In this weekend's 418th edition of Turning Points we have a 15 page note reviewing long-term expectations for the markets; The best sectors to take advantage of what lies ahead; A review of crypto, including the current state of alternative crypto investments; What we plan on doing with our NVDA long position; What to expect from the markets during the weeks ahead; A review of a new position being initiated on Monday.
What follow is a brief preview from this weekend's note:
We are in an unusual space in time given the convergence of a number of unprecedented technological, economic and geopolitical developments taking place simultaneously. This naturally creates the tendency towards caution as there are few corollaries to what 2024 and onward is in the process of becoming. The predominant sense of caution is further amplified by where it is we have come from the past several years.
Whether the extreme volatility of the 2020 pandemic market or the recent 2022-2023 secular bull market consolidation that saw mega-cap tech stalwarts like META lose 80% of their value from peak to trough, investors have been conditioned to expect the worst and hope for the best.
Let's consider for a moment where we are in time:
- Geopolitical power structures shifting
- USD reserve currency dominance being challenged
- Inflationary pressures unpredictable
- AI creating growth that is exceeding that of the dot com boom
- AI creating economic, social and political ramifications that are both unpredictable and unprecedented
- Crypto being an unregulated, highly speculative financial sector seemingly waiting in the wings for AI integration, while demonstrating continued resilience against regulatory authorities
- Developed nation balance sheets being leveraged to the hilt, with massive amounts of liquidity remaining in the global economy
- A two year consolidation in the US markets in 2022-2023 that created extreme volatility in key assets, further dissuading investor participation
- A secular bull market that, as I have demonstrated in the recent past, is squarely mid-cycle in terms of overall age
A literal powder keg of technological, economic, social, political and technical convergences.
Bringing us to what is the most important chart in finance. This is a chart I have been sharing for nearly a decade now, as it continues to track expectations perfectly.
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