I was reminded of something last week. A funny incident that helps define who you are in your youth.

I was having a campout with a few really good mates on my high school basketball team and we’re talking about family and our lives. There’s four of us in the tent: myself and a mate and two brothers a year apart in age. The two brothers were talking about their family growing up and their other three elder brothers. Their dad had the first three with his first wife, divorced her, married her sister and had our two friends.

“Wow I didn’t know that about you guys. How about that?”

My friend then pipes up after a short silence in the tent. “Wait. So that means your brothers are… also your cousins?”

The brothers: “Oh… yeah. Wow, I guess it does.”

The laughter that ensued kept us warm for the rest of the night and erased any of the memory of spraying too much mossie spray inside the tent (also the reason my sense of taste is borderline non-existent but that’s a different story).

I’m not sure what reminded me of that yarn from that long summer of 1995. Could have been this maybe:

Burn it all down.

Now on to China… wow. Whoever said Chinese data was too manufactured in a straight line?

Chinese GDP last week was bad. Really bad. With a rising USD and slumping China we’ll see more softening in the commodities space.

About one-third of demand for steel comes from the Chinese building sector so if that turns to cactus then iron ore gets sold off and everything attached to steel and building also gets sold off.

Wait – that’s already happened:

If David says it’s important then it’s important. It’s also a part of the reason why oil is weakening despite there being such a massive supply issue. The disconnect in the market is phenomenal.

Fact is that China does start being China again. These things pass. Copper will hit points at which accumulation as the generational buying opportunity of the year becomes mandatory.

Wait for PMIs to turn for that confirmation though. In my opinion oil can be slowly accumulated now in any way you see fit.

Make no mistake that the intentions of the sanctions against Russia were noble but massively misdirected. Sanctions have hurt the West far more than Russia. It’s the reason for much of the inflation we see and will drive us into recession. They’re not having any real impact on Russia at all.

In fact, Reuters have a little piece about Saudi Arabia doubling their oil imports from Russia (at a cheap price) so they can sell their own oil at top dollar.

I covered the restriction of gas into Germany with Jonathan Pain on the podcast last week about how calamitous a situation it is over there. If you’re keen on a very smart conversation with someone who knows please have a listen here.

There are two markets in energy now between actual supply and the spot price of the commodity. And they’re miles apart.

Now for the trade that paid…

I cannot stress enough how good a portfolio manager this woman is. Only problem is that she’s also Democratic Speaker of the House of Representatives. However she acquires massive amounts of stock in the lead-up to legislative changes, as long as she declares it she’s well within the rules.

You can go ahead and buy NVDA or buy the semis ETF SMH (listed in London or the US).

However the SMH ETF has its biggest holding in TSMC so any pro-American chips bill may not be amazing for the Taiwan mob. Going directly into Nvidia is probably the smartest way to gain from Congress actually working hard in the lead-up to August 4.

NVDA shaping up well here. Happy to follow Pelosi on this one. I’ve created a bull put spread on the options market and receiving a healthy credit for it which I’ll use to buy a call just in case the upside runs hard.

All the best and stay safe,

James

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