Stolen Picasso

Posted on Sunday, May 27th, 2018

My wife stole my Picasso!! Great story making the rounds of late. A billionaire investor was very proud of the $50 million Picasso that hung over his bed. His wife, being a fairly good artist, quipped sarcastically that she could paint that! The billionaire investor quickly dismissed his wife’s claim. Years later, after the divorce, and walking into that bedroom each night it dawned on him to look at the picture a bit more closely. It turns out that she was a pretty good artist. Know what you own.

Jeff Gundlach held another webcast this week and shared his views on the market. They are always worth the time. Gundlach is still focused on the 30 year bond and the critical level of 3.22%. We had one close above that number but Gundlach is looking for two consecutive closes above 3.22% which would signal the end of the 30 year bond bull market in his view. (The 30 year closed the week at 3.09%.) However, we see that there are major short positions in the bond market and it is our feeling that those positions may hold interest rates down for a bit. Remember, when everyone thinks something is going to happen – something else will.

While we have a trucker shortage here in the US, truckers in Brazil are going on strike. Gasoline prices in Brazil are rising so quickly that truckers cannot make any money. The rising dollar is having an impact around the world in emerging countries like Brazil, Argentina and Turkey. We won’t even mention the disaster that is Venezuela, a once proud country with major oil reserves. Keep an eye on emerging markets. Their pain can cause waves throughout the rest of the developed world.

We have been telling you to keep an eye on Bitcoin. It is trading at a new recent low below $7300 down from $9800 three weeks ago.  The crypto currency market is shaping up as a temperature gauge for risk. It may be the canary in the coalmine for other risk assets. $6777 is important support for bitcoin. The S&P closed the week at 2721 or about 55 points above our fulcrum of 2666. It has been 5 full months since we first hit 2666. Remember, we thought that we could spend 9-18 months here. The S&P has been stuck between the 100 day moving average and the 200 day but in recent days seems to have found support at the 100 DMA. That gives a slight edge to the bulls.

I think we aspire less to foresee the future and more to be a great contingency planner… you can respond very fast to what’s happening because you thought through all the possibilities, – Lloyd  Blankfein

To learn more about us and Blackthorn Asset Management LLC visit our website at www.BlackthornAsset.com .

A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. – Winston Churchill

 

Disclosure: This blog is informational and is not a recommendation to buy or sell anything. If you are thinking about investing consider the risk. Everyone’s financial situation is different. Consult your financial advisor.