I had a chat with cycle theorist and chart technician Neppolian of Jade Capital after last week fall in markets
Summary
I look forward to a lost decade in terms of returns. The next cycle top in year 2026 is expected to yield a meager new high of 5% above the year 2019-20 highs.
The next 10 years is likely to be pronounced with wild gyrations with little net returns unless you are a long-short fund and successful in catching the gyrations on both sides or a long only fund which tactically go overweight and underweight on CASH at both end of gyrations.
The world markets will pay the price for aggressively bringing in future returns forward acutely in this present cycle from 2009 to 2019.
The best decadal play, in my mind is Long China-Short US. Second option is Long China & Gold and short a region of your choice.
when I asked the reason for China’s outperformance vs the world?
Yup…as my sense is pandemics happen at a place at the very fag end of a long bear cycle…..and the pandemic acts as an antidote for the prevailing bear cycle ending and the birth of a new bull. Fundamentally this could be because of the growth coming back due to a large economic stimulus in the country of origin or the epicenter of the pandemic…..in this case China. So China should be right now offering the best decadal investment opportunities.