John Rubino – Long And Short Trading Themes As We Await The Larger Macro Contraction To Unfold
John Rubino, Founder of the Dollar Collapse website and editor of a recently launched newsletter over at Substack, joins us to review some long and short investing themes as markets await the larger macro trends in motion to contract economic growth. We discuss possible scenarios that could play out as the Fed and other central banks keep tightening and how the interest rates we already have will have a lagging factor on pressuring both businesses and consumers. If we see a recession or extended contraction worsen due to this backdrop, then we could see different sectors break under the pressure and this could be the tipping point to bring in more accommodative action from the central banks, without fixing the real issues.
Until that plays out, then John is seeing interesting shorting opportunities in general equities and even overseas in markets like Japan or with currencies directly like the Yen. He is more hesitant to get too much long exposure at this point in the cycle, but he is interested in scaling into more uranium, copper, and silver sector and stock exposure, and outlines the medium to longer-term positive supply/demand growth narratives in these commodities.
Hi DL – I thought those were good reflections from John as well, on the different strategies from options and selling puts, to inverse ETFs. Yes, agreed, a short Nasdaq 100 position would have been a more compelling at the very end of January’s jubilation run coasting on ecstatic fumes heading into early February in most markets, after having bottomed in October and surged for months. However, it most markets are still at fairly lofty levels compared to where they came from a few months back, and historically on an number of metrics for companies or index valuation basis.
Still, many commentators technical or quantitative models have turned more bullish lately, and I’d be worried we see a bit more strength from investors feeling it is safe to get back in the water, before things roll over in earnest for a more prolonged move downwards. They’d feel confident again, with mantras about being in a continuation of the bull market or the next bull market, to where then the rug would get pulled out from underneath them again. That could be an environment where the Feb 2nd highs do get breached, and yeah it would be best to let that move play through… wait for exhaustion and very overbought conditions and then pile on the shorts.
I don’t think it contains the kind of stuff John Rubino was talking about shorting, but I’ve also started taking a short position on the TSX60. It’s doing everything I want the nasdaq to do– breadth failing to get to new levels, momentum rolling over, failing to hold above both the August and November highs, leaders reversing previous rallies. I honestly never thought the kind of companies in the TSX60 would lead the way down ahead of the nasdaq.
I wonder if Josef Shachter is right and we have a big energy buying opportunity coming up. Cenovus, CNR Ltd,, Tourmaline and others could end up pulling down the TSX 60 all on their own. Nutrien might sell off on the fading materials rally. And it looks like the Canadian financial sector is doing kind of poorly lately with many stocks failing at previous highs. Shopify, a past darling is joining in on that along with the metals majors in the index that might not be holding their bases.
Things just sort of seem troubled in Canada. There was certainly no lasting euphoric “pivot” rally from the BoC going more neutral and warning of recession.
I’m out of any TSX60 short on any daily close over 1256. If it’s making a new high, I don’t want to be short.
Yeah, I’m waiting to see if Joseph’s call for Oil breaking below $70 into the $60s will be a short-lived V-shaped bottom, for a surge up higher on the other side. If we see that break into the $60s then I’ll likely layer into a few more energy names. As for Nat Gas, as mentioned last week it is likely we already saw the lows in February, but if they got retested again down near $2.10-$2.20 then I’d likely scoop up a few of the gassers as well.
However, some of the analysts we’ve had on like Dan Steffens and Ed Moya are still quite constructive on Oil and believe most of the worst of it is behind us with rangebound trading from $70-$90, and then eventually a pop back up into triple digits. We’ve seen oil stay in that range for a few months now, so maybe it won’t have one final capitulative low in the $60s, but either way, most analysts are still bullish on both Oil and Nat Gas for the medium to longer term and that they’ve got much further to run higher. We shall see how it all plays out.
The Great Electrification – It’s time. Uranium is about to repeat its historic bull market.
The Mangrove Investor – March 6th, 2023
“That’s because we are on the cusp of a brand-new bull market. There is a strong global move back into nuclear energy right now. Plants that were slated for shutdown are staying open. And money is pouring into new reactors and innovative technologies.”
“Even the U.S. has made huge strides in modernizing its nuclear power fleet over the past 12 months. We currently produce nearly 30% of the world’s total nuclear energy.”
“Nuclear energy also appears in a large slice of the Bipartisan Infrastructure Law passed in 2022. This law allots more than $62 billion for the Department of Energy (DOE). Part of that funding goes towards modernizing nuclear power by demonstrating advanced reactors, preserving the existing fleet of nuclear power plants, and using nuclear energy to produce hydrogen fuel.”
“The DOE provided more than $12 billion in loan guarantees to help utility companies complete the Plant Vogtle nuclear reactors in Georgia. Once online, this will be the nation’s largest clean-energy power plant.”
“The result has been a deep revision of national energy policies around the world. Today, energy security dominates the conversation. That means countries want to generate electricity within their own borders, without the need for international, unreliable fuel supplies.”
“As a result, we’ve seen a surge in demand for solar, wind, and nuclear power plants. As noted in energy research firm Sprott’s January 2023 monthly update to clients, since the start of the Russian invasion of Ukraine, nearly every country with a nuclear power fleet is working to keep it open. Those countries have either delayed shutdowns, announced expansions, or made nuclear a principal source of electric power in the past year.”
“That’s because nuclear power can take the place of coal and natural gas for ‘baseload’ power generation. Baseload power is the energy supply that’s always running – unlike solar and wind power, which only run under certain conditions.”
The STEO is due around noon: https://www.eia.gov/outlooks/steo/index.php.
