2022 was my magic year for equities. I was long oil, coal, and European financials short tech and real estate. Up 50% despite being pretty conservative.
2023 has not worked out so well. RE went down a bit more, but tech recovered big.
I am responding by shifting back into reshorting closed positions and starting a new one today NVDA, 10 shares short to start at 230. I also opened a WMT short last week.
I am more short-term pessimistic about the economy and asset valuations than I’ve been since 2006-8, when I was very short RE stocks, REITs and mortgage banks.
I think the chance of an Israel-Iran hot war this year is about 10%.
Similar risk of the Ukraine War spilling into Moldova. Already both sides are accusing each other of false flags and provocations. Russia occupies part of Moldova on the Ukraine border and it is physically isolated from Russia proper.
A Taiwan invasion by China would be a real disaster and cause an instant global depression. Maybe 3 to 5% chance this year?
I like Western Hemisphere focused oil stocks because they are cheap and benefit from a strong economy as well as geopolitical instability. While a long deflationary recession would be bad, OPEC cuts and extended underinvestment and production declines will mitigate the pain in such scenario.
I decided to wait on another vehicle. My 2021 Mazda SUV still only has 5500 miles on it and I am working from home more and driving less. My other vehicle is a Japanese hatchback with only has 40k on it, but it is a 2010 that’s always been parked outside so it has a fair amount of sun damage and general aging. I am really bored with it, but the rest of my family likes it, and it is fast-ish (light and 165HP) and handles well.
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