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In May 2020, Paul Tudor Jones, an investor with a long track record of success, accurately predicted our current predicament and recommended [1] the following t
by next_xibalba 5y ago
In May 2020, Paul Tudor Jones, an investor with a long track record of success, accurately predicted our current predicament and recommended [1] the following trades as good inflation hedges:
- Gold
- The Yield Curve (long US2Y, short US10Y)
- NASDAQ 100
- Bitcoin
- US cyclicals (long)/US defensive (short)
- AUDJPY
- TIPS (Treasury Inflation-Protected Securities)
- GSCI (Goldman Sachs Commodity Index)
- JPM Emerging Market Currency Index
One caveat is that some of these bets are not easily accessible to retail traders.
Another is that TIPS are disputed as a good inflation hedge. One reason for this is that they are indexed to the CPI, which, some argue, significantly understates real inflation.
With inflation already raging, the upside on these bets might not be great if placed in March 2022. Of course, if you expect high inflation to be persistent, these may still be viable.
[1] https://www.docdroid.net/H1fuimX/the-great-monetary-inflation-pdf https://www.docdroid.net/H1fuimX/the-great-monetary-inflatio...
- metabro 5y agoDoesn’t this read like “just invest in anything”? OPs q is “what” to invest in given that one can’t hold cash when inflation is rampant. I’m just continuing to buy us equities with a tilt towards the nasdaq 100. But I have no idea how that will work out in the next 10years. The other option is to just make as big downpayment as I can (200-400k) in the Bay Area but not really sold on living here long term.
- next_xibalba 5y ago> Doesn’t this read like “just invest in anything”? Not really. Even if you did everything in that list, its a tiny slice of the universe of invest-able assets. This is a quite specific, prescriptive list of things to hold as alternatives to cash in the current period of high inflation. Now, the opportunity may have been traded away in the time since this was published. Commodities, for example, have seen significant price appreciation.