Market Outlook - 4/8/22

I wanted to outline a brief outlook for the next 6 months to a year. Some of the ideas I believe will be multi-year trends in the particular industry which could be relevant to long-term investors. Some ideas are for the next 6 months to a year. I will be producing a follow up article featuring in depth analysis on all the topics listed below.

Strategy:

My investment approach is to identify economic, societal, or political trends that are fundamentally driving trends in industries and/or financial assets. I either express this world view through individual companies that best represent the idea or ETF’s.

I can express ideas through:

• Commodities ETF’s

• Currency ETF’s

• Industry ETF’s

• Sector ETF’s

• Geographic ETF’s

• Individual Stocks
  

Market Drivers:

Below are what I see as key trends that will be driving markets in the intermediate term - long term

• Increased Defense Spending Globally

• Supply Chain

• Rising Energy Costs

• Rising Food Prices

• Changing world order

• Global & Domestic Rising Inflation

• Global & Domestic Rising Interest Rate

• Slowing US Economy

• Slowing Global Economy

• Global Quantitative Tightening

• US Quantitative Tightening

• Changing World Order

• Reverse Globalization

Trading Ideas

These are the industries or sectors that I will either be going long or short as an investment with their fundamental drivers listed below.

• Long Defense

  • Increased global defense spending

  • Changing world order

  • Re-militarization of Europe

  • US needs to catch up to Russia and China military capabilities

  • Multi-year trend

• Long Discount Stores

  • Rising food prices

  • Rising cost of living

  • Rising Inflation and interest rates

• Short Retail

  • Weakening consumer

  • Slowing global economy

  • High inflation means less discretionary spending

  • Rising interest rates

• Long Agriculture

  • Climate change

  • Supply chain

  • High input costs

  • Ukraine /Russia war

  • Multi-year trend

  • Closing economies / Protectionism

• Long Copper/Cobalt/Zinc/Nickel

  • Global & domestic infrastructure initiatives

  • Electronification of the world

  • Net Zero Initiatives

  • Electric Vehicles and Machinery

• Long Gold

  • Record central bank buying of gold

  • Weaponizing of US Dollar

  • Geopolitical Tensions

  • Changing World Order

• Long Marine Shipping when war is over

  • High shipping costs

  • Shipping companies trading at deep discount to market

  • Increased demand for services

  • Boat shortage

• Long Asset Managers

  • Challenging markets means there will be a washout, top managers will perform and eat up market share

  • We just came out of an insane 2-year bull run who won’t perform well in this environment

• Long Private Equity Firms

  • Record year in Private Equity Funding and venture capital

  • There are a lot of publicly traded P/E Firms investing in infrastructure projects

• Long Engineering & Construction (companies consulting on infrastructure projects)

  • US & global infrastructure spending

  • Net zero / sustainability initiatives

  • Multi-year trend

• Technology

  • Companies with strong product demand

  • Companies with strong fundamentals

  • Companies dominating a particular market

  • Companies trading at competitive valuations relative to industry

  • Multi-year trend

• LNG Transportation

  • Liquified Natural Gas needs to transport into Europe not through Russia

  • Changing World Order

  • Reverse Globalization