OTW #35: 9 charts before you invest; BRICS building; Falling oil supply; 0DTE hits Europe
Important financial stories to check out over the weekend
Hi Antagonist subscribers,
It’s time for another issue of Over the Weekend.
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1. Nine charts to guide your investing.
Fiona Smith shared 9 chart types that can help inform your investing. She also breaks them down in plain English.
Antagonist’s take
Unfortunately, there’s no single chart or indicator that will tell you everything you need to know before you invest. Instead, you have to rely on a combination of data to guide your decisions.
Smith’s charts are a great example of how to do this as they encapsulate various perspectives of the financial system.
I found these 2 particularly insightful:
Global currencies and equity markets—demonstrates the significant influence that currencies can have on overall index returns.
Correlation and volatility—Correlation is the degree to which 2 assets or investments move in relation to each other over time. Volatility is the measure of how much the price of an asset or investment fluctuates over a given period.
A diversified portfolio will include a healthy mix of non-correlated assets. That combination protects you from financial ruin if an asset crashes.
This chart shows how different asset classes are correlated with one another and their annual volatility.
Correlation in action
I pay special attention to correlation in our Blend Portfolio. We hold a mix of asset classes that gives us the opportunity to profit while also protecting our downside risk. In fact, 2 of our top 5 performers are commodities.
Premium members just received 2 recommendations that give them an opportunity to profit, protect them from a stock market crash, and allow them to preserve their wealth.
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2. The BRICS keep building.
BRICS is an acronym representing five major emerging economies: Brazil, Russia, India, China, and South Africa. These countries collaborate on various developmental projects and have periodic summits to discuss economic, political, and cultural cooperation.
The BRICS are expanding, however, and so is their influence.
This chart effectively illustrates the recent growth of BRIC nations and the potential for future members. It underscores the increasing strength of this alliance, which represents approximately half the world’s population.
(Source: Don A. Steinbrugge, Founder and CEO at Agecroft Partners)
Antagonist’s take
Don’t overlook the influence that the BRICS have on global markets, especially when it comes to oil, minerals, and other commodities.
As I mentioned above, diversifying outside of U.S. stocks is a wise strategy. You can use ETFs to gain exposure to BRICS’ companies and/or their entire economies. We hold one of these in our Blend Portfolio.
3. More signs of falling oil supply.
The U.S. rig count during the week ending Aug. 26 declined by 10 to 632 while the number of oil rigs fell to 512 from 520. “The former is the lowest since February 2022 while the latter is the lowest since January 2022. Energy companies have now reduced the number of active oil rigs for 9 consecutive months” (Grit Capital)
(Data source: Baker Hughes)
Antagonist’s take
Rig count is a leading indicator of oil supply. I’ve discussed the oil shortage so much that I’m bordering on annoying…okay, maybe I’ve long-since crossed that line.
But the reason I write about this so much is because it will have massive implications on the global economy.
As investors, the lack of oil production also presents a tremendous opportunity. We’re already seeing this come to fruition. Our top-performing position in our Blend Portfolio is an energy company. It’s gained 3x as much as the S&P 500 since we added it!
If you haven’t read it yet, I urge you to read my free report on the energy sector. I explain why it represents incredible profit opportunities for years to come.
4. Daily options debut in Europe
0 DTE (days to expiration) options are options contracts that expire on the same day they are traded. Traders use these for very short-term strategies, capitalizing on intraday price movements without holding the position overnight.
For better or worse, 0 DTE options have become enormously popular in the U.S. Last week, Europe began offering this type of trading as well.
(Source: Ignacio Ramirez Moreno)
Antagonist’s take
I’m very interested to see if 0 DTE will catch fire in Europe as it has in the U.S. or if it’ll just be a fad.
Antagonist readers live in 30+ countries. If you’re in Europe, I’d love to hear your thoughts on this. Please comment below or reply to this email!
Last thing...
To limit the length of Over the Weekend to 5 minutes, I can only highlight a few stories.
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Thank you for reading, and have a great weekend!
Jason Milton
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