MARKET COMMENTARY:
Hey there Maverick.
Do you feel it?
That feeling of unease. As if something bad is about to happen?
As you’ll see below, the SP500 (really the SP 7) continues to keep making historic highs.
But how? and why?
How? ETF and institutional capital keeps buying as its price performance leads managers to throw in the towel and follow as for those with benchmarks, it’s too painful to resist
Why? Here’s a snap from Horizon Kinetics quarterly commentary which was shared by Trader Ferg.
So how long can this last and where to from here?
1st part: no one knows. 2nd part: What can’t continue must eventually stop and revert.
This below chart from GMO’s latest piece is super interesting.
The thing for me is always buying what’s cheap and can provide me with an acceptable return from its underlying cash flows or asset value realisation over time.
So, what’s currently cheap or at least not a bubble sector?
Somehow, despite having grown earnings at 16%+ over the last 5 years, which includes COVID, analysts project EPS growth of only 1.45% Vs Tech, which is apprently going to continue to grow in the mid teens, despite the big names running out of new markets ito which they can sell.
So do I look silly while I’m waiting?
Probably.
Do I mind?
No. I
I’m getting paid handsome dividend yields to numb the pain and frustration haha
FREE STUFF
As you know, I’ve been working like a dog recently consulting for a Singapore-based Hedge Fund. Funny how I’ve never been in a better financial position and yet never worked so hard. I think I’ve discovered that I really enjoy the work in itself and the game of being proven right over time. Which is why long extended nomading probably won’t be for me after all, granted I’m still going to explore Chile and return to Argentina in April.
As a thanks for your patience, please find below executive summaries for energy names which may interest you including:
Petrobras. Yancoal. ARCH resources and DHT.
LIFESTYLE
Although I’ve made many complaints about the ridiculous nature of Aussie Property prices, the fact remains Australia is a great place to live and politically-managed sectors have a habit of being hard to kill quickly. As a lifestyle piece I looked at this place today which is a baller of a Townhouse in a regional area where I have business.
Whilst I’m not normally an emotional man, f***ing hell I wanted to buy this thing.
I just can’t make it make financial sense.. rental yield on this would be lucky to be 4.5%
I know the seller personally so we’ll see.. But I can buy an existing house on a block twice the size for half the price and pay $250K for an architect designed re model and still come out ahead at 75% of the cost. Being a Maverick means thinking outside the square and considering different ways to get to a desired point.
4.5% yield in an overpriced Town house or 15%+ yields in necessary blue-collar businesses?
I’m betting that patience and humility will pay off (or I’ll be sad).
The Maverick Life Portfolio:
Now, to business..
Squad members - scroll down for this week’s wrap.
In true Maverick spirit, let's embrace adventure and see what happens.
See you inside the squad.
Benjamin.
Disclaimer: Options Mavericks is intended solely for documenting my personal journey with options trading for income and travel purposes. I am not a certified financial advisor, and none of the content provided should be construed as investment advice. It is essential to conduct your own thorough research and consult a registered financial service provider for appropriate guidance. I cannot guarantee the accuracy or completeness of the information presented. Any actions taken based on the information shared in Options Mavericks are done at your own risk and discretion.
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