How to Prepare Your Portfolio for 2024

A top trader shares his game plan for the new year.

Transcript

00:00 is your outlook for next year shaping? How is it coming together now that we're

00:03 already staring impossibly at the end of November right around the corner? I

00:08 think if you've been cautious as I have been I think you want to maintain that

00:12 posture going forward. We are enjoying something of a seasonal rally here. I

00:17 don't know if it goes away through the first few days of January. Typically it

00:20 gets really red hot towards the very last few days of December and first few

00:24 days of January and then we go off a cliff a little bit. So I do see us going

00:28 over that cliff a little bit. Having when the January effect kind of wears off and

00:33 it gets a little nasty into February especially if the government is shut

00:36 down. Especially if that provokes what was it Moody's the other day which

00:40 downgraded their outlook on US debt. I think once all three have then taken

00:44 away the triple-a rating and probably put a further negative outlook on US

00:49 credit ratings I think that will have a negative impact. I think that could

00:53 reverberate across the economy at a time when the Walmarts of this world and the

00:57 targets of the world are going into their own little problems where their

01:00 margins are being compressed by deflation. The part of the economy that

01:04 is consumer facing where the point of sale is between the consumer and the and

01:08 the retailer is going to run into a bit of a problem here. I see the

01:14 earnings S&P 500 earnings for next year I think it's still over 11% on

01:18 estimate but we've seen how the fourth quarter has come in from over 8% four or

01:22 five weeks ago down to a little over 3% right now on their estimates. So

01:26 I do see that coming in probably rather sharp. Sarge would you say that

01:32 you are currently bullish or more bearish for the new year? I think I'm

01:36 spotty. I think you have to pick your spots. It sounds like

01:41 I'm copping out but I'm not copping out. I think investors need to

01:45 have a large cash balance as long as they can get five five percent plus for

01:51 that cash. If you get five percent plus for that cash in 30-day paper hey you

01:56 know you're still liquid if your papers tied up for 30 days. That's not 90 days

01:59 it's not 180 days. So if you can keep rolling that over while the short-term

02:03 rates are this high how much you mean really missing out on? I mean if yeah you

02:08 might get a little bit more in equities in some equities but other equities are

02:11 probably going to be hurt to greater degree. So yes my largest exposures are

02:15 still intact. I'm still long Microsoft ServiceNow, AMD, NVIDIA. I'm still long

02:21 all the crazy dangerous names. I added to Palo Alto this week. I'm still long

02:25 CrowdStrike. So yeah but I also it's tempered it's measured and and I do

02:31 have a sizable chunk as I have almost all year in cash because I'm getting

02:36 paid for cash.

02:39 [BLANK_AUDIO]