1st July 2024

Weekly Index Movement

Aussie All Ords-0.3%

Before we start today I wanted to talk about how worrying the US presidential debate was last week. The two guys fighting it out to be the Leader of the Free World argued over who is better at golf.

We are all in a lot of trouble if this is how we pick the next US president.

The outcome of the debate clearly showed Biden is not capable of running. It will be interesting to see if he drops out or stays. But if he stays, Trump will win easily, and that might lead to inflation.

But we don’t know yet so there is no point trying to make decisions around what stocks will gain or lose. There is plenty more to come for us to form more solid opinions on.

Having an inflation hedge in your account is always a good thing. Ask the RBA about that as they will be worried about the Australian CPI announced last week.

After falling from over 5% to 3.4% in December 2023, monthly inflation has been creeping higher again. It went to +3.5%, then +3.6% and now +4.0%.

Is it enough to worry the RBA into another rate hike?

I don’t think so, but you can forget about any decreases in interest rates this year. Probably next year too.

On this same topic, we have some other worrying signs

Remember back during the Pandemic when we were told that inflation was high because of “Supply Chain Problems”

Well look what is happening to those very same container prices in the Supply-Chain

This is starting to cause me some concerns. Not for my portfolio, I’m happy this is happening for that, but I am becoming more concerned we will see more interest rate rises in Australia.

Why am I happy to see higher inflation?

Because it will benefit the inflation hedge holdings I have such as Coal and Oil

And as it turns out, Copper too.

A great copper stock is FCX – Freeport McMoRan. Or in Australia Sandfire Resources – SFR

Everyone should have some part of their portfolio exposed to Coal/Oil/Copper

Another idea for Copper is the ETF – COPX – Global Copper Miners.

While we are on this topic, take a look at Coal consumption

It’s easy to live in the West and think we are getting rid of coal so why would you own a coal mining company? But as you can see. What we do makes little difference compared to what Asia is doing.

Coal is not going away so owning Coal miners makes a lot of sense. I like New Hope Coal (NHC) and YanCoal (YAL) – both trade in Australia.

I’ve been thinking about these Climate Change Goals and Net Zero by 2050. It just won’t happen because even if we cut off all dirty power today, Asia is just going to more than replace us. So rather than waste money on building renewables, we should be planning for a future of rising global temperatures and what that means.

Another interesting side effect of AI is energy demand to run the data warehouses. This is supposedly quite high and needs consistent stable power. Renewables can’t guarantee that so it’s back to the old dirty reliable in order to run all these new AI models.

Exciting ETFs

I came across some ETFs this week that I didn’t know existed

Ever seen MAG7?

This is five times leverage the basket of the magnificent seven stocks.

Five times leverage the highest flyers? I feel irresponsible even telling you it exists. Leverage of this nature will only end badly.

But there are others that you might be more interested in.

Leveraged Single Stock ETFs supercharge the companies they follow. As a short-term trading instrument that could be interesting.

NVDL is two times leverage on Nvidia stock. Two-times isn’t so bad and might appeal to the fanboys out there.

Or, if you think NVidia is overdone, how about NVD – two times Short NVidia.

You can do the same thing with Tesla. I know there must be Tesla fans reading who really don’t like me supporting Coal companies. So here’s one for you

TLST – 2 times Bull Tesla.

But I’d prefer to buy TLSZ – 2 times short Tesla.

I even found NVDY which is a covered call strategy on Nvidia

ETF providers are rolling out ETFs on names popular with retail clients……you know what that means. We might not be too far off a top in these names.


Stock values can go down as well as up. It is possible to lose 100% of your investment in a stock. Any advice given by Capital 19 is general advice only and does not take your personal circumstances into account and might not be suitable for you.