Crescat December 2020 Commentary: A Golden Opportunity
Crescat Capital commentary for the month of December 2020, titled, “A Golden Opportunity”, discussing that we are still early in a new secular bull market for gold. Q3 2020 hedge fund letters, conferences and more Dear Investors: Buying Undervalued…
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Crescat Capital commentary for the month of December 2020, titled, “A Golden Opportunity”, discussing that we are still early in a new secular bull market for gold.
Q3 2020 hedge fund letters, conferences and more
Dear Investors:
Buying Undervalued Precious Metals
From a timing perspective, the setup for selling overvalued US equities and buying undervalued precious metals today looks exceptional. The gold to S&P 500 ratio just posted its worst monthly decline in 37 years. In our analysis, this relative performance was an end of cycle move for the S&P 500 but only an early inning correction for precious metals. We think the pullback in Crescat’s strategies in November as a result provides an excellent entry point for existing and prospective investors. We remain positioned long precious metals in all strategies across the firm today and short overvalued equities in two of our hedge funds.
Surrounded by speculative excess everywhere, our short positions in select hyper-overvalued US equities remain key tactical holdings in Crescat’s Global Macro and Long/Short funds. November’s market move appears to be a last gasp for stocks, which are suspiciously out of sync, with the downturn in the business cycle already in progress. In our view, investor positioning is historically imbalanced based on a composite of indicators:
- The put to call ratio for US stocks just hit its lowest level since 2000
- Options volume has surged to its highest on record
- 21.6% of all call options were bought by small traders, the largest level since the tech bubble
- Median short interest for the S&P 500 has plunged to 17-year lows
- We now have the largest percent of S&P 500 members above their 200-day moving average in 7 years
- Market sentiment, measured by the Investor’s Intelligence, is at its highest level since just prior to the Volmageddon shock in 2018.
- According to SentimenTrader, for the 1st time in 15 years, 60% of their indicators are showing an excessive amount of optimism, the highest reading yet.
The bullish frenzy has been driven by all-time low interest rates and narrow credit spreads. These two factors coincidentally get the highest weight in the Goldman Sachs Financial Conditions Index which recently made a new low-water mark signifying the extreme in the enabling mechanism for today’s speculative imbalances. The four prior cyclical lows in this index precipitated the tech bust in the early 2000s, the global financial crisis in 2008, the emerging market meltdown of 2015, and Volmageddon in 2018.
Small caps, measured by the Russell 2000 index, also look stretched. The index recently had its best monthly performance ever. The index price relative to its 200-day moving average just reached its largest divergence since 1983. While this condition can happen in early bull markets, as well as at peaks, the setup is most comparable to the tech bubble given today’s excessive valuations.
In our view, the downside risk for stocks today is unprecedented. According to our 15-factor model, US stocks have their most extreme valuations in 120 years. Different than prior peaks, the plethora of fundamental imbalances across the broad US equity market is unparalleled to any other time in history. Stocks appear ripe for a spectacular failure.
We Are Early In A New Secular Bull Market For Gold
In November, gold had its steepest monthly pullback in four years, but we believe that we are still early in a new secular bull market for gold. From August 6 to November 30, gold declined close to 14%. This correction was even worse than the abrupt fall of March during the pandemic crash when gold sold off 12% over the course of 10 days. At that time, the bearish narrative for precious metals became prevalent, but those who were able to discern the value in the new early cycle macro trend, and stepped up to buy the dip, were incredibly well rewarded. Gold and silver mining stocks ended up being the best performing industry group in the market over the next four months.
Within the precious metals industry, we are most excited about the opportunity for Crescat’s hand-picked portfolio of premier small cap gold and silver mining companies focused on large, high-grade exploration projects. Crescat’s hedge funds are heavily tilted toward activist positions in this segment where we see the best growth opportunity and value today. As a result of our focus, Crescat’s two precious metals strategies have been substantially outperforming their benchmark, the Philadelphia Gold and Silver Index, since their respective inceptions, especially during the recent industrywide pullback.
