9 Jan 2021
Dear Fellow Investor,
In the last 7 out of 8 world recessions recovery favours value stocks which outperform growth stocks. Reasons include stimulus and rising interest rates. This will benefit banks, commodity related companies and beaten down consumer stocks.
Weekly chart of Berkshire B shares with a 50 week moving average.
Berkshire B is a holding company founded by Warren Buffet which holds a portfolio of value shares. We hold this for some of our PGWA accounts. It is trading above its 50 week moving average and just broke a new high confirming the up trend. Major holdings include Bank of America, Kraft, and some recently purchased Japanese conglomerates with a focus on commodities. They recently sold a large block of Apple shares and bought Japanese value shares and Barrick Gold. Buffet is anticipating a return to inflation as evidenced by the recent positioning of Berkshire.
TLT moves inversely to interest rates. Price is trading below its 50 week moving average and has broken support. The down trend shows gradually rising rates. Bank shares benefit from higher rates and that is why bank shares are rising. All 3 major Singapore banks rose strongly Friday.
US T Bonds are the benchmark for world interest rates and bear watching as central banks flood liquidity into markets.
Joe Biden and his Democrats will accelerate the debasement. That is why commodities, gold, stock markets and bitcoin are well supported.
Keep safe
Bill
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