By Kevin C. Smith, CFA – Crescat Capital
Valuation extremes combined with macro inflection signals provide generational opportunities to position opposite the crowd for potentially large gains. At Crescat, we live for such times. We continue to believe we are on the cusp of a rare macroeconomic shift, like in 1972 and 2000, where a monumental investment setup exists on both the long and short sides of the market.
The years mentioned above immediately preceded the onset of roaring new secular bull markets in commodities coincident with the bursting of bubbles in crowded megacap growth stocks. The analogous scenario exists today. We believe a major stock market correction and stagflationary recession is ripe to unfold and it should soon be the best multi-year stretch to own precious metals and mining stocks since the US dollar was de-pegged from gold in 1971.