Replies to post #2374 on Awesome Stocks

[gfp927z]

Looks like that article was from 2020, during the BLM associated turmoil, and also right after the Covid crash and Fed response of massive backstops and ZIRP / QE. So no wonder the stock market roared back, but today things are a lot different because of the inflation. Back then the Fed had free rein to use ZIRP / QE, but today the Fed's response would be severely boxed in since inflation would roar back, and also the Fed's balance sheet is already blown out.

One theory is that the Fed will use a rapid CBDC rollout as the 'solution' to the next financial crisis. Ed Dowd has discussed this scenario, and it makes some sense. The CBDC thus gets installed quickly, and all potential opposition is overcome. But this is just one possible scenario.

As for how to prepare investment-wise, I figure a big cash/T-Bill allocation makes sense, and then you can go bargain shopping in the aftermath. Trying to get too clever with it is risky due to all the unknowns, variables, timing, etc, If things start to clearly unravel, you could try jumping in on the short side for a trade, but otherwise I figure it will be a victory to emerge more or less intact, and then pick up the many bargains.

But one problem with the cash/T-Bill approach is that a crisis to bring in the CBDC may involve big problems with the US dollar, in which case you would need to be more in hard assets rather than cash/T-bills. Who knows, but having some gold/silver makes sense, along with some paid-for real estate. Farmland is another hard asset idea, though the farmland REITs would likely move with the broader stock markets and thus not be an effective hedge during the crisis period. Same with some other commodity type areas like lumber, oil/gas, etc. These can be really volatile in normal times, and even more unpredictable during a crisis.

Fwiw, here's my model portfolio, though the stock portion is currently in cash -


Stocks -------------- 25% ----- (0)
Bonds -------------- 20%
T-Bills --------------- 20%
Cash ---------------- 20% --- (45%)
Gold ----------------- 10%
Silver ---------------- 5%



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[bigworld]

wow: In addition to entertainment venues I would add in the restaurant sector as a probable loser. However, the chain type restaurants like Appleby's etc, the so called casual sit down space, are usually located more out in the suburbs. As you listed...gold and silver should hold their value. Real Estate at least 25 miles from the urban hordes should hold up OK. Inside the bigger cities....not so much. Once they burn down the government buildings and schools the remaining taxpayers will get stuck with higher and higher taxes to rebuild it all. Gun and ammunition makers would do OK. I read where there have been at least 1 million weapons sold each month for the last 47 months.