Real yields, perhaps one of the most reliable macro drivers for gold, are now suggesting a key turn back up in the metal. Even though US 10-year interest rates have been rising since August, inflation expectations have begun to outpace nominal yields once again. Consequently, real yields are turning even more negative. As shown inverted in the chart below, declining real yields tend to drive gold prices upward. These two lines are now diverging significantly and, in our opinion, strongly suggest that the bull market for gold is poised to resume.
We encourage you to see our last two letters, A Vicious Debt Spiral and As Good As It Gets, and our Macro Deck for further research and analysis supporting our positioning across all Crescat strategies. If you have any questions on investing or Crescat in general, please do not hesitate to contact a Client Service Specialist. You can find both Marek Iwahashi and Cassie Fischer’s contact information below.
Sincerely,
Kevin C. Smith, CFA
Founder & CIO
Tavi Costa
Partner & Portfolio Manager
For more information including how to invest, please contact:
Marek Iwahashi
Client Service Associate
Cassie Fischer
Client Service Associate
Linda Carleu Smith, CPA
Partner & COO
© 2020 Crescat Capital LLC
The post Crescat December 2020 Commentary: A Golden Opportunity appeared first on ValueWalk.
Government
Problems After COVID-19 Vaccination More Prevalent Among Naturally Immune: Study
Problems After COVID-19 Vaccination More Prevalent Among Naturally Immune: Study
Authored by Zachary Stieber via The Epoch Times (emphasis…
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Authored by Zachary Stieber via The Epoch Times (emphasis ours),
People who recovered from COVID-19 and received a COVID-19 shot were more likely to suffer adverse reactions, researchers in Europe are reporting.
Participants in the study were more likely to experience an adverse reaction after vaccination regardless of the type of shot, with one exception, the researchers found.
Across all vaccine brands, people with prior COVID-19 were 2.6 times as likely after dose one to suffer an adverse reaction, according to the new study. Such people are commonly known as having a type of protection known as natural immunity after recovery.
People with previous COVID-19 were also 1.25 times as likely after dose 2 to experience an adverse reaction.
The findings held true across all vaccine types following dose one.
Of the female participants who received the Pfizer-BioNTech vaccine, for instance, 82 percent who had COVID-19 previously experienced an adverse reaction after their first dose, compared to 59 percent of females who did not have prior COVID-19.
The only exception to the trend was among males who received a second AstraZeneca dose. The percentage of males who suffered an adverse reaction was higher, 33 percent to 24 percent, among those without a COVID-19 history.
“Participants who had a prior SARS-CoV-2 infection (confirmed with a positive test) experienced at least one adverse reaction more often after the 1st dose compared to participants who did not have prior COVID-19. This pattern was observed in both men and women and across vaccine brands,” Florence van Hunsel, an epidemiologist with the Netherlands Pharmacovigilance Centre Lareb, and her co-authors wrote.
There were only slightly higher odds of the naturally immune suffering an adverse reaction following receipt of a Pfizer or Moderna booster, the researchers also found.
The researchers performed what’s known as a cohort event monitoring study, following 29,387 participants as they received at least one dose of a COVID-19 vaccine. The participants live in a European country such as Belgium, France, or Slovakia.
Overall, three-quarters of the participants reported at least one adverse reaction, although some were minor such as injection site pain.
Adverse reactions described as serious were reported by 0.24 percent of people who received a first or second dose and 0.26 percent for people who received a booster. Different examples of serious reactions were not listed in the study.
Participants were only specifically asked to record a range of minor adverse reactions (ADRs). They could provide details of other reactions in free text form.
“The unsolicited events were manually assessed and coded, and the seriousness was classified based on international criteria,” researchers said.
The free text answers were not provided by researchers in the paper.
“The authors note, ‘In this manuscript, the focus was not on serious ADRs and adverse events of special interest.’” Yet, in their highlights section they state, “The percentage of serious ADRs in the study is low for 1st and 2nd vaccination and booster.”
Dr. Joel Wallskog, co-chair of the group React19, which advocates for people who were injured by vaccines, told The Epoch Times: “It is intellectually dishonest to set out to study minor adverse events after COVID-19 vaccination then make conclusions about the frequency of serious adverse events. They also fail to provide the free text data.” He added that the paper showed “yet another study that is in my opinion, deficient by design.”
