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The Beginning of the End for Brokers? One of the last major avenues to fully digitize, residential real estate will come under pressure as technology forces margins lower like it does in most industries. Opendoor, which went public in a SPAC recently (see IPOB/NYSE), promises to eat into broker commissions. Just like online trading platforms, e-commerce and restaurant deliveries, residential real estate will see much lower margins as brokers are forced to cut commissions. In the United States, residential property is a $1.6 trillion industry with billions levied on sales. That game is going to end as Opendoor floods the industry with much lower fees and in some cases, makes brokers redundant. If anyone knows a publicly-traded residential real estate company, please let me know. I'd love to short it.

Target Travel-Leisure Companies Ahead of Vaccine The travel sector has been decimated since Covid-19 struck the global economy in March. Hotels, casinos, airlines, cruise lines etc have been hammered, down 50% or more. Though travel-related stocks have recovered somewhat this summer, they remain 30% to 60% off their pre-Covid-19 highs. Airlines have been especially hard hit. I think a discerning investor should look at building his/her leisure portfolio this fall ahead of a v...accine announcement. In Europe, look at Ryannair plc (London-RYA) and Wizz Air (London-WIZZ). Budget airlines will prosper as we come out of Covid-19, unlike high-cost carriers. Also, British Airways' pulling out of Gatwick airport leaves Wizz Air primed to buy its valued slots. Ryannair and Easyjet, too. In the casino and hotel space, MGM Resorts (NYSE-MGM) is the largest operator in Las Vegas and aggressively building its gambling empire online. IAC's Barry Diller took a 12% stake in MGM this summer and that's smart money. He's betting on online gambling gaining momentum in the United States. Finally, look at Spain's Melia Hotels (Madrid-MEL), down over 60% since March. Melia Sol is the largest hotel group in Spain -- the world's #2 tourist destination. When travel returns, Melia will recover quickly as tourism revives. Once we get a viable vaccine, the pent-up demand for travel will result in a mini-boom. Target your purchases now.

Fed will Get Higher Inflation in 2021-2022 Be careful what you wish for. That's the warning shot fired at FOMC Chairman, Jerome Powell, after abandoning his 2% inflation target last week. That target was useless anyway. The Fed, ECB and the Bank of Japan, among other central banks, are desperately trying to grow inflation. I mean really desperate. With global debt levels skyrocketing since March and April after implementing emergency Covid-19 spending measures, inflation wou...ld help to reduce the stock of outstanding debt. Nobody needs a lesson on how that works; just ask Argentina (3 defaults since 2001), and a host of other emerging market countries who made defaults look like a de facto sport in the 1980s. Major economies also had to restructure debt, including the UK in the mid-70s, Germany under Weimar in the 1920s. I think governments really want inflation, and soon. The alternative, or the destruction of credit (aka deflation), is far worse. Remember, we're in a soft economic depression since March only because of extraordinary central bank and government fiscal actions. The asset bubbles in bonds, stocks and real estate will come home to roost, if inflation finally comes around. Asset bubbles can permeate provided rates remain ultra-low. Everyone at this point thinks rates will never rise again. Really?

Short Interest Hits 15-Year Low as Bearish Bets almost Disappear Bets against the S&P 500 Index hit a 15-year low last week as more bears throw in the towel and boost year-end forecasts. The American broader market has surged almost 53% since bottoming on March 23 after massive Federal Reserve and government stimulus was passed to battle Covid-19. Despite the incredible rally in equities, the real economy is still out more than 10 million jobs and more companies are closing e...very day, especially smaller firms. The disconnect between the markets and the real economy remains a threat to stocks, if the economy doesn't rebound in a meaningful manner -- and soon. The five largest U.S. companies (all tech stocks) now command a combined market value that's twice the size of the German economy. I'd say that's ridiculous. Meanwhile, the cost of portfolio protection is just plain cheap. Investors have subscribed to the view -- now consensus -- that central banks and government won't let stocks collapse again. This moral hazard is the wrong way to invest as more stock and credit markets become distorted because of government monetary manipulation. I suppose this will all end badly one day. But until that day, and ahead of U.S. elections on NOV 3, enjoy the party. Nothing lasts forever.

Diller's Wager on MGM Resorts is a Good Bet as Online Gambling Booms Barry Diller, Chairman of IAC/InterActiveCorp. (NASDAQ-IAC), last week placed a $1 billion bet to build a 12% stake in casino operator, MGM Resorts (NYSE-MGM). According to Diller, 'We believe MGM presented a once in lifetime opportunity for IAC to own a meaningful piece of a pre-eminent brand in a large category with great potential to move online.' MGM's online gambling business is currently too small to e...ven have a meaningful discussion; but MGM Resorts has been building bridges to grow its online gambling operation with UK sports-betting company GVC Holdings PLC (London-GVC). The joint venture, GetMGM, operates an app in five states. According to The Wall Street Journal, by the end of 2022, 34 states will have some form of legalized sports betting, providing access to 57% of the American population. MGM Resorts is an excellent long-term investment at these low levels. Trend in online gambling are bullish. Stocks might endure a stiff correction over the next six weeks as we head into seasonal weakness, but I like what MGM is doing. And Diller knows his market. MGM trades 39% off its 52-week high and sells at 5.5x trailing earnings. I'd start buying now and add to my position on weakness.

