Beyond NVIDIA Earnings

Nvidia
Goldman Sachs Group’s trading desk has called Nvidia “the most important stock on planet Earth.” the company has been responsible for over a third of the Nasdaq 100’s gains this year.

The Minimalist Portfolio’s take on it is that while we do understand the importance, we would much instead focus on bigger things in the world that we can measure, like US, Chinese, and German demand, which are allslowing. 

The Inflationary Policy
Ludvig von Mises said it perfectly: "The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy."

 We don’t focus on emotions or politics but rather on constructing a portfolio that can benefit from all the current dynamics. The best way to do this is by using long gold, which has a 90-day inverse correlation of -0.87 vs. USD.

Commodities (Leading Inflation)
At The Minimalist Portfolio, we do not focus on the Consumer Price Index or Producer Price Index but on what leads to these large headline numbers, which are commodities.

We are currently experiencing slowing inflation and growth as we are seeing commodities go down. The less obvious part is that this dynamic will end around September. One place where we can already see this transition is in one of our core sector exposures, Real Estate, through the ticker REIT. This is a leading indicator that shows inflation is reaccelerating. 

The Portfolio
For now, I’m sticking to my defensive setup and staying away from commodities. We will transition to more cyclical and commodity exposure in the fourth quarter.

While the Tech sector is down more than 2% in the 3^rd quarter, our core positions, such as Consumer Staples (XLP) and Utilities (XLU), are performing great! XLU is up +11%, and XLP is up +8%.

If you want to learn how to construct your own macro portfolio, I teach you this entirely for free. Join The Program.