Jaime Carrasco: Golden Opportunities Ahead For 2019
Jaime tends to be more contrarian than the average investor. He assumes that markets are manipulated through excess money printing and suppression of some like gold and silver. Investors would likely be less interested in markets if the price of gold were much higher. Precious metals reveal the underlying market risks and the year ahead will probably bring additional risks but also opportunities.
An inversion of the yield curve may not be required to have a recession. There exists a lot of systemic risks already, from factors like the housing markets, banks, politicians, and pension funds. There is also a risk that the Saudi’s could walk away from the petrodollar. When the world moves away from the dollar, it will affect everything.
The stock market could go up, but if the currencies are crashing at a faster rate, it means no one is making any money. Deutsche Bank is a looming test which will reveal if the banking system has corrected the problems that caused the 2008 crash.
Investors should be diversified across currencies and in metals. When currency markets re-value, a prime beneficiary will be the miners as a result of the enhanced valuation of precious metals. You want producers with excellent management, in the right geographical/political regions, with ounces in the ground, and low costs of production.
He is surprised how many investors don’t learn and are mostly ambivalent. He points out that you can’t solve a debt problem with more debt as sooner or later it catches up. He keeps hearing about liquidity problems which are the same issue we had back in 2008.
Time Stamp Reference:
1:00 – What to expect in 2019.
3:30 – Risks and opportunities.
4:00 – Why the Fed has to raise rates.
4:50 – Global systemic risks more than just yield curves.
6:15 – Saudi Arabia risks and the petrodollar.
7:20 – The United States no longer needs the Middle East.
8:00 – Have the 2008 liquidity risks gone away.
9:00 – Who will bail out Deutsche Bank?
10:00 – Xmas Plunge Protection Team?
11:00 – Benefits with producers and potential pitfalls.
14:00 – Investors are not learning and risks are escalating.
15:45 – Be prepared and hold some cash + political risks.
16:40 – Gold and silver looking to break out finally.
Talking Points From This Week’s Episode
• 2019 will likely be a challenging year so be prepared and think ahead.
• The Federal Reserve has to raise rates to compensate for the next recession.
• Volatility will likely continue in the bond and equity markets.
• He feels the political situation in the U.S. will remain terrible.
Jaime Carrasco is portfolio manager at Canaccord Genuity Inc. in Toronto. From 2014-2018 he worked as Director of Wealth Management and Associate Portfolio Manager for ScotiaMcLeod. Before this, he worked for Macquarie Group, CIBC Wood Gundy, BMO Nesbitt Burns, Gordon Capital, and Merrill Lynch.
As a leading edge Canadian investment professional with 25 years of experience providing wealth management and investment counsel to affluent families, businesses and institutions both in Canada and Latin America, Jaime has garnered a reputation for questioning and challenging the status quo and exploring the most innovative investment strategies.
Jaime, whose mother tongue is Spanish, also speaks Italian and French and completed a BA in political science and economics at the University of Toronto in 1988. While a student, he worked for CS Yacht, a company that built luxury sailboats, thus spending his summers as a skipper for members of the Canadian establishment. Jaime credits this experience, and having survived sailing through Hurricane Bob in 1991, for learning lessons that have become a metaphor for his financial investment strategies;
“Like one’s financial wealth, sailing is not about controlling the wind, but rather about adjusting the sails.”