Ms. Hunsel did not respond to a request for comment.
She and other researchers listed limitations in the paper, including how they did not provide data broken down by country.
The paper was published by the journal Vaccine on March 6.
The study was funded by the European Medicines Agency and the Dutch government.
No authors declared conflicts of interest.
Some previous papers have also found that people with prior COVID-19 infection had more adverse events following COVID-19 vaccination, including a 2021 paper from French researchers. A U.S. study identified prior COVID-19 as a predictor of the severity of side effects.
Some other studies have determined COVID-19 vaccines confer little or no benefit to people with a history of infection, including those who had received a primary series.
The U.S. Centers for Disease Control and Prevention still recommends people who recovered from COVID-19 receive a COVID-19 vaccine, although a number of other health authorities have stopped recommending the shot for people who have prior COVID-19.
Another New Study
In another new paper, South Korean researchers outlined how they found people were more likely to report certain adverse reactions after COVID-19 vaccination than after receipt of another vaccine.
The reporting of myocarditis, a form of heart inflammation, or pericarditis, a related condition, was nearly 20 times as high among children as the reporting odds following receipt of all other vaccines, the researchers found.
The reporting odds were also much higher for multisystem inflammatory syndrome or Kawasaki disease among adolescent COVID-19 recipients.
Researchers analyzed reports made to VigiBase, which is run by the World Health Organization.
“Based on our results, close monitoring for these rare but serious inflammatory reactions after COVID-19 vaccination among adolescents until definitive causal relationship can be established,” the researchers wrote.
The study was published by the Journal of Korean Medical Science in its March edition.
Limitations include VigiBase receiving reports of problems, with some reports going unconfirmed.
Funding came from the South Korean government. One author reported receiving grants from pharmaceutical companies, including Pfizer.
Uncategorized
Key shipping company files for Chapter 11 bankruptcy
The Illinois-based general freight trucking company filed for Chapter 11 bankruptcy to reorganize.
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The U.S. trucking industry has had a difficult beginning of the year for 2024 with several logistics companies filing for bankruptcy to seek either a Chapter 7 liquidation or Chapter 11 reorganization.
The Covid-19 pandemic caused a lot of supply chain issues for logistics companies and also created a shortage of truck drivers as many left the business for other occupations. Shipping companies, in the meantime, have had extreme difficulty recruiting new drivers for thousands of unfilled jobs.
Related: Tesla rival’s filing reveals Chapter 11 bankruptcy is possible
Freight forwarder company Boateng Logistics joined a growing list of shipping companies that permanently shuttered their businesses as the firm on Feb. 22 filed for Chapter 7 bankruptcy with plans to liquidate.
The Carlsbad, Calif., logistics company filed its petition in the U.S. Bankruptcy Court for the Southern District of California listing assets up to $50,000 and and $1 million to $10 million in liabilities. Court papers said it owed millions of dollars in liabilities to trucking, logistics and factoring companies. The company filed bankruptcy before any creditors could take legal action.
Lawsuits force companies to liquidate in bankruptcy
Lawsuits, however, can force companies to file bankruptcy, which was the case for J.J. & Sons Logistics of Clint, Texas, which on Jan. 22 filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Western District of Texas. The company filed bankruptcy four days before the scheduled start of a trial for a wrongful death lawsuit filed by the family of a former company truck driver who had died from drowning in 2016.
California-based logistics company Wise Choice Trans Corp. shut down operations and filed for Chapter 7 liquidation on Jan. 4 in the U.S. Bankruptcy Court for the Northern District of California, listing $1 million to $10 million in assets and liabilities.
The Hayward, Calif., third-party logistics company, founded in 2009, provided final mile, less-than-truckload and full truckload services, as well as warehouse and fulfillment services in the San Francisco Bay Area.
The Chapter 7 filing also implemented an automatic stay against all legal proceedings, as the company listed its involvement in four legal actions that were ongoing or concluded. Court papers reportedly did not list amounts for damages.
In some cases, debtors don't have to take a drastic action, such as a liquidation, and can instead file a Chapter 11 reorganization.
