132 Comments
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orcaM's avatar

I would very much like to see a "long-only ETF portfolio with a medium/long term horizon (1y+) and perhaps use as a benchmark a 60/40 portfolio to measure performance"

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Alfonso Peccatiello (Alf)'s avatar

Will do! :)

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orcaM's avatar

Thank you!

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Jack Burns's avatar

Would love to see the long only portfolio!

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Alfonso Peccatiello (Alf)'s avatar

Alright, will do!

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Pepe's avatar

I wonder if you are too optimistic about inflation. Even though the Fed is trying to tighten it is not clear that inflation will respond. Much of energy inflation precedes Ukraine and is driven by the regulatory hell the administration is posing on US energy production and not demand.

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Alfonso Peccatiello (Alf)'s avatar

True indeed. I stressed out how supply constraints are a serious component not to underestimate here.

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Pepe's avatar

I guess I am extremely bearish on rates. I am assuming that inflation is driven more by fiscal policy and a pandemic hangover. I don't see the Fed being able to tame inflation. I also think the Fed is beginning to panic. I find it very odd that extremely dovish members such as Brainard and Kaskari are now suddenly saying the Fed will no longer be accommodative and QE will be a sudden QT. Policy reversals don't normally play out very well ;(

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Robert Horne's avatar

your work is great down to earth and no bullshit

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Alfonso Peccatiello (Alf)'s avatar

That's what I am going for! :)

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Zechariah Shown's avatar

Long-only ETF allocation would be interesting

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Alfonso Peccatiello (Alf)'s avatar

Ok, point taken!

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John Snow's avatar

Hi Alf, I also like the idea of the long-only ETF portfolio! A question in the meantime: if you had not yet invested and considering the current Quadrant 4 situation described in your article, would you wait out the hiking steps before entering the market (long)? Thanks

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Alfonso Peccatiello (Alf)'s avatar

Markets tend to be forward looking and a serious hiking cycle is already priced in.

I am waiting either for earnings to be repriced down (as per my model) or for Central Banks to change their tune - not happening soon I guess.

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Alexandre's avatar

A "long-only ETF portfolio with a medium/long term horizon" is exactly what I am investing in right now, so I would to see your take on it

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Alfonso Peccatiello (Alf)'s avatar

Yup, I figured out it might help many

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Steve Armitt's avatar

Yes, would be interested in the long-only portfolio. It doesn't need to be year plus, would be OK if it changed with cycle needs.

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Alfonso Peccatiello (Alf)'s avatar

Yep, the 1y+ is just an indication obviously. If cycle is changing, I'll change the allocation.

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Marc Jolicoeur's avatar

Alf, love this report and your framework is great. I would love to see tracking an ETF portfolio - as I am attempting to invest in this way.

Rather than a 1 dimensional long list of long / short ETFs; I would love to see this structured with balanced allocations in mind. For example, in Quadrant 4, what general allocations should be to bonds and bond proxies? 40% Would this be different in the other Quadrants?

Also how to manage risks with position sizing? For example, if Quadrant 4, SPY puts (or VXX) could be a volatility allocation, but certainly its not a great idea to risk more than x% of the portfolio on a single trade.

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Alfonso Peccatiello (Alf)'s avatar

Great point, Marc. Indeed the idea will be to build a portfolio using the Quadrants as the main indicator, and sizing each asset class accordingly.

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Scott S.'s avatar

Would really appreciate long-only ETF portfolio. I am not a sophisticated investor and keeping it simple would be great. When I do short it is w/ short ETF's so not sure if that is something you would consider adding as well. Love your work - there are only 3 folks I follow and respect and you are definitely 1 of them.

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Alfonso Peccatiello (Alf)'s avatar

Who are the other 2? Curious :)

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Scott S.'s avatar

Hi Alfonso, the other 2 are Jim Bianco (@biancoresearch) and @INArteCarloDoss (don't know who he is but seems to be pretty spot on, above my pay grade in for some of his stuff though I get the idea, I might not make it into @kittysquiddy new blog he is starting). I look what all 3 of you guys are saying and go from there. This world is crazy nuts and I lost my shorts in 2008, lost them again in gold in 2012 (thought the Fed printed money but thanks to guys like you know better now) and can't afford to lose my shorts any more - got kids to raise and put through college. I do appreciate your writings.

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Michael Errington's avatar

Great blog, read everything you write, a ETF google portfolio is a fab idea!

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Alfonso Peccatiello (Alf)'s avatar

Glad you like it!

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Luca's avatar

Excellent post as always Alf. I am sure you are aware how most investors are short duration here and positioned for higher equity prices so your contrarian call has even more value. Would love to see a 60/40 ETF portfolio. thanks for your work.

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Alfonso Peccatiello (Alf)'s avatar

My pleasure, Luca!

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Fabrizio Impala's avatar

Hello Alf, great piece of work. For the ETF long only, there is also value in othe areas (other than US). Would love to see exposure to other regions too ! China Tech for exemple, or EU Defense and Air

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Alfonso Peccatiello (Alf)'s avatar

Correct Fabrizio, it's going to incorporate different asset classes and jurisdictions!

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Carlos's avatar

a lot of this goes over my head by I am learning. Long ETF portfolio would be of interest for sure. Thanks

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bigT's avatar

By all means a long-only model ETF portfolio is welcome - esp one that takes into account your macro thoughts on how policies will impact markets in the year to come.

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ant885's avatar

Thanks for your content Alf. As a retail investor a long only ETF folio update seems pretty ideal!

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Alfonso Peccatiello (Alf)'s avatar

Alright, let's do it!

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