If the markets nuke down, this is what I'm buying
It's time to take advantage of the chaos
We never know for sure, but it appears like markets could go nuclear at some point in the next month or two. If that happens I’m going to be prepared for it. Looking at the charts for March of 2020, one thing that stands out is just how little time there was to pull the trigger on those bargain prices.
In preparation for a potential meltdown this is what I have my eyes on.
Certain buys
1 - Looking to scoop quite a bit of ETH at $1,050. That will be my base position. Will be looking to double my position around $800. Not sure if we get that low, although I’m hopeful we do.
2 - I will continue buying Newmont on the way down. I don’t have a price target, just buying in chunks as the stock price drops.
3 - I’ll also continue with a dollar cost average into silver miners. I may buy silver outright as well. Silver may get crushed this winter with the global recession, but coming out of it I expect industrial demand to pick up as nations look to build out their energy infrastructure.
4 - Treasuries? In an ideal world, my robust position in TLT will rally as the stock market collapses. Historically that’s what would happen. However, the inverse correlation between stocks and bonds appears to be broken at the moment. If TLT rallies as markets crash, I’ll sell bonds to buy stocks. If TLT crashes along with equities, I’ll continue buying TLT.
5 - Lithium stocks. I have to find out how to invest in Lithium. If the lunatics in control of our society insist that we go electric, well it would be nice to profit from that. I have yet to do my research so I don’t have any specific way to play this yet.
Uncertain buys
1 - I may buy more oil equities if prices get cheap enough. For example, I will most likely start dollar cost averaging into XOP if it dips below $100.
2 - Gas companies. I’m interested in Southwestern energy but I need to do more research. This will be a small position that I’ll only put on if prices crater.
3 - I’ll probably pick up some Bitcoin if it hits $10k. The risk reward on that trade is excellent. I think ETH will heavily outperform BTC in the next cycle, but I’m not against having a bit of “diversification” in the crypto space.
4 - I might buy some PCT if it dips to $5 or below. That’s the SPAC I mentioned in my most embarrassing investment newsletter. Despite my failure to make money from the stock, I genuinely want this company to succeed. Purecycle Technologies is a plastic recycling business and if there is one thing I think we can all agree on, it’s that it would be lovely to see less plastic going into landfills and the ocean.
End goal
Assuming that the big crash happens, my hope is fill my bags so that I end up with only about 15% of my assets in cash. I want that cash position in case what I think is the dip, ends up being the prelude to the real show.
If all we do is slowly grind lower (as Tony Greer has predicted will happen), then I’ll gradually fill my bags. In either case, I’m looking forward to buying some assets on discount. As someone who is still about 80% in cash, I say bring on the crash! Low, low, low your stocks, gently down the charts.
How about you? What’s your plan if the markets nuke? Curious to know, leave me a comment.
