Turkey, Argentina: Be cool, calm and contrarian, but not greedy
I will hit all all the questions at the bottom of this email (teaser, see?) and any other questions you might have in this week’s Live Q&A Chat, tomorrow morning at 9am ET.
There was a slow fade lower in the stock markets today. Meanwhile, the latest headline on Marketwatch is: “Stock-market investors should see this Turkish crisis as a buying opportunity.”
Like I’ve been saying, there’s a lot of whistling past what will now be the second major developing economy to implode in the last few months, following Argentina’s recent fail — Argentina’s own currency was pushed to new all-time lows today in another worrisome decline that’s not quite as quick a move as the collapse of the Turkey lira.
It’s not that any or each of these particular economies’ collapse would collapse our own markets, but aggregately there are a lot of cross-currents, trading wars, currency spikes/collapses and other potential triggers that I’m staying cautious and continuing to build hedges.
By the way, there are certainly some people sounding the “It’s all about to come crashing down now!” alarms, but almost all of them have been saying that about every headline for the last eight years while we’ve been riding this Bubble-Blowing Bull Market.
Here’s a question I got from as Trading With Cody subscriber about my GLD buy Trade Alert this morning:
Q. Cody, I get your reasons for buying $GLD but sort of puzzled on risk/reward. If you pull up 5Y chart on GLD, there is only 20% difference between its peak low and high. 1Y chart shows only 10% difference. Even if GLD starts taking off, do you think it has enough upside or are you ‘trading’ for 5 to 10% gain? Also what’s interesting while checking it is that, 1 year chart shows GLD down by 10% from its peak whereas JNUG down 50% from its peak! Miners seem to swing a lot as you always preach.
A. Yes, GLD doesn’t have the potential upside that JNUG might, IF GLD were to rally like I expect (and I expect GLD could rally 20% or more in the next year, if the developing markets/economies around the world get hit) but GLD certainly also doesn’t have the downside potential of JNUG either.
Cody back in real-time. So listen, let’s be cool and calm and contrarian. But let’s not be greedy!
Questions already in the queue for tomorrow’s chat:
Hi Cody, Got a question for you for the Q&A. I believe you rated real estate an 8 in your latest positions. Would you consider global warming a factor in deciding where to make real estate investments? Thanks!
Hey Cody any thoughts on CTRL? I saw that they brought Charlie Kindel on board from amazon recently. I’m worried that as amazon makes its smart home appliances more user friendly demand for CTRL’s services will drop.
Cody….can you comment on earning calls for TST, CALX and WDC?…..thank you.
