Kupotea

My strong suspicion is we’re set up to overheat by the second half of the year. Maybe sooner. Fiscal impulse is absurd and FED will continue cutting when the economic data shows no need for it. People keep crying recession and AI job losses are coming but it’s all narrative to date there’s no substance. Yields up will spook the market badly at some point and FED will step in to massage the long end lower. I’m mostly in cash and waiting for the right set of opportunities. Had my best year ever last year with a heavy gold miner concentration and I’m in no rush to give back those gains.

I’ve read that roughly 10% of India’s GDP is outsourced knowledge work/customer support. Anyone else think the rise in LLM capabilities are the kiss of death for outsourced IT labour? It seems like LLMs are custom built to replace the boiler plate code that most of these shops are specialized in providing to western firms.

Look at the actual flows. Central banks are accumulating but certainly not institutional investors in any meaningful sense. Negative outflows for the GDX over the last several months… You could rephrase this chart to what fund managers don’t own and are pissed about missing. Having said all that i absolutely think you get a correction in gold/gold miners before the end of the year. Good chance gold touches $4000 first.

Berkshire and fairfax are great businesses, it’s just not for me. Track records are obviously important, management alignment is great, they have excellent corporate values and strategy but people said the same thing about GE. You don’t know what you don’t know until it’s too late and that’s my perspective.

No, this is the first time i’ve ever invested in miners. I wouldn’t suggest holding miners for the long term to be clear they’re bad businesses unless you’re agnico eagle or royalty co. I usually invest in value with a catalyst, cyclical sectors on a positive inflection (which would apply in this case) or turnaround plays. Almost always there is a component of this business looks meh on historical earnings but it’s clear that the situation is improving quickly. I keep options or highly indebted companies to 15% or less of the total portfolio.

I have a lot of respect for Watsa and Buffet but I’ve never been comfortable investing in financial institutions or large conglomerates. I get that you're investing in management more than the assets but I can’t hold something when I don’t feel like I don’t know all the facets of the business. Heresy around these parts i’m sure. I’m confident in my investing abilities but there’s always unforeseen edge cases that can kill you. Smarter guys than me have blown up their portfolios because they unknowingly over allocated to some fraudulent business or it turns out xyz company’s products cause cancer or whatever. I’m also just not talented enough to find multiple winning investments at the same time. I get like one really good idea every couple of years and that’s actually fine but it’s too much concentration risk or conversely not enough juice if i limit that to like a 15% position. Taleb has this whole (self-indulgent) book on how if you open up your portfolio to financial ruin via tail risk then mathematically it will eventually blow up. I need to do something to mitigate that.

I am very heavily invested currently in gold miners and royalty cos. They have been on a tear this year and may be due for a pullback but you still have names trading at 30%+ FY26 fcf yields with current spot prices. I personally believe we’re in a secular bull market due to global fiscal largesse, fiscal repression, diversification away from USD assets by central banks and European pension funds. $4000 gold in 2026 is not out of the question and I could see a bit of a frenzy develop in the gold equities space as institutional managers seek to catch up to a very under-owned sector. My top two picks are: Aris Mining (jurisidiction risk being based in colombia but amazing assets at a stupid cheap valuation and i expect colombia to swing right with the federal election next year) Equinox Gold (poor execution has crushed investor confidence in the stock but build out of their two new tier 1 mines are almost complete and the stock is silly cheap plus liquid. You can buy jan 27 contracts at like $.70 for the $12,50 strike price while at a 1x nav or 6-8x ebitda this company should be in the $20+ price range by then) Easiest option though is to just buy the GDX etf. I did recently recommend Vox Royalties but i’m selling out of it due to some litigation risk.

