I think I have been pretty clear in how unclear my writing has been lately about the markets and investing…I am confused.
My day job and passion and career is seed investing. I am not so confused about seed investing these days…prices seem VERY high. I have been mostly sitting on my hands and talking it through with my partners and LP’s and founders and other seed managers.
When I started seed investing in 1999 and more aggressively in 2006, everything just made sense to me. Prices seemed insanely cheap/fair and I felt I had an edge because of what I saw in the public markets.
Today, everyone is a seed investor and it seems like all the new seed investors know nothing about the public markets. That ‘edge’ I thought I had has either disappeared, on hiatus, or still an edge which will reward me for sitting on my hands.
As for the public markets…I am absolutely confused. I am lucky because I do not need the public markets to help me make a ‘number’ for retirement. I can just be out of them when I am confused.
I have shared here over the years that a high exposure for me to equities is 80 percent and low is 30-40 percent. I am in the middle right now with no conviction either way.
I have no interest in energy or commodities or mining …I like growth or cash to go along with my real estate and seed investing.
My gut says the markets will head much lower and catch up with growth stocks, but I am not a gut investor or trader with public stocks.
Today what I see is the following:
$VIX trending higher and back over 30
Magazine covers piling onto the rising rate forever narrative and while I have not checked, likely inflation covers galore in print:
High Yield Junk Bonds in a freefall and overall long term bear market:
Last year all the talk was about going to Mars, this year the markets are focused on digging for Mars – metals and mining stocks and coal stocks are hot:
The 60/40 portfolio is off to it’s worse start in 25 years:
But, the markets are doing a pretty good job of dealing with the messes for now:
In March 2020 it was scary but more obvious to me that buying broken growth stocks was the thing to do. I started the podcast ‘Panic With Friends’ and I did.
In February 2022 I don’t have much conviction in doing the same.
The only conviction I have at the moment about public markets is that nothing would surprise me here.