Monday, January 10, 2022

My Two Cents

Times are tough. Stocks and crypto still make sense to me though. Why? Because I don't think nominal yields in the foreseeable future will exceed inflation. That is I expect real yields to remain negative (by design (Governments and Central Banks)). Means "Cash stays trash".

This makes crypto the better cash (way of payment/information, unit of account and store of value)

Which sort of stocks to own then? I prefer growth stocks. Here's why.

The current transition from growth stocks to value stocks is driven by the anticipation of QT and interest rate hikes. I think that transition is transitory because in the mid- to longterm deflationary pressures will outstrip inflationary ones (see my contribution on Inflation versus Deflation). Furthermore a fair amount of value is about to be disrupted by developments in technology (e.g. gene sequencing & editing, energy extraction & storage, electric transport, blockchain, crypto, defi, web3 & metaverse, ai and robotics). So if you are in value stocks make sure you have the right ones.

This is not investment advice. Do your own research. Please also read the disclaimer at the bottom of the blog.