Things You Can Do to Hedge

Were you forwarded this email? [Sign-up to Rude Awakening here.]( [Unsubscribe]( [The Rude Awakening] It’s come to our attention that you might be missing out on extra benefits exclusively for Rude Awakening subscribers. Check out our website where you can find archives, updates, and everything else included in your subscription. You can access it by [clicking here now](. Things You Can Do to Hedge - I’m not allowed to give stock recommendations, but here are some broad strokes. - Also, keep up with the Rude Pillars to Financial Freedom. - A second passport, an online business, and some crypto come in handy now. Recommended Link [Blood-curdling SCREEEAAAAAMMMMM!!!!]( [Click here for more...]( Your future just ended. And whether you realize it yet or not… Everything you have from the money in the bank, to the stocks sitting in your 401k… Are all being given to you on loan. Because if the [information]( former advisor to the CIA and Pentagon]( just revealed live on camera is correct. These markets have already crashed, and it’s only a matter of weeks (maybe even days) before everyone catches on. The markets just let out a blood-curdling SCREEEAAAAMMMMM… And you don’t have long to act. All of your wealth could be in danger... [Click Here To See Why]( Sean Ring Editor, Rude Awakening Happy Hump Day! Forgive me for quoting that awful bastard Lenin, but he’s got this one right: “There are decades where nothing happens, and there are weeks where decades happen.” It sure feels like a decade has happened over the last week, especially if you’ve been long equities. We had another down day yesterday, and we’ve started to string quite a few together. Of course, we’ll have some up days from here. But you still have time to build the proper defenses for yourself and your portfolio if you haven’t already. The BTFD days (Buy the F*cking Dip!) may well and truly be over. That depends on how antsy Jay Powell gets about his punch bowl. I think that also depends on whether Joke Biden will start to pressure Powell into staying his hand on rates. The problem is Powell admitted [the Fed got inflation wrong]( and [has confirmed the Fed will raise](. So the Fed currently remains steadfast or stubborn, depending on your viewpoint. But I wouldn’t completely rule out a last-minute stay of execution from Powell that whipsaws the market. It’s a low probability play, I admit. But it’s possible, especially in a midterms election year. Anyhoo, here are the things I think you should have a look at to protect you and yours from volatility we haven’t seen since 2008. Relative Rotation Graphs Before I get into the things you may do to shield yourself from the coming onslaught, let me introduce you to relative rotation graphs. [Julius De Kempenaer]( at RRG Research invented them, and I use them on stockcharts.com. They’re incredibly useful for seeing how asset classes, indexes, sectors, and stocks have performed over time relative to the market. To put it plainly, they show what’s hot and what’s not. I won’t explain the ins and outs. Stockcharts gives a [nice tutorial here](. What you need to know for now are these things: - The chart is a scatterplot, not price against time. - There are four sectors: leading, weakening, lagging, and improving. - Stocks rotate (usually) clockwise. That is, a stock will lead, then weaken, then lag, then improve, and then lead again. Here’s an example of what’s going on right now, from an asset class perspective: We all “knew” commodities were shooting the lights out. Now here’s our proof. Both the GSCI (Goldman Sachs Commodity Index) and the Bloomberg Commodity Index Total Return (total return includes all returns, not just capital gains) have earned well into double-digit returns over the last five weeks. Though you might think you’ve missed the boat on this, I’m pretty sure you haven’t. In fact, [Putin is about to announce commodity export bans to Western countries](. This came just after Biden announced the US would ban imports of Russian oil. Good luck at the gas station! Or is it? Bear with me here. Richard Mayberry, right after 9/11, said to buy aerospace and defense stocks, as the US was gearing up for war. You may think that’s immoral, but it’s smart investing. (I wish I listened!) How did that work out? Amazingly, even if you’re still hanging on today. In essence, whatever those investors paid out in military tribute to the government - sorry, taxes - they would have made up with this investing strategy. Easily. Let’s apply that playbook to the here and now, though it certainly won’t be a 20-year trade. If you buy the energy and commodities stocks that’ll benefit from Biden’s insane sanction strategy, you’ll offset the higher costs of your gas, cereal, and pork. There are a few ways to explore this. Energy and Commodities This is the obvious asset class to be in right now. No, I don’t think you’ve missed the trade. This may last well into 2023. Gold Gold has broken out to over $2,000. Finally. Jared Dillian of the Daily Dirtnap says he’s hanging on until $2,600. Jared is one of the savviest traders out there, so it’s a good bet we’re heading up another 30%. Silver This one is more of a bet, but it, too, has finally shown some signs of life. If it gets above $30, we’re probably heading to $50. Recommended Link [The Metaverse Story You’re NOT Hearing…]( [Click here for more...]( Everywhere you turn, people are raving about the Metaverse. Facebook’s now called Meta. Microsoft’s CEO says, “The Metaverse is here.” Apple’s all in too. But there’s a critical piece of the Metaverse story you’re NOT hearing about… [Click Here For Full Details]( XLE Back to the RRG graph. This is a snapshot of the S&P sector ETFs. XLE is in the upper right-hand corner, killing the rest of them. No surprise there. If we break down the XLE by its constituent stocks, you get this: Again, I can’t recommend stocks for you, but here’s a nice place to start your research. It’s worth noting that while [Warren Buffett added to his position in OXY, Carl Icahn divested himself of it](. SPY Puts Buying put options to protect your existing portfolio is a relatively cheap hedging strategy. In [yesterday’s Rude]( I wrote that the SPX might head down to the 3,200 area, nearly a full 1,000 points south from here. If you have a portfolio of familiar large-cap names or a portfolio that doesn’t have energy in it, you may want to look at this strategy. Selected Real Estate In this, I like two particular ideas. Mark Moss, who’s recently done a great Wiggin Session with Addison, favors [high-end properties]( that you can hole up in while the mess continues outside. That’s assuming, of course, we’re not all glowing in the dark soon. I also like multi-family houses near hospitals, fire stations, and police stations. Those people aren’t going to lose their jobs. The Rude’s Plan To reiterate, the Rude’s Four Pillars of Financial Freedom may be overkill, but I want to remind you this is more about the freedom part than the finances part. Second Passport Hopefully, you’re already working on this, but if not, start now. Even if you can’t get a second passport, think about a second residence. There are plenty of places accommodating second residences, from Ecuador to Panama to Portugal. Online Business Visit my friend Sean D’Souza’s [5000bc]( club. I’m there already, and I love it. It’s cheap - indeed the most affordable membership site for online business I know of - and it’s chockfull of helpful information on how to take your skills and turn them into something valuable for your clients. Even if you don’t have clients yet! (That’s an affiliate-free link, by the way…) Crypto I know crypto has been hit hard lately, but I still think it has a place in a well-balanced portfolio. You don’t have to put in much. Just dip that toe in and get used to the water. Health Finally, get your health to the best level you can. In an age of mandatory vaccination - which contravenes the Geneva Conventions, by the way - you need to protect yourself for the sake of your family. That’s what they’re trying to destroy, after all. Wrap Up Well, there’s lots to do. But if you get it done, you’re ahead of 99.99% of humanity. Right now, they’re the deer in the headlights. But you? You’re the (wo)man with the plan. Until tomorrow. All the best, Sean Ring Editor, Rude Awakening P.S. For a chuckle, these are some of the choice memes my buddy at Libertarian Memes sent along. Have some fun with them. 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