LSMIF Weekly Newsletter: Scottish Mortgage, University Application Rates, Wetherspoons, Inflation (Again) and Rate Rises, A Trifecta of Technical Analysis!

Hello All,

This is the seventh issue of the LSMIF newsletter. Please share with your friends and family and message in the Discord to participate and share a story!

Current News and Affairs:

L&G chief says Uk levelling up policy is “failing” – Sir Nigel Wilson is pushing for policy change to encourage investment outside the capital; he notes we aren’t building enough affordable housing, social housing or build-to-rent housing. He states old assets will decrease value and sees modern investment and properties to be more relevant.

First Citizens to buy failed Silicon Valley Bank: Family-owned company’s acquisition of tech-focused lender’s deposits and loans follows sale of collapsed Signature Bank

Hedge funds scale back bets against Scottish Mortgage – Investors close short positions in expectation that share price may be nearing bottom!!! This is massive news for the fund, we have the opportunity to reduce our average PPS massively catching the bottom and riding the wave of nearly +50% back up to levels seen at the time of original purchasing! Watch this space closely.

Money Market funds swell by more than $286bn as investors pull deposits from banks: Goldman Sachs, JPMorgan Chase and Fidelity benefit from big inflows and turmoil in financial sector

UK higher education applicants to rise to 1mn a year by 2030, warns UCAS – University application service calls for targeted effort to increase places for students – This is quite funny as it just shows how much university is actually a business and we are just consumers. To benefit off this, investing in housing companies that work closely in student-housing or have large projects planned in regions of high university applicants would be a wise decision.

Wetherspoons hit by ‘ferocious’ inflation – UK pub chain ekes out small profit but sales still lag pre-pandemic level. The irony in this is I’m sat in spoons as I’m writing this and now I’m exploring the options to short sell JD Wetherspoons PLC.

February inflation surpass seals BoE rate rise: Interest rate rises went up by 0.25% to a total of 4.25% and with inflation still >10%, I still think we have one or two more rises on the way. Although, inflation should cool more rapidly before summer

Fed officials double down on rate rise decision citing high inflation – Like the UK, the Fed pressed ahead with a .25% rate rise up to 5% even amid the financial sector wobble. What is worrying to me is in most countries we are at rates that are equal to or higher than 2008, banks are taking hits and they are still raising rates because they’ve been printing money like mad men. More money is being printed soon in the US so inflation will run away. The US dollar is overvalued. I stand by this. >80% of all US dollars in existence have been printed in the last 3-4 years. Yikes.

Fund News:

SouthEastern Hedge Fund Placing: Our team didn’t place in the finalists in the competition but everyone did amazingly well and the fund is proud of everyone involved.
Investment Committee: We have our Investment Committee coming up so keep your eyes peeled on Discord for this.
Purchasing: Starting to draw up and decide upon our strategy with relevant investment sizes and entries.

Commentaries:

Gold:

(LAST 3 MONTHS) (1) I have been day trading gold quite a lot recently. I expect it to drop slightly from current levels before a marked increase up to highest regions marked by (2). Confirmation (3+4) shows that we can expect gold to rise from now so I will probably enter a large long position. (4) I’m expecting a slight drawdown before a large turn in positive momentum (+5% or more).

(LAST YEAR) (1) I just want to highlight on the yearly, the very likely movement for Gold. A drawdown then a big move up early summertime. (2+3) Confirm this drawdown.

US Dollar:

(LAST 3 MONTHS)(1) The dollar is in a prolonged downwards movement with the bottom marked by the orange zone and shown in the -1.23% expected drop. (2+3) Suggests the downwards momentum has begun and will continue to drop further.

(LAST YEAR)(1) To me, I’m seeing drawdown before some upside but I may be wrong in thinking it’ll be sizeable. It seems more likely it’ll look like a dead cat bounce. Where it bounces up a bit then crashes back down where I see the dollar likely moving. (2+3) Sorta confirms this.

Bitcoin:

(LAST 3 MONTHS) (1) I expect an -11% or more drawdown for Bitcoin. Binance is being sued and I’ve read the court charge papers and it does seem quite bad. I’m expecting a retest of regions with more support. I will be entering a large short position. (2+3) These just confirm the downwards momentum and scale of the -10%. I do see some upside in the form of a relief rally before more of a drawdown that I’m expecting.

(LAST YEAR) (1). Just want to highlight the path that is most likely for Bitcoin IMO with (2) showing a pretty bad case but ultimately, very real, possibility. (3) Just confirms we’ve had our local top and will retest a new bottom. (4+5) Now these are just scary. This is showing that we are due some heavy downturn so my short positions are about to get a lot larger. However, I do so a short term relief rally upwards before this substantial drop.

As always, thank you for your participation and attention.

Many Thanks,

Aymen Retibi

Chief Investment Officer

LSMIF Management