GET BEHIND EU GREEN DEAL AND INFRASTRUCTURE BOOM The market awarded the EUR a major boost in July following the passage of an $2.1 trillion spending package. Under the deal, the 27 member EU nations will jointly raise hundreds of billions of EUR through the sale of common bonds for the first time and disburse grants and loans to the hardest hit countries in the euro-zone. The agreement on the EU recovery fund is an important step toward the goal of a unified banking and fisc...al system in Europe and should boost investor confidence. According to Goldman Sachs, the EU Green Deal is the largest economic stimulus Europe has seen since the Marshall Plan. It aims to achieve net zero carbon emissions by 2050 and a 50% to 55% cut in emissions by 2030 compared with 1990 levels. The investment bank reckons the plan will conservatively cost about $7.9 trillion and will provide a short-term boost to GDP and employment thanks to a major investment wave in power infrastructure, buildings renovation, automotive and industrials. Selecting individual stocks that might win government contracts or record a jump in earnings is too complex, and time consuming; a much safer option lies in a diversified infrastructure portfolio concentrated across European companies that will benefit from the EU Green Deal. A better way is to buy a large portfolio of these companies and have a professional manage it for you a mutual fund manager thats outpaced the benchmark over the past ten years. Yes, you heard right: a mutual fund that has beaten the benchmark! We've started making our investments earlier this month. Get on board!

Central Banks Commit $17 Trillion to Fight Covid and More to Come No wonder gold and silver prices are surging. In late June, JP Morgan Asset Management reported that the Federal Reserve and other central banks have already minted $17 trillion to fight the pandemic easily overtaking the scale of all measures throughout the financial crisis in 2008-2009. Printing presses are running hot. A significant chunk of that combined $17 trillion has been directed to bond markets, inc...luding junk bond ETFs in the U.S. and several of the largest investment-grade bond ETFs managed by Blackrock iShares, State Streets SPDRs and Vanguard. Some investors have started declaring that central banks have in effect nationalized the bond market with wholesale purchases designed to provide a backstop to falling assets and liquidity. You can't help but think how this won't end badly. Just unsound economics.

Puts/Calls Ratio Screaming Correction as Tech Mania Runs Wild After a near 45% surge off the March 23 lows, markets have grown incredibly complacent believing the Fed won't let stocks decline again. That's a big mistake. Yes, the correlation between the Federal Reserve's balance-sheet and the S&P 500 Index is over 80% since 2009 amid QE and widespread asset purchases; this implies investors should embrace risk assets because the Fed's got your back. But morale hazard only goe...s so far. I wouldn't bet my career on the Fed. Consider the exuberance underway in tech stocks and the flood of money pouring in from day traders and Robinhood accounts. Also, consider the fact that the Fed's balance sheet has shrunk since July. Finally, the puts/calls ratio trades at its third lowest level of the year and suggests a sell-off is imminent. If you have a portfolio consisting of 50% or more in stocks, buy some portfolio protection now. It's become much cheaper. Look at VXX or the iPath Series B S&P 500 VIX Short Term Futures ETN. August and especially September are the markets' worst months of the year.

Spanish hotels are suffering as Covid-19 severely damages tourism. The world's #1 tourist destination, Spain attracts millions of visitors every year. Madrid, Barcelona, Marbella, Las Palmas and Ibiza are huge tourist draws, mostly from UK, elsewhere in Europe and around the world. As investors continue to lunge after riches in the red-hot tech sector, maybe we should be looking ahead to a post-Covid 19 world in 2021 or 2022 and hunt for distressed assets with big profit po...tential. Specifically, I'm talking about Spanish hotels. They've been decimated since March as occupancy rates plunge, trips are cancelled and the government fights one of Europe's largest outbreaks of the virus. After a brief recovery this month, hotels are threatened again by a new surge in Catalonia; the UK mandated a 14-day quarantine for returning Brits, adding another blow to Spanish hotels. Trading 60% below its 52-week high, Melia Hotels International (Madrid-MEL) is one of Spain's largest hotel groups with properties worldwide. The stock continues to get crushed as cancellation rates rise again and occupancy rates dive. But here is a dirt cheap stock at just 7x trailing earnings and a 37% discount to book value. When Covid finally ends -- and it will -- investors stand to make two or three times their money on Melia as travelers return en masse. Looking ahead in 2021, Spanish tourism is the equivalent of a cheap option at this low price. Put Melia on your radar now.

