Mocker Monday. 29 June.
Mocker Roundup
The Mockers had a meeting with alot of discussion about some key points for Australia and the world. We should note that these are our opinions, and they may not be correct, but nevertheless they represent how we see the world at the moment. These are our big forecasts for the near future:
The Coronavirus won’t have as much effect on the market if there are second or third waves. We kind of know what to expect, healthcare systems haven’t been overwhelmed. Any effect of subsequent waves will be smaller than the first one.
The true effect on the Australian economy, and second market crash, will happen in Dec. This is a nexus of events:
- Australian Government Stimulus (Jobkeeper): runs out in September, Mortgage defaults will take 3 months to materialise. Though this depends on how the government chooses to exit it. Hard stop vs taper vs continuation?
- The US election in November: Trump will prop up the stock market in America by pumping as much money into the economy as possible until the election in November. Whether or not he wins or loses we don’t believe this can go forever. If a new government comes in (Mockers were split on this) expect Chaos, and maybe a “wiping of the books”? There’s a two month window where the new government can shoot a bunch of stuff dead and blame the previous incumbents. Expect chaos.
As America continues to print money at “this time it’s different” rates, the AUD-USD will hit 90c at some point over the next year.
Under the threat of the impending USD collapse, the safe haven assets get a boost: Gold hits US$2000 (Mocker Bill is a huge gold bug and is betting on this heavily as his main theme for the foreseeable future. He’s quite convincing, and backed by a number of big thinkers; almost all Mockers have holdings in Gold miners).
- 4 key data points to monitor (Livewire Markets – Youtube)
- How the coming crash in the dollar will unfold (Stephen Roach – Bloomberg)
- Don’t fight the Fed, buy commodities insteads (The Rules of Investing – Livewire Markets)
Quant Investing
Some of the Mockers went down a bit of a hole, looking at quant investing and discussing algorithmic trading. This is one of the biggest movements in America, with Renaissance Investments having lead the charge; the most successful Hedge Fund in America (averaged annual returns of 66% over 30 years).
- What is quant investing and why is it different? (Firstlinks)
- Gregory Zuckerman on the Quant Revolution (Masters in Business – Bloomberg)
Nickel Mining to benefit from Lithium demand
One of the macro trends that the Mockers have been looking into is the third wave of Lithium demand, as battery demand goes through the roof. As an alternative to Li, Nickel has been noted as a secondary beneficiary of this macro trend. Nickel stocks are bullish (James Gerrish – Livewire Markets)
Nick Scali Beats – Well Managed Retail
This has been one of Mocker Hsuan’s favourites for years. Exceptionally managed. Vertically integrated pipeline. Insane profit margins and Return on Equity. One of Australia’s best quality-dividend retailers. They have managed and implemented well during the lockdown, implementing strategic initiatives that should help them grow their business into the future. This is probably indicative of a broader trend, where Australian’s will spend travel money locally. Where will the other beneficiaries of this be? Nick Scali reports strong sales in May and June (Roger Montgomery)