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to: smk@incrementum.li.
Many thanks, indeed!
I wish you an excellent start to the day, a wonderful weekend, and above all, good health!
Yours truly,
Stefan M. Kremeth
Wealth Management
Incrementum AG – we love managing assets
Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li
Dear Ladies and Gentlemen,
Once again I would like to thank you for all your comments, and as I did answer to Bob, who asked me if I was referring to the «calm» in my last weekly as the calm before the storm, I, unfortunately, do not know. How should I? I cannot foresee the future. But, as an investor, it helps to stay calm; at least, that is what I believe in.
January 2022 was not necessarily a good month for investors. Most traditional asset classes finished the month in the red and looking at the level of uncertainty in various fields, I can easily imagine the remainder of 2022 to offer a very bumpy ride, and yet, and as I have pointed out in my last weekly, it is all part of the game.
Look, Ladies and Gentlemen, even if one wants to conjure up the ultimate crash, the collapse of the financial system, some other catastrophe or the end of the world, so often, these things do not take place. Yet, the doomsday scenarios come up all the time, again and again with rewarmed arguments.
If you are a gifted trader, you may use volatility in your favour and buy at low prices and sell at high ones and trade your portfolio successfully. Trading news-flow, market-noise, fear and/or greed can be a strategy; however, very few people are successful at trading in the long run. On the other hand, substantial investors like pension funds are very often successful in the long run by buying and simply holding on to their positions very, very long-term. They rake in dividends and reinvest and thanks to the effect of compounding their returns grow exponentially. For the average investor, long-term investing beats market timing. Therefore, most successful investors pursue a long investment horizon, even if this means holding on to your positions during tough market conditions.
A look at past returns shows very clearly that the long-term pays off. Those active in the market long enough survive slumps and are compensated with attractive returns. Alternatively, even better, they use a crash to buy up more of the same at favourable prices. As a result, short-term fluctuations degenerate long-term into what they are: unnecessary noise.
Quality stocks may be boring at times, but they usually keep paying dividends and, most importantly, let you sleep in peace. Long-term investments in quality assets is what I am striving for.
As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to: smk@incrementum.li.
Many thanks, indeed!
I wish you an excellent start to the day, a wonderful weekend, and above all, good health!
Yours truly,
Stefan M. Kremeth
Wealth Management
Incrementum AG – we love managing assets
Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li
Ronald Stöferle talks to Andrew Thake of Mines and Money about what’s in store for gold in the year 2022. He also explains what happened to gold in 2021.
Ronald Stöferle in conversation with Macro Voices. Together with Eric Townsend and Patrick Ceresna, he discusses the Federal Reserve’s rate hike plans. Explains how the market will react and explains why gold will soon reach new all-time highs. An analysis of the current inflation dynamics is also not to be missed.