Shutterstock
Nationwide Cargo seeks to reorganize its business
Nationwide Cargo Inc., a general freight trucking company that also hauls fresh produce and meat, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Illinois with plans to reorganize its business.
The East Dundee, Ill., shipping company listed $1 million to $10 million in assets and $10 million to $50 million in liabilities in its petition and said funds will not be available to pay unsecured creditors. The company operates with 183 trucks and 171 drivers, FreightWaves reported.
Nationwide Cargo's three largest secured creditors in the petition were Equify Financial LLC (owed about $3.5 million,) Commercial Credit Group (owed about $1.8 million) and Continental Bank NA (owed about $676,000.)
The shipping company reported gross revenue of about $34 million in 2022 and about $40 million in 2023. From Jan. 1 until its petition date, the company generated $9.3 million in gross revenue.
Related: Veteran fund manager picks favorite stocks for 2024
bankruptcy pandemic covid-19 stocksUncategorized
Key shipping company files Chapter 11 bankruptcy
The Illinois-based general freight trucking company filed for Chapter 11 bankruptcy to reorganize.
Share this:
The U.S. trucking industry has had a difficult beginning of the year for 2024 with several logistics companies filing for bankruptcy to seek either a Chapter 7 liquidation or Chapter 11 reorganization.
The Covid-19 pandemic caused a lot of supply chain issues for logistics companies and also created a shortage of truck drivers as many left the business for other occupations. Shipping companies, in the meantime, have had extreme difficulty recruiting new drivers for thousands of unfilled jobs.
Related: Tesla rival’s filing reveals Chapter 11 bankruptcy is possible
Freight forwarder company Boateng Logistics joined a growing list of shipping companies that permanently shuttered their businesses as the firm on Feb. 22 filed for Chapter 7 bankruptcy with plans to liquidate.
The Carlsbad, Calif., logistics company filed its petition in the U.S. Bankruptcy Court for the Southern District of California listing assets up to $50,000 and and $1 million to $10 million in liabilities. Court papers said it owed millions of dollars in liabilities to trucking, logistics and factoring companies. The company filed bankruptcy before any creditors could take legal action.
Lawsuits force companies to liquidate in bankruptcy
Lawsuits, however, can force companies to file bankruptcy, which was the case for J.J. & Sons Logistics of Clint, Texas, which on Jan. 22 filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Western District of Texas. The company filed bankruptcy four days before the scheduled start of a trial for a wrongful death lawsuit filed by the family of a former company truck driver who had died from drowning in 2016.
California-based logistics company Wise Choice Trans Corp. shut down operations and filed for Chapter 7 liquidation on Jan. 4 in the U.S. Bankruptcy Court for the Northern District of California, listing $1 million to $10 million in assets and liabilities.
The Hayward, Calif., third-party logistics company, founded in 2009, provided final mile, less-than-truckload and full truckload services, as well as warehouse and fulfillment services in the San Francisco Bay Area.
The Chapter 7 filing also implemented an automatic stay against all legal proceedings, as the company listed its involvement in four legal actions that were ongoing or concluded. Court papers reportedly did not list amounts for damages.
In some cases, debtors don't have to take a drastic action, such as a liquidation, and can instead file a Chapter 11 reorganization.
Shutterstock
Nationwide Cargo seeks to reorganize its business
Nationwide Cargo Inc., a general freight trucking company that also hauls fresh produce and meat, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Illinois with plans to reorganize its business.
The East Dundee, Ill., shipping company listed $1 million to $10 million in assets and $10 million to $50 million in liabilities in its petition and said funds will not be available to pay unsecured creditors. The company operates with 183 trucks and 171 drivers, FreightWaves reported.
Nationwide Cargo's three largest secured creditors in the petition were Equify Financial LLC (owed about $3.5 million,) Commercial Credit Group (owed about $1.8 million) and Continental Bank NA (owed about $676,000.)
The shipping company reported gross revenue of about $34 million in 2022 and about $40 million in 2023. From Jan. 1 until its petition date, the company generated $9.3 million in gross revenue.
Related: Veteran fund manager picks favorite stocks for 2024
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