Crescat Capital Quarterly Investor Letter Q4 2019

Crescat Capital Quarterly Letter

January 29, 2020

Dear Investors:

Download PDF Version Bear Market Looms The bear case for US stocks has never been stronger. The set-up looks like January of 2018 when we were similarly bearish yet the market kept screaming higher. Our views were strongly vindicated in February and over the course of that year. The speculative mania of 2019 was wholly unwarranted, not supported by macro …

Tavi Costa Featured in Barrons

Crescat Capital Videos & Interviews

Tavi Costa says opportunity may be knocking for one sector that’s been down in the dumps for a while. Oil-service stocks “have never looked so cheap,” Costa said in a tweet.

Running Hot

Crescat Capital Videos & Interviews

Download PDF Version The highly probable and downright inevitable unwind of today’s trifecta of financial asset bubbles: stocks, corporate credit, and Treasury bonds may soon morph into brutal bear market. The end game is unstoppable in our view and approaching fast. The Fed is between a rock and a hard place. It has been printing money like it’s the depth …

The Impending End of A Mania

Crescat Capital Videos & Interviews

Read PDF Version An important ratio of commodity versus equity valuations just reached a fresh 50-year low resembling two prior significant cyclical US stock market peaks in 1972 and 2000. Macro Imbalances There is a laundry list of dangerous assets bubbles in the global financial markets today that have built up over a record long US economic expansion: Highest ever …

Crescat Capital Quarterly Investor Letter Q3 2019

Crescat Capital Quarterly Letter

October 17, 2019

Dear Investors:

Read PDF Version Outlook for US Stocks and the Economy A breadth of deteriorating indicators is signaling an inflection point for the US stock market and economy. The percentage of inversions in the US yield curve surged to over 70% last month. This level of upside-down term premium has always led to severe bear markets and recessions in the past. …

Kevin Smith on Real Vision | Trade Ideas

Crescat Capital Videos & Interviews

Is the 36-year-old currency peg between Hong Kong and the U.S. on the verge of collapse? Kevin Smith explains his short thesis on the Chinese Yuan and Hong Kong Dollar in his most recent Real Vision interview.

Necessary, Normal, and Inevitable

Crescat Capital Performance Update

Read This Letter in PDF Form Dear Investors: Recessions become self-fulfilling prophesies late in an economic expansion at a point when people finally start believing and acting like one is imminent. It is particularly true when asset bubbles are present. A huge spike in concerns about the economy as measured by Google Trends analysis of the search word “recession” was …

Crescat’s Macro Trade Heating Up

Crescat Capital Performance Update

Read This Letter in PDF Form Dear Investors: Crescat’s “macro trade of the century” has just heated up significantly in August. In just the first two and a half trading days of the month, the Crescat Global Macro fund is up an estimated net 15.6% net MTD while the S&P 500 is down approximately 4.9%. All three legs of our …

Crescat Launches New Gold Strategy

Crescat Capital Videos & Interviews

“Precious metals are one of the few pockets of this market offering tremendous value to hedge against extreme monetary policies, bursting asset bubbles, and record global leverage”

Crescat Capital Quarterly Investor Letter Q2 2019

Crescat Capital Quarterly Letter

July 23, 2019

Dear Investors:

    Download This Letter in PDF Form We believe there is an opportunity to capitalize on a material downturn in the business cycle based on the composite of timing and imbalance indicators in Crescat’s 16-factor macro model. US Equity Markets The downturn could be particularly brutal for US stocks because we are record late in a fading economic expansion …

Tavi Costa Appears on the “Off The Chain” Podcast

Crescat Capital Videos & Interviews

In this conversation, Tavi and Anthony Pompliano discuss Bitcoin, cryptocurrencies, the current U.S. economic markets, China, precious metals, how central bankers handle recessions, and what Tavi thinks is most likely to occur in the macro world over the next few months.