This is pretty much what i’m going to do. Thank you and to everyone else for the feedback I really appreciate it! To those wondering why i would change up a working strategy i get it. If it was just my own money I wouldn’t change a thing but the thought of possibly blowing up my kids futures fills me with dread. Can’t put a price on piece of mind

Appreciate the feedback and i’m aware it comes off as a humblebrag but genuinely wasn’t sure how to handle this. So from a practical standpoint put whatever we need in something safe and have a separate portfolio of whatever is left over that i continue to run as normal. This is so obvious i feel like an idiot for not thinking of it. Any thoughts on rebalancing the self managed portfolio over time? Like once the self managed portfolio gets big enough move it to the “safe” portfolio and then enjoy a higher annual spend at that point in time. I feel like i may be overthinking things…

Hi everyone, I'm in this unique situation that I'm hoping to get some honest feedback on. I have the enviable problem that capital preservation is more important to me now than growing my portfolio. The challenge is, when I look at my historical investment returns for the last 8 or so years (I've invested for longer but it didn't really click until then) you would basically see these periods of extreme out performance during which I have a large percentage of my portfolio (usually 50%-100%) in a single stock or a basket of highly correlated stocks and then periods of pretty average or even below-average performance where I have a diversified portfolio of investments that I feel good about but they're not on the same level as my "high-conviction" ideas. I tend to only get a truly great investment idea every 1-3 years. So, basically all my outperformance is from highly concentrating in my best ideas but I'm fully aware that eventually this strategy will blow up. Not because I invest in risky companies or use leverage but because I'm bound to eventually miss analyze something important or wake up one morning to some unforeseen black swan. I also have a family now unlike when I was younger and more money than we need to support our lifestyle so capital preservation and to a lesser extent income generation really should be the priority over growth. My top ideas to fix this are: 1) Invest everything in some sort of balanced indexed portfolio or find someone else to manage the money. The thought of this kind of bums me out as I really do like investing and it feels like I have a very lucrative skill that I'm just wasting. Psychologically though, by separating myself from investing I know I won't be tempted to get highly-concentrated when I get really excited by an idea. Sort of a take your chips off the table and go home approach. 2) Broad market index as the default but then set an arbitrary portfolio limit (25%?) for my truly high conviction/uncorrelated ideas. Find someway to enforce this limit (maybe make my wife have the password to our brokerage account and place the trades for me?). This seems like the most logical strategy but I'm worried that from a practical standpoint I'll get too bored only making an investment decision once every year or so and that will lead me to forcing ideas I'm not 100% confident in. 3) Due what normal investors due and try to create a more diversified portfolio of companies with stricter limits on position sizing. This is obviously what most investors strive for but everything outside of my truly best ideas tend to end up as just okay results. I do think that this process can help generate great ideas so it's not entirely worthless but I'm not confident I can pull it off well. I know other investors on this forum have similar high-concentration strategies and would appreciate any advice you can give on managing risk. I'm pretty sure Ericopoly had a very similar situation but I don't believe he posts on this board anymore. Thanks!

Jan 2027 calls on equinox gold. Post merge the company is trading sub 2x 2026 EBITDA at spot gold.

They wont, austerity is never politically popular it’s far easier to just print your way out of it. The Supreme Court will remove FED independence by summer and we’ll have some form of yield curve control by the fall.

Gold declined during the tariffs because everything declines when you get that sort of sell off and the margin calls come. Just look at its relative strength during and after. I’m not suggesting to own physical gold as a retail investor. What I am saying is as an institution or central bank when everyone says there’s no alternative to the USD they’re wrong. Gold provides a reserve currency function without counter party risk. It’s funny you mention land because i was just reading about how land barrons tried to get the bank of england to collateralize land as fiat in the 1690s but it never took off for somewhat obvious reasons. My gold royalty stocks and miners are the reason I am up 25% YTD while the broader market is down. I will likely sell some to rotate into beaten down stocks opportunistically but it’s not like these miners are expensive (the opposite). Trump has made it clear the US does not want to be the reserve currency of the world and as a foreign national or institution (particularly china) you need to start wondering if your USD investments are safe from potential confiscation or debasement. That sounds like hyperbole but the fact that it’s even remotely possible means many owners will be looking to sell. Gold miners or royalty cos today are very similar to buying oil and gas stocks AFTER the covid vaccines were announced in 2021. Check out VOXR if you want a safe play on the precious metal space. Skate to where the puck is going and all that.

