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SVTPerformance's Chain of Restaurants
Road Side Pub
SVTP stock pick thread.
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<blockquote data-quote="Weather Man" data-source="post: 16682157" data-attributes="member: 137766"><p>I never know quite what to think when I read something like this. These are supposedly smart guys, yet they are almost completely back to cash??????</p><p></p><p><a href="https://seekingalpha.com/news/3754191-stocks-could-suffer-brutal-decline-as-inflation-threat-looms-palm-valley-capital" target="_blank"></a></p><p><a href="https://seekingalpha.com/news/3754191-stocks-could-suffer-brutal-decline-as-inflation-threat-looms-palm-valley-capital" target="_blank">Stocks could suffer 'brutal decline' as inflation threat looms - Palm Valley Capital</a></p><p></p><p></p><ul> <li data-xf-list-type="ul">Palm Valley Capital Management argued in a letter to investors that the stock market could suffer a "brutal decline" as a result of high valuations and "shaky fundamental underpinnings."</li> <li data-xf-list-type="ul">Fund co-founders and portfolio managers Jayme Wiggins and Eric Cinnamond identified inflation as a primary risk to the stock market, as accelerating price increases could force the Federal Reserve to become more hawkish.</li> <li data-xf-list-type="ul">"We believe higher inflation is one of the primary threats to the carefree stock market, since low inflation provides the cover the Fed needs to continue suppressing interest rates," they said <a href="https://seekingalpha.com/article/4459367-palm-valley-capital-fund-q3-2021-commentary" target="_blank">in a fund letter released this month</a>.</li> <li data-xf-list-type="ul">The Palm Valley portfolio managers contended that inflation rates are actually higher than the rates included in official government data, largely because of the way rent costs are computed.</li> <li data-xf-list-type="ul">Calling the CPI rent statistics "a fantasy," Wiggins and Cinnamond pointed to stats showing a nearly 19% increase in rent costs over the past year.</li> <li data-xf-list-type="ul">"Eventually, the truth will be obvious, when the delta between the government’s inflation measurements and U.S. citizens’ real-world experience becomes too large to ignore," they predicted.</li> <li data-xf-list-type="ul"><span style="color: rgb(235, 107, 86)"><span style="font-size: 22px"><strong><strong>To counteract the threat of a sharp equity decline, Palm Valley has moved much of its portfolio into cash, which represented nearly 80% of the fund's assets by the end of the third quarter.</strong></strong></span></span></li> <li data-xf-list-type="ul">Otherwise, Palm Valley has looked to resource stocks, particularly targeting silver and gold. The fund views these as a vital hedge against inflation.</li> <li data-xf-list-type="ul">"We view gold and silver as votes against the longevity of the bubble. The free ride will eventually end, and the shock to financial assets could be severe," Wiggins and Cinnamond said.</li> <li data-xf-list-type="ul">"With this Fed at the helm, if we took a five-year nap and could only own precious metals or the U.S. stock market at current prices, the choice would be easy," they added.</li> <li data-xf-list-type="ul">For another bearish look at the stock market, see <a href="https://seekingalpha.com/news/3753289-stagflation-not-properly-priced-into-financial-markets-crescat-capital-gold-silver-inflation-china" target="_blank">why Crescat Capital believes that investors have not properly priced stagflation risks</a>.</li> </ul></blockquote><p></p>
[QUOTE="Weather Man, post: 16682157, member: 137766"] I never know quite what to think when I read something like this. These are supposedly smart guys, yet they are almost completely back to cash?????? [URL='https://seekingalpha.com/news/3754191-stocks-could-suffer-brutal-decline-as-inflation-threat-looms-palm-valley-capital'] Stocks could suffer 'brutal decline' as inflation threat looms - Palm Valley Capital[/URL] [LIST] [*]Palm Valley Capital Management argued in a letter to investors that the stock market could suffer a "brutal decline" as a result of high valuations and "shaky fundamental underpinnings." [*]Fund co-founders and portfolio managers Jayme Wiggins and Eric Cinnamond identified inflation as a primary risk to the stock market, as accelerating price increases could force the Federal Reserve to become more hawkish. [*]"We believe higher inflation is one of the primary threats to the carefree stock market, since low inflation provides the cover the Fed needs to continue suppressing interest rates," they said [URL='https://seekingalpha.com/article/4459367-palm-valley-capital-fund-q3-2021-commentary']in a fund letter released this month[/URL]. [*]The Palm Valley portfolio managers contended that inflation rates are actually higher than the rates included in official government data, largely because of the way rent costs are computed. [*]Calling the CPI rent statistics "a fantasy," Wiggins and Cinnamond pointed to stats showing a nearly 19% increase in rent costs over the past year. [*]"Eventually, the truth will be obvious, when the delta between the government’s inflation measurements and U.S. citizens’ real-world experience becomes too large to ignore," they predicted. [*][COLOR=rgb(235, 107, 86)][SIZE=6][B][B]To counteract the threat of a sharp equity decline, Palm Valley has moved much of its portfolio into cash, which represented nearly 80% of the fund's assets by the end of the third quarter.[/B][/B][/SIZE][/COLOR] [*]Otherwise, Palm Valley has looked to resource stocks, particularly targeting silver and gold. The fund views these as a vital hedge against inflation. [*]"We view gold and silver as votes against the longevity of the bubble. The free ride will eventually end, and the shock to financial assets could be severe," Wiggins and Cinnamond said. [*]"With this Fed at the helm, if we took a five-year nap and could only own precious metals or the U.S. stock market at current prices, the choice would be easy," they added. [*]For another bearish look at the stock market, see [URL='https://seekingalpha.com/news/3753289-stagflation-not-properly-priced-into-financial-markets-crescat-capital-gold-silver-inflation-china']why Crescat Capital believes that investors have not properly priced stagflation risks[/URL]. [/LIST] [/QUOTE]
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