My plan for this business cycle

My working assumption is that the new business cycle that began in 2020 will be similar to 2003-2007 business cycle.  In September of 2020, I went overweight on commodity stocks, base metal stocks, oil and natural gas, farmland sand agriculture stocks, REITs and home builder stocks and emerging market stocks.  This business cycle should be a weak dollar cycle.

Prescient post from 2009 revisited

https://inflationresistant.blogspot.com/2009/05/inflation-proof-investments.html

I wrote about three stages of inflation in 2009. Sometimes, you have to read your own younger self. I wrote that in the final stage of inflation, there will be new acronyms. Indeed, it was FANG this time. Business cycle is finally coming to an end. All three stages of inflation are over and hopefully, you did well in first two stages and are surviving the final stage.

Today, I will write about bear market.  Bear market takes its toll in three vicious ways -
1) Downward spiral of prices. While most people focus on where prices will bottom, they underestimate the stealthy impact of two other ways. They are discussed below.
2) Duration of bear market. This is most lethal and underestimated by people, who are looking to be next Warren Buffet and jump in too early. Bear markets can last months and years. As the saying goes, Markets can stay irrational longer than you can stay solvent.
3) When the next bull does arrive, it is tepid for a long duration. and people do not believe it. It is likely to start in asset classes that was not widely held in the last bull market and therefore holders of the last bull market will not be made even. 

What if we had a bull market and nobody came?

Public has not been participating in this relentless rising market. Yet the markets have been rising on back of central bank buying and corporate buybacks. Until there is a death cross (50 dma crosses below 200 dma), this is still a good market to trade up. Buy the dips and sell the rallies.

Indian government blames the hoarders for inflation but not the central bank

The new Indian government is back to old tricks. They are trying to blame the hoarders for rise in vegetable prices. When stock prices rose five fold between 2004-2008, did you ever hear the term stock hoarder? When real estate prices went through the roof, did you ever hear the term real estate hoarder?

When you print money, it goes into financial assets initially and financial assets become a bubble. If the central bank does not allow financial assets to deflate during an eventual recession, the economy goes into stagflation where commodity prices eventually rise faster than financial assets. What people want is that stocks and real estate should rise 100 fold but commodity prices should not rise at all. That is a mathematical impossibility.  Prices of food items will rise in India even if you destroy all the storage and outlaw hoarding. There is no difference between a hoarder and stock investor. They are both in essence momentum traders. In a money printing environment, prices would rise regardless.
If you want to end inflation, stop money printing. And stop blaming the hoarder. Prices have been rising for sixty years, ever since silver coinage was removed. Could anyone have hoarded onions for six decades? Also, why are milk prices rising? Are cows hoarding the milk? 

Where are we in the business cycle?

We are in a late business cycle. This is when momentum traders make money. Early part of the business cycle is when you can be a value oriented long term business cycle and later part is when you have to be a momentum trader with tight stop losses. It's still too early to go short. However selloffs in treasury bonds can also be looked at buying opportunity.

The Hindu trinity and the separation of powers into legislative, executive and judiciary

The Indian trinity consists of Brahma, Vishnu and Shiva. Brahma, the creator of laws, is the legislative branch. Vishnu is the executive branch of the government. Shiva is the judicial branch of the government. Brahma has only one temple left. The legislative branch loses all it's power over time. Shiva, the judicial branch, retains some influence. But it is the executive branch or Vishnu that emerged as the most powerful deity over time. An interventionist Vishnu took incarnations of different animal and human forms and tried to set things right. But that did not prevent the kaliyuga or dark ages from happening.

As the American democracy matures, these are things to ponder over.

Surveillance state no longer a conspiracy theory...........

http://www.youtube.com/watch?v=UL8q0xv8gUY

Wasn't in 1984 but in 2014. Welcome to Obamanation where Snowden goes to jail but Corzine goes free.

Every post (including this one) is being recorded for eternity by NSA. And google, yahoo, facebook, apple, microsoft are all involved.