RE:RE:RE:RE:NAS approaching bear market status as it is down 17% thanks for your reply on a slightly off topic subject. What i see is you were too proactive on gold and got squeezed out too early as gold has done well the next 3-4 years after the 2008 crash (800 to1800), and yes, oil did even better after crash (~35 to ~130). I can't predict fed's money policy so the price of gold is still cloudy to me but the current oil bull could be a bonanza run as it is compounded by anti oil, ESG, lack of new supply and production capacity. Can't lose by overweighing in oil/gas. GLTA
MigraineCall wrote: No. Gold is how I got wiped out the second time in the 2009 financial crisis. I got out of most everything ahead of time, buying gold, and call options on gold producers. I was using it to bet that the market was going down which it did. I was thinking gold would be a safe store of wealth as most others also believed. It flushed with everything else as everyone sold it off to cover losses in other holdings.
Gold is a poor inflation hedge, but commodity like oil is better, especially with the strength it has been trading in face of so many headwinds. If that changes, I will reconsider my thesis.
Keep in mind, everything gets sold off in a downturn, with few places to hide.
To better manage my oil positions now, I keep a bigger margin cash buffer proportional to the VIX and OVX in order to be able to ride the volatility without being forced to liquidate positions. Selling would force excessive tax exposure, and the increased capital gains taxes can be worse than holding temporarily to get through a price drop.
Note that API reports today that crude and oil product inventories continue to draw, while this should be build season. Oil stays strong. Gotta love that.
Crude: -.875
DSL: -2.2
Gas: +2.4
Cush: -1.0
mrbb wrote: how about precious metals? Would gold/silver benefit from the inflation and economic turmoil?
MigraineCall wrote: Yes, agreed.
Along with Experienced, I think we will get some higher interest rates, with the market expecting a single 25 bp initial hike announcement.
Also, Ukraine and Taiwan have the higher risk to happen at the same time after the Beijing Olympics, as well as China property debt issues surface after closing ceremonies.
I would not want to own anything other than oil at the moment. It seems invincible to the markets with the current supply/demand situation and dropping global inventories, and excellent insurance to hold for future inflation and economic turmoil.
Obscure1 wrote: It feels like the December 2018 plunge on interest rate concerns but with more problems.
Will the teeter totter swing back up like it did in 2018, or will one or more of Covid or Russia/Ukraine or China/Taiwan or N.Korea/S.Korea or Evergrande or the inability to service debt or a widespread and unrepairable breakdown in the electrical grid put the hammer down on the markets?
What a terrible time in the history of mankind.