You must own gold -- but don't buy it now. The Gold Rush has begun and silver isn't far behind. If you haven't already purchased gold and silver, don't buy them today. Both precious metals are now in a major bull market rally with gold breaking $2,000 an ounce and hitting an all-time high. Silver trades at a six year high. But judging by the rapid ETF inflows (second highest ever), exuberant investor sentiment and the dollar's recent sharp decline, I'd wait for better and saf...er entry point. Our managed account hold about 14% in gold (7.5%), silver (3%)) and shares of Newmont Mining (3.5%). To be sure, it's been a superb month for the precious metals. I consider two secular forces responsible for this massive outbreak and investors need to realize they're both deeply entrenched and real: the first is the ongoing plunge in global real interest rates, which makes owning gold more affordable because half of all government bonds trade alongside a negative rate, meaning you must pay the government to own a bond. Most bonds are flagrantly overvalued. The second force lies in the astronomical value of accumulated government, corporate and personal debt over the past 12 years and especially, since the advent of Covid-19. Debt levels already surpass GDP output in many OECD countries. There's a real bond bubble clearly in the making and debt servicing costs are set to explode one day, unless governments invite inflation and turn to debt restructuring and currency devaluation. I think the big move underway in gold, and now silver, are clear warning signals for the global economy. There's real trouble brewing. Use any intermittent weakness to buy gold and silver. But wait for a consolidation first.

Is Tesla worth more than GM, Ford and Fiat-Chrysler combined? At $295 billion, Tesla's market-cap is now almost worth the same as America's biggest bank, JP Morgan Chase at $305 billion. Is there something wrong with this picture? Wall Street, individual investors and day traders have driven Tesla's stock to the Moon this year even though the company struggles to produce more cars and doesn't have big margins. I owned the sock for a client last year and doubled his money in ...six months...sold at $430! Way too early... I'd say Tesla is not only spectacularly overvalued but one of the greatest short candidates since the internet mania in 1999. A speculator buying long dated Tesla put options today will eventually make a killing when the stock price tanks. Do you really think great companies like Daimler and BMW won't eventually make a comparably great car to rival Tesla? It's only a matter of time.

Though this is probably censored copy surely promulgated by the Chinese Communist Party, there is a hint of truth in the assertion that Trump and the military might not see eye to eye. That's especially the case with China where the U.S. should be containing Beijing. China has been unusually aggressive since Trump's election. It's the same with Russia, Turkey and Iran. Though giving mixed signals to Allies since becoming President, Trump has not executed a military intervent...ion since 2017. The U.S. needs its Allies and they should share in the cost to police the world, protect free markets and engage China more aggressively. The way this President is headed, China will continue to walk over the U.S. and her Allies, expand more aggressively and assert policies that are not consistent with human rights and free trade. I favor a containment policy on China and the U.S. and her Allies can effectively accomplish this. China is not a democracy; it seems impossible that over time, a highly rich and successful economy can co-exist with the suppression of rights and freedom. Long-term, China will face a clash. See more

In June, the UK the worlds sixth-largest economy reported output in April was down 20% from March and 25% from a year earlier. Scaled globally, that would be equivalent to a 1.4 trillion loss in output during those 30 days or roughly the annual output of Indonesia, a country of 270 million people. The UKs Office for National Statistics estimated in mid-June that the April lock-down cost the economy 30 billion in lost output and took output back to where it was in 2002. Eighteen years of GDP growth was wiped out in a single month.

Nice to see our Precious Metals & Mining managed accounts up 34% this year and up 105% since 2017. Gold now in a bull market driven by record government and corporate debt issuance, record central bank asset purchases and the biggest fiscal expansion since the 1930s for major governments. Deficits growing bigger by the day. Finally, upside down world with more than 40% of all government bonds trading with negative yields, making gold that much more attractive. Real rates to remain negative for quite some time.

Time to take some profits in technology. Selling some of our fintech holdings after a 100% + rally since late March. Valuations too stretched. Love the sector but not at these levels. Looking to introduce fintech exposure to Europe. See EEFT. Should recover further as Europe slowly grows again and people travel within the EU.

One of the most ridiculous murmurs Ive heard lately is how this rally is defined as a bull market because its up more than 20% from the March lows. Really? Outside of the FAANG group of mega tech stocks, it doesnt look like a bull market to me: From their pre-Covid peak, consumer finance stocks -37%; aerospace/defense -35%; advertising -34%; autos -31%; Office REITs -30%; apparel retailing -26%; insurance companies -25%; industrial conglomerates -23%; HR and employment services -20%; restaurant stocks -15%; asset managers -15%; homebuilders -14%; electrical equipment -13%; machinery -11%; railroads -11%. This doesnt look like a bull market by any measure.

