Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.
(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)
Macro Dragon: Trading a Biden Victory…
Potential Pathways & Knee-Jerk Reactions from a Biden | Democrats Congress Victory:
- Once again – this is predominantly from a tactical & event-driven, near-term price action view. Folks should be well aware of the long-term Liquidity Leviathan framework that we have been talking about for months on the Macro Dragon
- Here is the link to Part One which was: Trading a Trump Victory…
- Generally harder to know how much is priced in on Clean Energy & Infra. names, yet next big likely kicker is on Biden & Dem Sweep confirmation – naturally, a function of how we trade going into next wk’s elections (bullish or bearish, neutral) – as well as eventual stimulus.
- In addition to pure plays like TSLA, clean energy etfs such as ICLN, QCLN, SMOG & PBW could see sustained interest. As well as copper, nickel & other base metals.
- Despite a lagging energy sector – the paradox of a Biden admin. = likely better for demand/supply dynamics for oil – the initial reaction is likely to be negative for the oil & shale players, including fossil fuel etfs like XLE, KOL & ENFR. Yet here, KVP would be more inclined to monetize the volatility by cash-secured selling of puts, given the view of wanting to be strategically long the battered energy space (i.e. fossil fuels are not going off a cliff anytime soon, under owned, hated, its contrarian, etc)
- The big tech names & in particular FB, GOOGL & APPL – where it’s a clearer case of monopoly than say AMZN – would likely come under near-term pressure.
- A Biden victory would also likely viewed as generally net positive for China related names & ripple into EM assets as a whole. At the very least the world would expect a more stable & consistent message, as well as rules of engagement.
- Country etfs like FXI (CH), EWZ (BZ), EWA (AU) & China Tech single stock names like Alibaba [BABA] , Ant  Tencent  could see a wave of demand.
Dragon Heavy Rotation
- In case you missed it over the weekend, the first in hopefully a string of exclusive video series interviewing exceptional professionals with skin-in-the-game. We kicked off with Singapore Based, AVM Global Opportunity, run by the talented & always exceptional Ashvin Murthy.
- The timing of the interview is uncanny as it was at the cusp of the last US presidential elections that AVM was launched. It’s worth noting since the interview, the fund has also been nominated for the Singapore’s Best Hedge Fund of 2020, given its consecutive five straight positive months at the start of this volatile year.
- Saxo’s US Election Cheat Sheet Which cuts into the three potential pathways into the elections, probabilities around them, as well as short & long-term positions across equities, bonds, commodities & currencies.
- US Election Countdown: T-minus Five Days – the Youth Vote will be the Decider John Hardy’s latest on the US election – as part of an on-going daily series until the Nov 3 election date.
Start-to-End = Gratitude + Integrity + Vision + Tenacity | Process > Outcome | Sizing > Idea
This is the way