Postcards: 1993 and the State of the Republic

Why does this one ETF exist? What six government errors in 1993 caused our current cost of living crisis? And let's reveal our strategies for investing and trading in 2024.                                                                                                                                                                                                                                                                                                                                                                                                                 Forwarded this email? [Subscribe here]() for more [Postcards: 1993 and the State of the Republic]( Why does this one ETF exist? What six government errors in 1993 caused our current cost of living crisis? And let's reveal our strategies for investing and trading in 2024. [Garrett {NAME}]( Dec 19   [READ IN APP](   --------------------------------------------------------------- Dear Fellow Expat: Greetings again from Baltimore… the opposite of Southwestern Florida. Last night I had dinner with my parents at their very Irish restaurant. For 23 years, I’ve been visiting the An Poitin Stil in Maryland. And I tend to eat the same four things every time I go. So, last night, I decided to make a change. I would try something on the menu I’ve never had. I chose - the surprisingly “Irish-sounding” Peruvian Chicken. [Don’t think about it too much, or you’ll get a headache.] They were out of it… and it’s coming off the menu. So, I tried again. This time, the very Irish-sounding “Hawachi Ribs.” (Hawaiian) [Remember, this is an Irish restaurant.] Also, they didn’t have them. So… I ended up with the same Irish chicken tenders I’ve had for the last 23 years. And they’re very worth it. I mean, why change from a good thing? Speaking of things that don’t go together, I was doing some research… [Upgrade to paid]( The Catholic “Values” ETF”? You may have noticed that exchange-traded funds have exploded in recent years. Everyone with a theme came up with their own one. There are “values-based” ETFs. And “ESG-based” ETFs. And sector-based ETFs. There was even a Knights of Columbus Catholic Values ETF, which invested in companies with “Catholic” values in their missions. Unfortunately, that ETF underperformed the market... Now, remember, ETF managers don’t care about performance. They only care about matching or beating their benchmark - they make money on expense fees. The S&P 500 and stocks like Apple, Microsoft, Tesla, Alphabet, and Meta were crushing the market, and thus the S&P SPDR ETF (SPY) was outpacing all of these other ETFs. Rather than stick to their values, ETFs like the Knights of Columbus Catholic Values ETF did two things. They started buying Apple, Microsoft, Tesla, Alphabet, and Meta - the stocks responsible for their index beating them. Then, they changed the fund name. It’s now the S&P 500 Catholic Values ETF (CATH). Its top holdings are - in order of weight… Apple Inc. ([AAPL]( Microsoft Corp. ([MSFT]( NVIDIA ([NVDA]( Tesla ([TSLA]( Alphabet ([GOOGL]( Meta Platforms ([META]( Alphabet ([GOOG]( Berkshire Hathaway ([BRK/B]( Proctor & Gamble ([PG]( and the Home Depot ([HD](. The only stocks missing from the top 10 on the S&P 500 weight are Amazon.com ([AMZN]( and Broadcom ([AVGO](. So… what… if anything… says “Catholicism” about any of those ten stocks? Anything? Anyone? … Well, hold on. Wait a second. Okay… okay. Let’s give them one… The Home Depot. After all… Jesus was a carpenter. [Upgrade to paid]( 1993 and the State of the Republic As you know, I’m working on this column called “1993.” I looked down last night and realized I’d written 3,860 words so far. And I’m only 80% done. That’s WAY too long for a single post. So, I will carve it into six articles with a staggered release calendar over the next two weeks. Then, I’ll release our Action Plan for 2024 and the Reversion Momentum Portfolio at the start of the year. I’ll tell you how to get both in a moment. But first, I wanted to share with you something I wrote this morning. [It’s part of the Republic Risk Letter](. Many people ask me what we do here in the Florida Republic. What are our strategies? What matters most in the market? I’ll show you. This is who we are at the Republic. What we do… And why we do it. “In the Florida Republic…  We never trust the [market or media narrative]( and [ignore Goldman Sachs](. [We monitor global liquidity]( because it drives the market's risk-taking.  We buy [when all the insiders buy](. The greater the collective strength, the more bullish we become. The less they buy, the less optimistic and more cautious we are. We buy when the market is oversold in the measures of the [Relative Strength Index and the Money Flow Index simultaneously](. We are [greedy when others are fearful.]