Patience Before the Panic
We continue to recommend the absolute safest investment portfolio. Lots of ultra-short government bills, lots of physical precious metal, and some energy stocks to hedge against currency debasement.
Chiswick, West London
Wednesday, May 13
By Tom Dyson, Investment Director
At the Berkshire Hathaway annual meeting this month, Buffett said that, of the 60 years he’s been in business, only five of them have been really juicy years for buying stocks.
Another time, he said that waiting for a market panic is like a mortician waiting for a flu epidemic, which would not be a good investing technique.
Yeah, well…
Decades of flawed economics, flawed finance and flawed policy-making have inflated a gigantic bubble in leverage and speculation. They’ve created a monster… and one aspect of this monster is that market crashes come around more frequently than they used to…and each one is more powerful – and potentially destructive – than the last, requiring ever-bigger interventions from the Feds.
Furthermore, conditions today — the valuations, the concentration, the stocks-never-go-down sentiment — would seem to be perfect for a crash…or at least the perfect starting point for a bear market.
Of course, I’m not predicting a market crash. But we CAN make sure you don’t take a “Big Loss” should a crash happen.
We continue to recommend the absolute safest investment portfolio you can muster. Lots of ultra-short government bills, lots of physical precious metal, and some energy stocks to hedge against currency depreciation.
And then…patience to wait for the next panic, crisis or recession, which will surely come along sooner or later.
Greetings from Chiswick…
Dan Denning sent me the chart below of the 30-year bond yield today. It’s on the verge of making new 19-year highs above 5.11%.
Recall our traders’ saying that there’s no such thing as a triple top. If a price bumps into resistance three times, then it’s clearly telling you which way it wants to go. In my experience, a breakout almost always happens after the third attempt to break through resistance.
We saw this a few years ago with the gold price as it tried to break through resistance at $2,000 an ounce, first in 2020, then again in 2022 and finally in 2024, when the gold price took off and never looked back. It’s now at $4,700.
The 30-year yield first broke 5% in 2023. Then again in 2025. And now it has just broken 5% for the third time. (The 30-year bond yields 5.05% at tonight’s close.) Let’s watch.
If the triple-top rule works, the long bond yield is about to head much higher. The Fed can try (and even succeed) in controlling the short end of the curve. But the long end is a different animal. The market sets that yield. And the bond vigilantes are about to ride again.
QUESTION: We’re just beginning our journey of self-managed investing after getting rid of our financial advisor. If you were going to construct a portfolio from scratch today, would you allocate the funds according to the Maximum Safety Mode portfolio or would you ‘tweak’ it based on where things currently stand? (i.e. gold at $4700, oil at $102 etc.). We recognize that you cannot provide investment advice but would appreciate your insights as we commence this journey!