On The Precipice

Crescat Capital Performance Update

Read This Letter in PDF Form Dear Investors: The US stock market is retesting its all-time highs at record valuations yet again. We strongly believe it is poised to fail. The problem for bullish late-cycle momentum investors trying to play a breakout to new highs here is the oncoming freight train of deteriorating macro-economic conditions. US corporate profit growth, year-over-year, …

An Abundance of Macro Timing Signals

Crescat Capital Performance Update

Read This Letter in PDF Form At Crescat, we remain steadfast in our net short US and global equities position in our hedge funds. We are driven by our macro fundamental modeling and themes. Three historically extreme macro imbalances in global financial markets today pose significant risks to investors at large today, including: Record US equity valuations; Historic global debt-to-GDP; …

Kevin Smith Interviewed on Real Vision

Crescat Capital Videos & Interviews

Kevin Smith, joins Real Vision for his first Trade Ideas interview to discuss his bearish bet on the stock market. He reviews a variety of valuation metrics, highlights the flashing red signals from his macro indicators, and discusses how to make the trade, in this interview with Jake Merl.

Tavi Costa Interviewed on Real Vision

Crescat Capital Videos & Interviews

Tavi Costa, makes his Real Vision debut in style — with a bullish trade idea on precious metals. He highlights why it’s finally time for gold to start outperforming, supports his thesis by examining a variety of macro indicators, and discusses how to play the current setup, in this interview with Jake Merl.

Crescat Capital Quarterly Investor Letter Q1 2019

Crescat Capital Quarterly Letter

April 18, 2019

Dear Investors:

    Download This Letter in PDF Form The year-to-date rally in global risk assets after the Fed flip appears to us to be a last gasp of speculative mania for the current economic cycle. In our view, three flawed narratives are driving late-cycle euphoria in financial markets today: “Central banks can always prevent a downturn in financial markets and …

Russell 3000 To Silver Ratio Now Near Record Levels!

Crescat Capital Current Views

Russell 3000 to silver ratio now near record levels! Double top formation after a retest of peak tech bubble levels? Stunning how historically depressed a “high beta” safe haven asset is this late in the cycle. New Crescat video out: https://www.youtube.com/watch?v=zoDePDL2etE&t=2s

Blow Off Top For Bear Market Rally

Crescat Capital Videos & Interviews

March 23, 2019   Dear Investors:   Thursday had the feel of a blow-off top for the bear market rally. We are near historic valuations for US stocks across at least eight fundamental measures and at a record late stage in the business cycle. Equity markets appear more stretched relative to underlying deteriorating fundamentals than ever. Micron this week was …

Macro Trade of The Century

Crescat Capital Performance Update

Dear Investors: At Crescat we remain positioned to capitalize on a downturn in the economic cycle. Global equity markets peaked in January 2018 while US markets peaked in September 2018. Crescat’s hedge funds were two of the world’s top performing funds in 2018 as a result of our bearish macro views and positioning last year. We are confident that was …

Bear Market Rally Looks Done

Crescat Capital Current Views

GDPNow (YoY) is signaling the worst US economic environment since 2015, the year of the China currency mini-devaluation, oil crash, and EM meltdown. The US stock market is levitating while many economic indicators are turning down. Bear market rally looks done.

US Household Gross Assets to Disposable Income

Crescat Capital Current Views

Just one way to visualize today’s asset bubbles only beginning to burst. MMT: The idea that such imbalances can be permanently sustained through money printing without business cycle downturns or inflation. An absurd idea. Not modern at all. Poised to fail as throughout history.

Bear Market Rally Sets Up Opportunity For Crescat Strategies

Crescat Capital Videos & Interviews

Dear Investors: There is indeed a business cycle and timing it ahead of key inflection points is key to successful long-term investing. Based on our analysis, we are heading into a bear market in 2019 that will coincide with the start of a global recession that will not be officially acknowledged until well after it began. For the following reasons, …

Strong 2018 for Crescat – Macro Opportunities Abound

Crescat Capital Videos & Interviews

Crescat Global Macro Fund and Crescat Long/Short fund delivered strong returns for both December and full year 2018 in a difficult market. Based on Bloomberg reporting, Crescat had the number 1 and 2 performing US hedge funds in December and the number 1 and 3 performing US hedge funds for 2018. We are pleased to announce the official performance for …

Will $NFLX Ever Be Able To Monetize?