Thanks for the heads up BDC. Yeah we usually review the EIA numbers with Joseph & Dan when we have them on the show.
Powell to appear before Congress today. Markets unreliable. So far, the instant replay of yesterday.
A race to some kind of a bottom. Who knows.
Great opportunity for those with patience and cash.
Escalator up. Freight elevator down.
Strong GDX support at 27.
The generals all in full retreat aem, nem, fnv, abx. and may be worth an option play flyer as gold simply heading back to its 1800 +/- floor. Nothing end of world about that.
However with very few exceptions, the penny arcade bought and continuously accumulated here are in for much more misery at best and survival at worse.
I must disagree with you…..I think it just emphasizes how important stock picking is when bull mania isn’t sweeping up even the dregs of the world…..my portfolio isn’t up as high as it was late January to early February but it’s still up on the year so being in cash would have been a mistake for me. I was more critical/base metal weighted(and still am). I’m not good enough to pick bottoms so I try to find a good mix of “penny arcade” plays and accumulate in tranches. Be it averaging down or up. We all have to do what works for us. For you, cash works so so be it. Doesn’t work for me.
Valid response Wolf.
It depends on personal perspective. Buying a penny arcade basket can be taken as an unexpiring option play. Even though it can easily become dead money for quite a while.
I only buy options on what I want to own anyway with sell offs. Gives opportunity to see where things are headed with minimal cash exposure.
I’m interested in cash preservation more than hitting ultimate home runs. That’s why when I’m out, I’m out. As this past late January after taking a stake in this thing at the summer lows. An then holding thru a period with marginal gains and lots of market noise.
I should also point out I’m a fan of your strategy of writing covered puts at levels of entry you like and then writing covered calls if assigned the stock as a revenue generator. In fact it was a strategy I used during the Covid drop and also was when I found out not all Canadian accounts are equal as that strategy of writing covered puts cannot be done in your TFSA or RRSP.
Hey Ex. Finally got around to listening to the MPM interview…..yeah it all sounds great but the markets aren’t impressed…..I picked MPM as my stock loss selling bounce back winner and it’s actually down another 20% from those tax loss selling days so it’s the big red on my screen.
When talking with someone like Doc Jones pre or post interview do you ever discuss other stocks ….and why I ask is cuz he’s the type of person who’s opinion I’d value regarding something like Stillwater which I can’t wrap my head around being valued like it is and wonder if I’m missing something …. Potential pp notwithstanding as warrants don’t look like they’ll be in the money in time.
Hi Wolfster. Thanks for listening to the MPM interview on their business combination with ITR, and I think Jason did a good job of laying out the compelling reasons for the merger of equals strategy, more size/scale, development & exploration news, savings of $2.5 million in G&A expenses, more relevance as a larger consolidator of the Great Basin, and eventually a larger vehicle for acquiring other stranded assets into a roll-up strategy.
As for the market reaction, let’s be honest here, we see that almost every time there is a merger or acquisition announced, and the markets haven’t been loving most PM stocks for the last 5 weeks. Most news released has been a reason for liquidation once again, but I don’t think that necessarily is a sane market…. more so an inefficient market, with companies continuing to build value and being shrugged off. That will just make the rerating that much more extreme when sector sentiment improves.
As far as chatting with Doc Jones, yeah sometimes we discuss other stocks before and after the calls that we are reviewing, and some of them make it in the recorded segment and other’s don’t depending on the flow of the conversation and what the guests feel like discussing.
As for the market disconnect on Stillwater Critical Minerals, I hear ya. If people are in love with the nickel components in Canada Nickel or Magna Mining, then they should also be impressed with the 1.6 Billion lbs of nickel/copper/cobalt and the additional 3.8 million ounces of platinum/palladium/gold. That’s the point… the market is NOT always right, and often there are huge disconnects amongst peer comparisons, resource comparisons, of the actual value of the rock in the ground, etc… (PGE) has a beast of a project and resource, and the market still seems oblivious — that’s their loss and our gain.
KTN, Kootenay, level 2 quotes tells me there is 3.8M shares bid between 9 and 10 cents, nice, maybe sniffing 6 months out.
QQQ:SILJ is back to its 2/24 high:
AGQ has now filled its big Nov. 4 gap and presents an appealing buy (for those who know how to manage risk!)…
waiting…day/GC…Have to watch indicators and volume into this retest…glta…also the dollar may top first and trigger the gold buying
UUP:GLD is at its high for the day which happens to be precisely at its 233 day MA…
106.152 could be the retrace up for dollar…so similiar Matthew….https://tos.mx/dNq1zfi
Gold down less than 2%, sector equities, are down 2 and 3 times to the downside including gdx.
Same old overperformance on downside and underperformance on upside.
Yet hope springs eternal for those with technical babble day after day. And for months.
SILJ fell less than SLV yet irrational terror springs eternal 🤪
Yes dollar will tell the tale for gold. Unfortunately a coincidence indicator, but good to confirm the trend or its change
PERTH MINT……………caught selling FAKE GOLD to CHINA………..
That’s news worth an invasion for China. Forget Taiwan focus on Australia.
The crap that’s out there.
Just returning all the garbage they sent us last several decades.
Enjoyed the short selling talk about what he sees not working. I’ve been developing a short nasdaq 100 position and like everything it’s on a knife’s edge. I like the breadth of the Feb 2 peak not having the participation of either the August or November peak. Momentum hasn’t quite rolled over yet and we are still above the November high. Obviously any move over the Feb 2 high would mean it’s time to wait until the upward momentum and breadth both turn and fail, so it’s good to have hard lines in the sand when shorting to get out. I’m not right about it going down if it is going up and the sooner I know I’m wrong the better.