How a Market Wizard KEEPS His Returns with Tom Basso | The Outlier Podcast Ep57
Dec 30, 2023
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Tom Basso, a Market Wizard, discusses his predictions for the stock market and the economy in 2023. The podcast touches on profitable moves in soft commodities and the stock market, the resilience and challenges of the tech sector, concerns about the stock market and the economy, the potential of fusion energy, advancements in the automotive industry and hedging strategies, the impact of election years on the market, and ways to connect with the guest on social media.
Tom Basso observed surprising stock market highs at the end of 2023 and emphasized the importance of being prepared for fast market movements and potential volatility.
Basso highlighted the profitability and volatile moves in certain futures markets like orange juice and coffee, attributing the primary drivers of his own performance to trends in the stock market and the futures market.
Basso discussed the potential impact of alternative energy sources like nuclear, fusion, and hydrogen on the economy, environment, and investment opportunities, emphasizing the need for balance, diversification, and being prepared for economic disruptions.
Deep dives
Tom Basso's Observations on the Stock Market and Commodity Trends
Tom Basso discusses his observations on the stock market and commodity trends in 2023. He mentions that he did not predict the stock market reaching new highs at the end of the year, and that it surprised him. He also noticed unusual trends in some indicators, suggesting the market was running on fumes. Basso highlights the profitability of certain futures markets, such as orange juice and coffee, and their volatile moves. He attributes the primary drivers of his own performance to trends in the stock market and the futures market. Basso also reflects on the movement in early 2023, where the market failed to sustain a bull move. He explains his hedging and all-weather strategies, emphasizing the importance of being prepared for fast market movements and potential volatility. Lastly, Basso discusses energy options, such as nuclear, fusion, and hydrogen, and their potential impact on the market and future energy sources.
Positioning for 2024 and Reacting to Market Developments
Looking ahead to 2024, Basso mentions his focus on the upside of ETF markets and dynamic position management. He plans to keep an eye on market movement and be ready to react accordingly, with the potential to transition to short equities if the market turns. Basso also highlights the importance of diversifying across different markets, including commodities, to seek profit opportunities. He shares his strategy of keeping stops tight, hedging when necessary, and being open to different trades and market conditions. Basso acknowledges the uncertainty of the future and the need to adapt and react quickly in response to market developments and economic disruptions.
Considering Election Year Catalysts and Economic Trends
Basso comments on election year implications, noting that news events and world events during these times can serve as catalysts for market movements. He explains the potential impact of economic disruptions, such as interest rate changes and supply or demand interruptions, on various markets. Basso considers how election years can trigger panic or euphoria and contribute to market trends. He provides insights into the risks associated with bonds and the challenges of the 60/40 investment strategy. Basso emphasizes the importance of being prepared for market movement, considering various factors, and adapting strategies to trade profitably in all conditions.
The Role of Hedging, Trend Following, and Risk Management
Throughout the podcast episode, Basso emphasizes the significance of hedging, trend following, and risk management strategies. He highlights the benefits of being prepared for market downturns, maintaining balanced portfolios, and adjusting exposures to manage risk. Basso discusses the importance of tracking indicators and market trends to make informed decisions, protect profits, and minimize drawdowns. He reflects on the challenges of managing smaller accounts and advises focusing on stock selection, position sizing, and following trend indicators to reduce risk. Basso also emphasizes the need to react quickly and maintain discipline while trading in volatile market conditions.
Exploring the Future of Energy Sources and Strategies
Basso shares his insights on the future of energy sources, including nuclear, fusion, and hydrogen. He discusses their potential impact on the economy, environment, and investment opportunities. Basso believes that fusion energy could disrupt the world economy, providing inexpensive and pollution-free energy. He stresses the need to consider alternative investments and profit opportunities beyond stocks and bonds, such as commodities, cryptocurrencies, and futures markets. Basso highlights the need for balance and diversification, as well as the importance of being prepared for economic disruptions that can create profit opportunities and mitigate risks.
Recorded 29Dec2023
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