Bull & bear - Put on the crash helmet to be safe

Over the years, I have learnt to keep my mouth shut. My market sense is at best 50/50. So with some luck, we are looking at the Front Cover effect at this point in time i.e. do the opposite of the headline of this update.

Here it goes:

The world is very much a different place than years past. Feels like it is on the cusp of some big changes.

There are two forces at work - oil price + rising rates. Both factors will dampen animal spirit.

Looking from afar, it is remarkable that USA and Iran are choosing to drag it out. I don't think the conflict will end any time soon (but then you never know) because Trump doesn't want to look weak and Iran is ruled by the fanatics.

Meanwhile, inflation is coming back. Think govt deficits, higher oil price, higher wages, supply chain disruptions.... Central Banks in the world are under pressure to raise rates.

And then we have AI. The theme that has dominated investors' interest in recent years. AI has also been driving growth in USA, Taiwan, Korea etc etc..... BUT recently, doubts are starting to surface if the AI cycle is sustainable (some CoreWeave bonds are trading at 15%, negative FCF at Meta etc etc). The latest earning season in USA is volatile to put it mildly. Plenty of stocks got chopped down 10-30% post results (when the results weren’t that bad at all).

Putting these forces together, my take is the environment is "risk off".

Don’t think sentiment will shift anytime soon. So time to hunker down and put on a crash helmet. See Pic. Google Gemini's handiwork. So on balance, think AI is real but indigestion is inevitable.

>>>>>>>>>>>> 

Now a report card….. Many stocks I like and own have come off a fair bit…..

My dilemma is many of these stocks have been smoked and they are hardly “hot stocks”.

So what to do ? Market does what the market does…. What matters in the long run is if the company can achieve its vision/goal ? When I work through many of these stocks, my view is they will be worth far more in time….

In the meantime, these are the “gates” I would be watching for. As long as each co can pass its “gate(s)”, I will hold on.

1.      Harrow => Quell data on Iheezo (Q4 26) + New drug application for Melt (early 2027).

2.      Bitdeer => BTC price + construction deadline for Tydal (Q4/Q1 27) + can it raise financing to fund its AI initiatives.

3.      Uniqure => Will FDA accept its BLA application (Nov 26) + progress of competing oral drugs (will only be available in another 3 years or so) + data on its epilepsy program.

4.      Chinese stocks => Sentiment is almost extreme + fund flow is even more negative (e.g. govt cracking down on back taxes on the rich folks) => I am inclined to hold through the storm.

5.      Aguia => Progress on its “appeal” in next few weeks (expected in mid Nov) + loan agreement.

6.      West Wits => Comfortable it can increase production + watch gold price as signal to add if it really dips.

7.      Brazil => Amazing how bad sentiment has been post election. Inter and XP gave up all the gains after the first round result, plus some. Probably fair to factor in recession next year.  I am inclined to hang on and see how it unfolds as valuation of both stocks are cheap + stone cold sentiment.