( We buy when the [lights turn Green on our Equity Strength Signals]( after being red [for a few weeks]( and everyone is panicking. We never “buy” options - only [sell them to collect premiums]( enter long-term positions, or generate income when our signals are positive. We sell or hedge [when an Index signal goes red]( when everyone is still bullish. In fact, we have [SIX RULES for when the signals turn negative](. We use the [RSI, MFI, MACD, and ADX]( to identify breakouts and breakdown stocks (from the excellent book “Trading Stocks By the Numbers” by Grant Henning).  [We buy beaten-up ETFs]( emerging market discounts when [political and country risk data improve]( and people aren’t paying attention.  We sell put spreads on stocks with solid insider buying below the price the executives paid when our sector readings are positive with a target of an [80% probability]( of profit and at least a 15% return over 45 days… [like the Warren Buffett trade]( We buy or trade (selling puts) on stocks with [high F scores, low Graham numbers, and low multiples]( because they have less downside and [greater mean-reversion upside](. And our [Equity Strength Signals]( Our signals are based on measuring a buying and selling anomaly around the collective performance of stocks as a measurement of capital flowing in and out of the market… with confirmation using technical analysis. We bring it down to a single color: Green or Red. Green means go. Red means stop. And… with this focus, we don’t need to and never, ever chase… because when people start doing that, [we know what they don’t. The BIG move has already happened](. Thanks to these signals, we avoided the COVID-19 2020 selloff, every major selloff last year, [the March regional bank crisis]( and the recent selloff fueled by a massive yield spike. [It’s all on the record.]( And once you see how all of these things work together, you can’t unsee it.  You won’t want to. It’s like the Matrix.  We then enjoy our lives because we have no control over the [central banks or the politicians]( running this system into the ground.  There will be more of these selloffs.  [More people like Jim Cramer]( will be telling you to dump everything when things look bleak because they’re not digging into the [actual plumbing of the financial systems]( the anomalies that are so critical to measuring the real collective forces of our markets.  I know this is all part of a big contrarian view… [but it’s ours](. Some people think we’re nuts or overly simplistic. But it works very well. Plus, it’s backed by [a decade of academia]( and real-life experience, 20,000 hours of research, and the [timeless collection of readings and analyses]( some of the best money managers and [financial academics]( I’ve encountered in two decades. And, of course, invaluable conversations with Tim Melvin](. So, sit back, follow the signals… trade with the insiders… learn the fundamentals and the technicals… and enjoy.  [Upgrade to paid]( Now… back to 1993. Let’s Get to the 1993 Story Six significant errors happened in 1993. Each has compounded on top of the next to create our cost of living crisis. If you want to know why our roads are terrible, why our taxes are high, why our government is incompetent, why economic inequality is so bad, why inflation continues to surge, and why you get less for more… this series will open your eyes to what’s really happening across America. It’s not a tale of right versus left… It’s a story about government malfunction, bad incentives, and policy consequences. This is the release schedule, starting tomorrow: - The Massive Monetary Policy Error That Crushed the Middle Class (12/20) - This Fiscal Policy Foul Took CEO Pay from 87x Worker Pay to 395x in Six Years. (12/22) - The Nominee Who Made Wall Street Bailouts Permanent While Pocketing $125M (12/24) - The Hiring of the Housing Crisis’ Father and His Role in Exploding Home Prices (12/26) - The “Red Tape Solution” Decimating U.S. Supply Policy and Our Energy Sector (12/28) - The SEC Approval That Crushed Price Discovery and Fueled Volatility (12/30) - The 2024 Republic Action Plan and the Risk Reversion Portfolio (January 1, 2024) So, let’s get ready… I’ll provide my regular market commentary and let you know if anything has changed in the Big signals. Sign up for the [Republic Risk Letter]( to access individual sectors and the 2024 Risk Reversion Portfolio. And fair warning… [the price of the Risk letter]( will roughly double in early 2024. That’s because we are expanding our audience to the institutional level. If you sign up [at today’s annual price]( you’ll never pay more than your initial price. Also, Founding Members will get updates on the Risk Reversion Portfolio and instructions on managing them with our signals… first access to our 2024 podcast. [Upgrade to paid]( Stay positive, Garrett {NAME} Secretary of Defense You're currently a free subscriber to [Postcards from the Florida Republic](. For the full experience, [upgrade your subscription.]( [Upgrade to paid](   [Like]( [Comment]( [Restack](   © 2023 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()