Portfolio Mar-2023

March 14, 2023 All posts

T-Bills (IB01)

Short duration T-Bills pretty much tracks the interest rates:

Thus should protect cash from inflation:

source

If the Fed were to cuts interest rates, the value of owned Treasuries would increase even more.

20+yr Treasury Bonds (IDTL)

Failures of Silicon Valley Bank and Signature Bank are showing material signs of the economy starting to break. The thesis from Portfolio Dec-22 still holds. There might not be much room left to hike interest rates further. That being said, might wait for an official Fed pause to buy more, since the “pause” looks like a good signal:

SPY PUTs

Still holding onto some Sept 2023 puts on S&P 500:

• Leading employment indicators (1, 2) continue to trend downwards.
• Composite PMI ticked up higher, but still at the contraction levels.
• Business credit conditions continue to get worse.

Bitcoin

The G7 countries are going to deleverage one way or another, because of war with Russo-China axis. The central banks are either going to break the inflation by completely breaking the system, creating a cascade of bankruptcies and runs on the banks, or will inflate the currency. My guess is that short-term there will be deflation, but long-term high inflation.

Bitcoin is a good hedge from a Great Depression (unlikely) type of event – the “deposit missing” scenario is impossible. Good hedge from both inflation and hyperinflation:

I use gold as a proxy, since Bitcoin’s history is too short.

As compared to gold, it is just 12-24 words that you can memorize – goes everywhere you go.

USD/EUR

In the process of being moved into T-bills, and Bitcoin.