High Oil & Stocks on the Bounce

Macro Perspectives

As we head into Memorial Day weekend, let's talk about oil. The national average price on gas (this time of the year);

• Two years ago = $1.87

• Last year = $3.04

• Today = $4.69

Throughout much of the past two years, the "climate actioners" were convinced that oil demand was rapidly eroding, on the fantasy of a rapid change to a world of ubiquitous electric vehicles and wind farms - they underestimated demand, while simultaneously regulating away (oil) supply.

The result has been ceding control on oil prices, completely, to OPEC - guaranteeing higher and higher prices (no limit).

With that, as we've discussed in recent weeks, the energy price input on the cost of living has become a primary headwind for demand.

Add that to a reset in mortgage rates and a haircut in equity valuations, and we have an economic slowdown that will lower the standard of living, but may contribute to avoiding an economic crash (as the slowdown provides some relief against more aggressive Fed monetary policy action).

The bounce in stocks looks early, and set to continue.

How To Capitalize On This Bounce in Stocks

My Gryning Portfolio gives the average person an opportunity to invest, in a nuanced manner, alongside the world’s greatest hedge funds, while learning the tools of the trade along the way. It's a concept I call "piggyback” investing.

Through the power of the internet, I get to share my insight with investors of all levels - it gives me a chance to help empower the do-it-yourself investor.

My strategy is to ascertain, in a quantitative & qualitative manner, which asset classes and sectors are crowded and to what degree they may develop contagion risks. I specialise and focus in the concept of asymmetric returns (convexity) - i.e. I only want us to spend our time in situations where risk is defined, and the potential profit is multiples of what we pay for a stock.

As a loyal Macro Perspectives reader, I’d like to extend an invitation to you and those that you feel may benefit, to join the Gryning Portfolio service.

It’s a great deal for the money - less than the price of a coffee a day…And I think you’ll find it extremely valuable as we step through what's becoming a more complicated investing environment.

Have a great weekend!

Best,

Alexander