Weekly Portfolio Update: The Rollercoaster Will Continue into 2022

Dear Fellow Investors,

It has been quite a week. 

After that nasty downturn in momentum last Friday, we had to take a few companies off the board. But we’re primed for two new trades (including the bonus trade that I laid out earlier today). 

As I noted, Evergrande in China lurks as a very ugly domino in the global economy. My concern is that there will not be a structural solution, and we’ll continue to see Band-Aids applied. 

It doesn’t instill much confidence that a company that makes $5 billion a year in profits has $300 billion in liabilities. That latter figure is 2% of China’s GDP.

I’ve heard some people say that it won’t spread to the U.S. I don’t agree with this assessment fully. Chinese citizens invest in a lot of real estate in places like Northern California and New York. Any run on capital due to falling prices in China would impact larger U.S. markets. 

I have learned from multiple major events to ignore the people in charge at the onset. The head of the European Central Bank said that Europe has very little exposure. I openly laughed at this interview. 

As I said this week, I’m watching Australia. If we do experience any serious macroeconomic problems, it will start there. The commodity space has seen some insane moves over the last year, and it appears that the combination of supply chain shocks and labor shortages will persist.

The reason why I didn’t move on shorting the nation was because of the rebound in commodity prices on Tuesday. 

So, we have to be patient. 

My expectation is that the market will continue to experience a ladder pattern during the week. Some selloffs on Monday, gains for the next three days, and then a Friday downturn. 

We have a lot of work to do. 

The good news is that momentum remains very strong in the supply chains. Our PSTI position continues to run, and I will use any selloffs moving forward to recommend purchases in global shipping container companies. 

The supply chain crunch we are about to experience (get your toilet paper and holiday gifts right now) is going to be as significant as what we saw in 2020, if not more significant. 

And we will turn that pain into our gain. 

Now, please watch the video below. 

And, feel free to email me here:

Have a good weekend,

Garrett Baldwin

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