The vaccine campaign is soon over - look at gold mines, crypto instead of travel and oil

The vaccine campaign is soon over - look at gold mines, crypto instead of travel and oil

19 November 2020 from Mikael Syding

Not just one but two surprisingly promising vaccine candidates have seen the light of day in the space of a week, while Bitcoin has reached $ 17,000. In my last article two weeks ago, the question was whether BTC would have the strength to break through 14,000. It is happening fast now, everywhere, except perhaps in the US presidential election where Trump continues to claim electoral fraud.

Bitcoin seems to have confirmed the start of a real revaluation, perfectly timed about six months after its "halving" this spring. Bitcoin thus has a good chance of becoming the decade's best asset class for the second time in a row. It does not take much to raise the price significantly, given how inferior Bitcoin is as an asset due to previous stigma and legal obstacles. Gold, for example, accounts for only 0.15% of institutional portfolios' wealth, and Bitcoin's market value is only 3% of the total value of gold.

When BTC rises to new records, altcoins usually follow, often with larger percentage increases - much like silver often does when the gold price plows unpaved ground. For example, I hold Ether in my portfolio.

Speaking of gold and silver, the gold price in USD has slowly but surely built a bull flag between 2050-1850 USD / oz in recent months. With Modern Monetary Theory advocates behind it and continued political will to increase QE programs to mitigate the effects of the Covid-19 pandemic, monetary support for gold is massive. It's also the right season for gold now. However, do not forget that if the gold price is to accelerate towards new records, there are potentially even greater opportunities in silver and in gold mines. Thank the pandemic for that. And thank Moderna and Pfizer for the opportunity to get into the metals cheaply, now that all interest is focused on the Fly Away sectors hotels, aviation, cruise ships, hotels, amusement parks, film and energy. I think it's a temporary reflex. The vaccine will hardly reach a significant proportion of the population this winter, and much of the changed travel habits are likely to persist.

No, there will not be full occupancy at SF's cinemas or RCL's cruise ships this summer, and no SAS's problems are hardly over. Disney movies will be on ice for a long time, not to mention their parks. That the market hopefully rotates into vaccine winners such as oil companies, banks, airlines and other reactions to the Home Alone tragedy is as understandable as encouraged by the investment banks that want to maximize the commission. But in the real world, nothing has changed from the promising studies of Moderna and Pfizer. Instead, count on increased stimuli as soon as the lame duck Donald hands over to Biden. The stimuli can come earlier than that, by the way, if Mr Trump presses the gas already now to gather services on high protection against all enemies he managed to get during his short term.

Last time I wrote that I could not see any scenario where the stock market was lower at the turn of the year. Oops, what that trio hurt "in the beginning". Unfortunately, there is no guarantee that I will be right. In a world with ever-increasing stimuli and debt mountains that are too big to ever get into play in earnest, it is instead important to buy the least stupid or at least what moves. Right now, it is leisure sectors and energy that are being bought with both hands. However, the rotations are happening faster and faster so I would not marry that trio, but already now watch stimulus winners and Stay At Home games again. I think it's gold, silver, cryptocurrencies, computer games, FANGS and home building and homemaking that count.

Incidentally, Hennes & Mauritz's valuation and price graph look as if investors there are really consciously trying to lose their money, not least in light of both the economy, pandemic, environmental movement and the dependence on the extremely outdated concept of fast fashion. I am not trying to get anyone to sell any shares in either H&M, RCL, Swedbank or Disney. It is far too dangerous in a paradigm where the US response to Wirecard, Tesla, may be included in the S&P 500. Instead, you can buy everything that moves, but try to be in phase early when the wave of money moves to the next mini-trend. The vaccine wave is unlikely to last long, so if you are engaged in the stock market, you must be prepared. Keep in mind that it is timing that quickly builds a portfolio in the market, not just time in the market.

@Mikael Syding

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02/12/2020 07:52:21

 

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