The obvious answer is gold both in a historical context and based off of central bank policy ever since the US weaponized the dollar against Russia. Just look at the price action recently and since covid. Global currencies get devalued, debt devalued, real assets are the place to be.

Until the new chair gets appointed next May then it’s YCC and money printing for everyone.

Puts spreads. Buy $510 sell $490. I don’t usually hold to maturity and would sell on any spike in vol but given that these are hedges for a very specific scenario i probably would just hold.

I started buying out of the money SPY puts on Friday with a Dec/Jan expiry. My portfolio is up nicely for the year and despite the flash crash volatility is cheap again and the S&P is close to all time highs. I don’t want to sell my current holdings so this should give me some cash to deploy if things turn for the worse. On the economy side, unemployment is trending upwards like a recession is coming. Bankruptcies and delinquencies are doing the same. The election means any policy response will be delayed. FED is unlikely to cut significantly until it’s obvious to everyone that the economy has turned over. A lot of the positive data out there has been consistently revised downwards over the last year or so. I could be wrong obviously but if i’m right it’s likely a 10x return and if i’m wrong i lose 5% of my portfolio so whatever.

I’ve been seeing IP address banned for the last few weeks whenever i try to login. If i skip the login page and go directly to the forum i’m able to use the site. Not sure what will happen when the cache eventually resets and my credentials are no longer pre set. i don’t use a VPN and it appears to be tied to my account not the IP address after trying the site in a few different spots.

@Gregmal I’m glad you found something that works well for you. My average holding timeframe is 1-2 years. I use macro to help find undervalued securities based on the cycle. Being a value investor and keeping on top of the macro situation aren’t mutually exclusive. as an aside, I did try my hand at short term market timing and I promptly lost a bunch of money. I’m sure certain people are good at it but i’m not one of them. At least it was a valuable lesson to stick with what you’re good at.

I’ve done really well reading the macro tea leaves. Picking bottoms for cyclical stocks/industries has easily been where i’ve made the most money. That doesn’t mean i always run to cash when i see dark clouds. I would say there’s a greater than 50% chance we’re heading for another slow down in the next year but i’m still fully invested because my investments should do just fine anyway. I would actually love a recession because it would be a great opportunity to pick up some copper/aluminum miners on the cheap. i fully respect the I only buy and hold great businesses mentality. It’s a proven winner. That doesn’t mean it’s the only successful way to invest.

I think you’ve pretty much summed up the breakneck rise in desirable real estate globally. People constantly ask who can afford to live in places like Hong Kong, Vancouver, NYC and the answer is the rich can. It’s less about living there though and more about preserving wealth.

Agreed with the assertion that the index itself has become sort of its own fund or even asset class. I’m not sure this is an entirely new phenomenon. You’ve always had the cycle of an underperforming sector gets beaten down, funds that focus in that sector are forced to redeem and it gets beaten down some more until the next up cycle. This is just an interesting situation where momentum/large cap is riding the hot hand and value/small cap is out. Eventually the S&P 500 becomes so overbought that it underperforms other indexes and investing factors. Then you get outflows and maybe some mean reversion. I think passive indexing will remain the dominant investment strategy you’ll just see those passive flows moving into other geographies and factors.

There’s no money chasing small cap value (it’s all gone to passive large cap) so if a company beats expectations no one notices. Without price discovery you need to find companies willing to initiate large buybacks if you want to get paid. In the meantime, the most overvalued components of the S&P continue to attract ever larger inflows.

North American Construction Group would be my pick. It’s cyclical though and that turns a lot of potential investors off. I think most of the successful consolidators at one point fit the criteria of small cap growth.

Strongly agree with this. I’ve been cautious all year as global (ex US) growth has decelerated and the FED put up a good show of higher for longer interest rates. It made other central bankers reluctant to cut because of the fx implications. I thought there was a real chance that powell would go through with it but clearly today they’ve signaled otherwise. Now we can get a big round of global easing and all those beaten down value and industrial stocks can rip higher. Merry Christmas