Market Memo: Insuring Against Insanity
Narrowing down "Haves vs. Have Nots", Healthcare & NatGas Updates, New Baskets
With the turn of a new quarter, we at Team Citrini are once again musing about what the next few months will hold for markets. One thing is for sure: things are a lot less clear than the last time we mused back in January.
In fact, things are so dynamic that developments seem to be playing out faster than we can write about them – just as we think we’ve solved the consumer puzzle, identified a compelling new basket, or spotted an important shift in an existing basket, some big new headline seems to hit. And just for the sake of added difficulty, we’re publishing our thoughts immediately prior to the great tariff reveal of Trump’s “Liberation Day”.
Whether “Liberation Day” liberates us from relentless selling or from our money remains to be seen, but it’s more important than ever to look at the market in a manner that’s solely focused on signal rather than noise. We imagine that it’s only going to get more noisy from here…
Accordingly, we’re exploring ideas on both the offensive and defensive sides. We admit, we don’t have much of an idea what Trump will say. Honestly, we don’t think Trump himself has much of an idea - it’s entirely possible he won’t make up his mind until he’s actively announcing tariffs.
Our second quarter musings are a roadmap for navigating market turbulence, focusing on relative outperformance and long/short pairs.
We narrow down our basket from yesterday’s “Haves vs. Have Nots” piece, introduce an updated Insurance Long/Short basket and utilize the volatility to concentrate our existing portfolio positions in our best ideas, by exiting those where our faith hasn’t held up to the test.
Let’s muse…