No one needs yes men in their lives. Or as the Japanese say, if two people always agree, one of them is redundant. Over the last two weeks I have friends tell me, “Yes Russell, GLT/TLT has worked well, but all your other stocks idea are crap”, or words to that effect. And its true. For the first 15 to 16 years, matching up stock picks with macro views worked very well for me, but no longer. To generalise greatly, I usually associate a surging gold price with not good outcomes in equity investing. Gold is surging, but the S&P 500 is at all time highs. More fool me.
Or if we look at gold versus treasuries on a long term chart, I thought the trend change we have seen in the last few years would also mark a trend change in equity leadership.
For that reason, I have been reluctant to suggest US stock picks. This was even the case when they fitted in with my ideas on fertility. Unless you have been living under a rock, the key to outperformance for years now is to be overweight the US, and large cap US stocks in particular - not necessarily the magnificent seven.
As a fund manager, I always tried to match up what I say with what I actually do (You would be surprised how often fund managers often do the exact opposite). As I thought the changes in bond yields and gold prices were going to be negative for US equities, I did not recommend two possible fertility trades, as they were large cap US stocks. While I can’t change the past, I do feel like I should at least share those stock ideas with you now, and if you think US stocks will stay in a bull market forever, then you can look at them yourself.
The blue sky thinking I had when researching the fertility trade is that one future growth business for the healthcare industry is not just IVF. As mentioned in my fertility updated, I think young women have understood the importance of freezing eggs. As the data shows, its the age of the egg that determines the success of IVF - not the age of the mother.
This has led to more eggs being frozen. UK NHS data shows that egg freezing is now the more common that getting eggs to use straight away (fresh).
So fertility is moving from an entirely natural process to a much more controlled process. Some fear designer babies, or sex imbalances as parents choose boys over girls. But what I see is the beginning of a new industry.