U.S. stocks up more than 40% off March 23 lows but ten-year Treasury bond yields have risen just 16 basis off the 0.54% low to 0.70% today. That's not a convincing rally when stocks are soaring and bond yields are barely rising. It's not all due to Fed buying, either. Bonds are always the smarter money.

Markets way ahead of reality. June jobs report is backward looking. Wait until markets react to rising closures across USA, surging Covid cases and more job losses. This won't be a fun summer for investors. The Fed can do a lot but it can't control a pandemic.

Internet the Enabler At the bullish side of the argument, many pundits believe May marked the end of the shortest but deepest recession in a century. One indicator is the stark divergence between segments of the market. Thus far, big economic shutdowns have rewarded technology, ecommerce, healthcare and the gold-mining sectors. The laggards include energy, banks, retailers, transports, industrials and REITs until ten days ago when the latter began to outperform the former f...ollowing a surprisingly strong May jobs report. The market has started to discount a recovery and consistent with this scenario is the big increase in bond yields. Treasury prices have been correcting sharply since late May. The markets biggest dogs until recently like airlines, cruise lines and hotels have all posted 50% + gains since mid-May. The disrupters now are ecommerce, cloud services, digital pay groups and video streaming (movies, interactive entertainment etc.). My portfolio has gradually started to accumulate these companies on any intermittent weakness because I dont see a great economic boom ahead with interest rates at zero, sovereign and corporate leverage at all-time highs, rising trade tensions between China and the United States, and a pandemic that will probably change our behavior over the near-to-intermediate term. Basically, if you dont have a strong internet platform or presence in your business, youre done. Investors should not underestimate that the way to achieve their financial goals might be markedly different now as the disrupters take an even larger share of the pie from those disrupted. Im waiting for a correction in the names Im following or own before making fresh recommendations. Technology stocks are heavily overbought.

ENR has completed its 2020 ADV filing, including Part 3, Form CRS. This document is an abbreviated summary of ENRs relationship with clients. Please download the documents here: http://enrassetmanagement.com/enr-brochure/ .

Dont Bet on Repeat of 2009-2019 Central Bank Outcome of Soaring Assets and Low Inflation No two economic outcomes are ever the same. Following the near collapse of the banking system in the fall of 2008 following the demise of Lehman Brothers, the subsequent combined unorthodox monetary stimulus and asset purchases (dubbed quantitative easing) by central banks eventually halted the destruction of credit and deflation that almost ruined the world economy. Many shrewd inve...Continue reading

The Last Decade Belonged to Indexing. The Next Ten Years will Belong to Hard Assets, Foreign Stocks and Shorting Ken Fisher of Fisher Investments, regularly touts how much he hates annuities in his TV ads, mostly on CNBC. "I'd rather die than sell you an annuity. I'll never sell annuities." That message worked because it was so compelling. Whether you agree or not isn't the point: the point is the message sticks. By the same token, I'll never buy an S&P 500 Index ETF (SPX). T...he massive, unprecedented accumulation of ETF assets since 2010 has been absolutely mind-boggling. Many more ETFs now trade on the NYSE than stocks. We all know indexing beats active. But the future returns of the SPX will be downright awful as we continue to borrow from the future vis-a-vis unrelenting Federal Reserve asset purchases fueling asset bubbles, and the lowest rates in a generation. Just what makes the SPX such a great index compared to other markets since 2009? I'd argue a proactive Fed on steroids, huge stock buybacks, a boom in tech stocks and the plunge in interest rates and inflation. The next decade should support distressed inflation-hedges like commodities, gold and silver, cheap foreign stocks and alternative investments outside the confines of stocks. Inflation should finally begin to accelerate as central banks defeat deflation and grow their balance sheets to new records. For stocks, stick to large-cap high quality global brands with pricing flexibility and large balance sheets. Low debt is important today when selecting companies. A slow growth or stagflationary economy will support real assets like gold, stocks with pricing power and international assets priced outside of the US dollar. The boom is over. Stagflation is coming. Use this historic moment in market history to asset allocate for a more challenging environment. The Fed can extend cycles but it can't circumvent pandemics, unemployment and consumer spending. Asset allocate now.

Gold prices follow U.S. budget deficits. With the Fed printing into oblivion in the trillions and fiscal deficits heading through the roof, it's time to own some gold. U.S. national debt heading to exceed all-time high in WW II. Hedge yourselves against paper money.

See how one KnightsbridgeFX.com customer saved $150 on exchanging $6,000 US dollars compared to their bank. That's about 2.5% in savings!

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