The Tactical Asset Allocator

When Mike Tyson and Paris Hilton are tweeting praises about Bitcoin… you know you’re in a bubble. When you see this headline on the front page of CNBC: “Iced tea company says its pivoting to blockchain, stock jumps ups 200%...” you know you’re in a bubble. [1] When nineteen year old anarchists are hailed as investing geniuses… you know you’re in a bubble. [2] When your skydiving instructor says he’s quitting his job to pursue “crypto-trading” full-time… you know you’re in a bubble. Investors often miss the signs of a speculative bubble amidst the exuberance. Today, Bitcoin has reached the opposite end of the spectrum. The price crashed by over 70% and many caught in the rising tide of a speculative mania are licking their wounds. This provides an opportunity for the enterprising investor. After seeing the price action and several YouTube commenters referring to it as “shitcoin,” I knew the time had come to investigate. Upon my research, here are several reasons why I beli...

The global synchronized growth story ended on September 2017 when the Federal Reserve announced an end to quantitative easing and an effort to normalize its balance sheet. With divergent Fed policy leading to a stronger dollar, and knock-on effects of that stronger dollar reverberating through emerging and precious metal markets, now is an exciting time for the global macro investor. The following is the situation I expect to continue to play out in global financial markets for the next several quarters—with a target date of Q2 2019.  The situation is bearish for EM and gold while bullish for the USD and an already overvalued U.S. equity market. This scenario runs counter to the prevailing wisdom of many global macro investors that have run to EM and gold in the face of an overvalued U.S. equity market. If you are in this crowd—there may be more pain to come. Don’t shoot the messenger. QT as a catalyst to dollar strength Quantitative easing led to an explosion in th...