I believe 2024 will be the year of central bank rate cuts and a new liquidity cycle begins which will likely flow into gold, commodities, and emerging market stocks.
The above chart shows recent data from the Permian oil field. It appears that well performance is beginning to decline. This was expected as all oil fields eventually peak, plateau, and decline.
Goehring and Rozencwajg wrote about the neural network work they did on the Permian oil field and their forecast for it reaching peak production around this time. The Q42022 report, The End of Abundant Energy: Shale Production & Hubbert's Peak details this information.
Time for Japanese stocks?
The Fours Behind The Compelling Opportunity In Japanese Stocks
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Key Points:
4% Real Returns due to Fair Valuation: Japan broad equities look about fairly valued and priced to deliver 4% real returns.
4 New Initiatives: Four recent policymaker initiatives should provide support for company fundamentals and shareholder returns.
4% Alpha from Tilting to Small Value: Active managers who dial into cheap small value stocks stand to capture an additional 4% of returns.
4% Tailwind from Cheap Yen: If the yen reverts slowly back to fair value, USD-based investors stand to pick up a 4% tailwind.
I have been slowly adding some Japanese stocks to my portfolio. I am unsure if I will add them to the AIA portfolio. Not because I lack confidence in Japanese stocks being undervalued. On the contrary, it is possible that Japanese stocks have entered a long-term secular bullmarket. It is just that the AIA portfolio is looking for multi-bagger stocks.
Investment Wisdom
And finally, an oldy but a goody that I try and go back and read once a year at least.
How a pig and rice farmer beat the stock market.
How Mr. Womack Made A Killing Forbes Oct 2, 1978
"Would you like to see a man who has never lost money in the stock market" he asked wearily.
The broker looked up at me, waiting.
"Never had a loss?" I stammered.
"Never had a loss on balance" the broker drawled, "and I have handled his account for 40 years". Then the broker gestured to a hulking man dressed in overalls who was sitting among the crowds of tape watchers.
"If you want to meet him, you'd better hurry", the broker advised. "He only comes in here once every few years except when he's buying. He always hangs around a few minutes to gawk at the tape. He's a rice farmer and hog (pig) raiser from down at Baytown".
Guess what the secret was? Buy undervalued securities and sell them when they reach full value. The whole article explains the simplicity of making money in the stock market. I think we complicate things by chasing a fast buck and not having patience. The whole article is worth a read.
To your investing success,
John Polomny
Editor, Actionable Intelligence Alert