Crescat Capital Current Views

A major disconnect: The more cash $NFLX was projected to burn, the more its stock price went up for four years. Now, the company is raising prices, but costs are going up too. Will it ever be able to monetize or is this just a QE bubble stock destined to deflate?

This Is Not A Picture Of A Healthy Global Economy

Crescat Capital Current Views

Over 80% of all non-financial stocks in Canada lost money on a free cash flow basis in the last 12 months! Australia, US and Asian countries aren’t too far behind. This is not a picture of a healthy global economy.

2 of World’s Top Funds in 2018 per Bloomberg

Crescat Capital Videos & Interviews

“As the dust settles on a troubled year for hedge funds, some managers escaped the wreckage and even thrived”, according to Bloomberg who recognized Crescat for its leading performance among hedge funds globally in 2018:  https://www.bloomberg.com/news/articles/2019-01-04/hedge-funds-returning-20-show-all-is-not-lost-for-smart-money

Crescat Capital Quarterly Investor Letter Q4 2018

Crescat Capital Quarterly Letter

December 31, 2018

Dear Investors:

    Download This Letter in PDF Form We are happy to report estimates for Crescat’s 2018 performance: Profit Attribution by Theme Investment Outlook Summary September 20, 2018 should mark the closing high for the S&P 500 to end the second longest bull market in US history. It should also mark the top of the “everything bubble”, a term coined …

Crescat November Performance Update

Crescat Capital Videos & Interviews

December 12, 2018 Dear Fellow Investors, Performance and Profit Attribution In December through yesterday’s close, Crescat Global Macro Fund (CGMF) is up an estimated 5.9% month to date and 29.9% year to date and Crescat Long/Short Fund (CLSF) is up approximately 7.4% month to date and 20.6% net year to date. Through the same period, the S&P 500 is down ...

Crescat Capital Quarterly Investor Letter Q3 2018

Crescat Capital Quarterly Letter

November 16, 2018

Dear Investors:

    October was a frightening month for investors around the world. From Hong Kong to New York, stock markets were slammed by a wave of fears about slowing growth, trade wars, and higher interest rates. The Nasdaq took the brunt of the damage. Stocks like Amazon and Netflix both lost around one-fifth of their value as the Nasdaq Composite …

Crescat Tops the Chart in October

Crescat Capital Videos & Interviews

Dear Fellow Investors, October was a frightening month for investors around the world. From Hong Kong to New York, stock markets were slammed by a wave of fears about slowing growth, trade wars, and higher interest rates. The Nasdaq took the brunt of the damage. Stocks like Amazon and Netflix both lost around one-fifth of their value as the Nasdaq …

Crescat Delivers Strong October Results

Crescat Capital Videos & Interviews

For the third time this year, Crescat Global Macro and Crescat Long/Short hedge funds were featured among Bloomberg’s monthly top U.S. hedge fund performers. See October’s Bloomberg Hedge Fund Brief. Year-to-date and long-term performance remain strong as our macroeconomic themes and proprietary models continue to uncover successful investment opportunities.   © 2018 Crescat Capital LLC   Case studies are included …

Crescat Capital Quarterly Investor Letter Q2 2018

Crescat Capital Quarterly Letter

September 15, 2018

Dear Investors:

Download Letter (PDF) Our three best macro ideas today are complementary plays on the unwinding of currency and financial asset bubbles at a likely peak of the global capital cycle, the most leveraged in history: Shorting US stocks at proven, historic-high valuations relative to underlying fundamentals with abundant catalysts for a near-term bear market leading to a US recession; Shorting ...