Replies to post #1538 on Mining Sector Ideas

[gfp927z]

Bigworld, >> time to get defensive <<

Yes, agreed. Between the wars, election, etc, things are on the crazy side for sure. I had the stock allocation up to 33%, but am now down to the 17-18% range. I figure 10% will be the absolute minimum for long term buy/hold, and since timing the market with consistency is not possible, the allocation model provides some discipline.

The big unknown right now is the Middle East. It sounds like the additional aircraft carrier and missile submarine should be in place soon (end of the week?), and then things get dicey. It also sounds like the Ukrainian situation could be entering full loony stage. What a mess. It's amazing how the financial media completely ignores the unravelling geopolitical side, while focusing instead on Powell's upcoming speech at Jackson Hole. Fed policy is probably the least 'uncertain' factor right now.

In the Middle East saga, Iran is waiting for the US assets to arrive so that their (Iran's) missile barrage will get shot down, as in April. They know Israel is just waiting for a pretext to launch a big attack (nuclear), so as in April, Biden and Iran are basically working together to avoid the escalation that the Netanyahu faction wants to provoke. As I see it, the big question is what desperate measures will Netanyahu & Co take to force the US into the 'US bombs Iran' scenario? Looks like we're going to find out.



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[gfp927z]

Bigworld, >> A bear market cometh. They often start at or just after a first Fed Rate cut <<

That's true, but usually the Fed begins cutting rates way too late when the recession is already underway. This time it looks like a relatively 'soft landing' is likely, or at worst a mild recession in 2025. At least that's the current perception, and with only a few months to the election, perceptions are what matters.

Anyway, In the near term I figure Powell & Co want the markets relatively buoyant to help the incumbent Party. The main Deep State faction that wants Trump elected would be the Neocons, and they aren't currently in power. So if the broader Deep State have their way, the market stays in kumbaya mode until Nov.

After that the political uncertainty will be over, so the market might see a big rally after the election (?) But lots of landmines, Middle East, Ukraine, etc, so who knows. Because we don't know, I figure it makes sense to have all bases covered via the asset allocation model.



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