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Spot The Odd Asset Class Out This Year

Tyler Durden's picture




 

Amid the carnage in commodities, frenzy in FX, and breakdowns in bonds, one asset class in one region of the world stands among the majors... The Nasdaq 100 Index.

(click image for large legible version)

Source: VisualCapitalist

This chart from Macquarie puts the year in perspective for commodity investors. It covers various asset classes including equities, FX markets, bonds, and commodity prices, and charts them YTD in terms of US dollars and expressed as a percentage.

For a simple chart, there is a lot of information here to consider.

For starters, on the far right is the prime culprit in stymying commodity markets: the Dollar Index. The US dollar, which commodities are priced in, has had a big year with close to a 10% return YTD. While the US economy is still suspect at best, it has served as a safe haven for investors this year over markets such as Europe, China, and Japan. As a result, the USD has had the best performance of all of these asset classes listed on the chart.

The other market on the right worth noting is the Nasdaq, home to many of the tech stocks that have kept the US economy chugging along. While some are skeptical of the true value of some of the companies in Silicon Valley, it cannot be denied that the Googles, Facebooks, and Amazons of the world are the key to keeping US growth intact in any capacity.

Of course - you should not worry about US equities being expensive or mispriced...

*  *  *

To the left of the zero mark, things get dire fast.

Precious metals such as gold and silver are down, but this can be mostly attributed to the strength of the dollar. Energy and industrial metals, on the other hand, have been thoroughly routed due to a combination of dollar strength and slowing Chinese growth. Many agricommodities have struggled as well.

The biggest losers of the bunch include rhodium, nickel, iron ore, and lean hogs, all which are down more than 30% YTD.

 

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Sun, 11/22/2015 - 22:45 | 6826244 Midas
Midas's picture

My silver dimes are outperforming Kyle Bass' nickels.  FTW!

Sun, 11/22/2015 - 23:01 | 6826275 booboo
booboo's picture

Makes sense, they make paper with pulp

Sun, 11/22/2015 - 23:39 | 6826352 Dame Ednas Possum
Dame Ednas Possum's picture

Gold down?

I just checked the stack and it's not one micron less than when I left it.

In fact, it seems to just keep growing...

In gold we trust.

Mon, 11/23/2015 - 07:03 | 6826765 15horses1donkey
15horses1donkey's picture

http://zhc0.com Zero Hedge Coin Zero holding at zero value.... a genuine preserve of wealth if ever there was.

Wed, 11/25/2015 - 19:47 | 6840426 SILVERGEDDON
SILVERGEDDON's picture

Man, you are a persistent dim bulb.

Zero Hedgers stand behind physical assets, not rainbow farting skittle shitting unicorn crypto crap.

Wed, 11/25/2015 - 19:48 | 6840430 SILVERGEDDON
SILVERGEDDON's picture

My silver dollar bought 4 gallons of gas in 1964.

Today, it buys 7 gallons or so.

No issues with volatility there for me.

Mon, 11/23/2015 - 02:49 | 6826551 ebworthen
ebworthen's picture

S&P 666, Gold at $10,000/troy ounce, Silver at $1,000/troy ounce - that is true valuation kids.

Wait for it!  ...................................................................

Mon, 11/23/2015 - 03:06 | 6826624 HardAssets
HardAssets's picture

The lead and uranium markets are looking for a bang up year.

Mon, 11/23/2015 - 04:30 | 6826693 DIGrif
DIGrif's picture

Unfortunately you stand a very good chance of being 100% correct.

Sun, 11/22/2015 - 22:56 | 6826265 Dog Will Hunt
Dog Will Hunt's picture

Funny--my lean hog was up for most of the year.  

Mon, 11/23/2015 - 01:17 | 6826488 hairball48
hairball48's picture

ROFLMAO! @Dog,,,

Mon, 11/23/2015 - 04:30 | 6826691 DIGrif
DIGrif's picture

I am getting old :-(

Sun, 11/22/2015 - 23:07 | 6826280 rapetrain
rapetrain's picture

The last graph is misleading. EBITDA is a tool more relevant to basic industries dominated by capital-intensive long-lived asset classes. Over the last 20 years, the 500 largest companies in the world have gone from asset-heavy (Exxon) to capital-light (Apple).The S&P of 1990 is not the S&P of 2015.

EBITDA also ignores distinctions in the quality of cash flow resulting from differing accounting policies. Not all revenues are cash, but they are still added back into EBITDA.

EBITDA is probably best assessed by breaking down its components into EBIT, Depreciation, and Amortization. Generally speaking, the greater the percentage of EBIT in EBITDA, the stronger the underlying cash flow.

Since EBITDA overstates cash flows during periods of working capital growth, that chart has a larger denominator than would otherwise have been had it been denominated in real cash flows. Grab your space suits, gentlemen, because I think we are probably way above the last peak.

Sun, 11/22/2015 - 23:18 | 6826305 Spungo
Spungo's picture

As Mr Klarman said, ebitda is like measuring a business without the business. Why would someone intentionally ignore capital costs? Based on ebitda, Barrack Gold is an amazing investment even though the company is selling assets at the bottom of the market just to cover debt payments. 

Sun, 11/22/2015 - 23:34 | 6826339 shitco.in
shitco.in's picture

Where is Bitcoin? 

Mon, 11/23/2015 - 00:13 | 6826410 Squid-puppets a...
Squid-puppets a-go-go's picture

its not represented. Neither are casino chips.

Mon, 11/23/2015 - 04:29 | 6826690 DIGrif
DIGrif's picture

AMEN..... and for the millionth time F*$k Bitcoin.....fiat piece of crap.

Mon, 11/23/2015 - 04:41 | 6826696 Kamehameha
Kamehameha's picture

Tor Network = NSA spook op (look it up...they fund the servers).

BitCoin = NSA spook op + anyone w/51% servers "owns" BC

Ag/Au = not man made, at least anytime soon

Mon, 11/23/2015 - 00:30 | 6826440 Bunga Bunga
Bunga Bunga's picture

Up YTD.

Mon, 11/23/2015 - 02:55 | 6826611 Jizz
Jizz's picture

Yep, it was on this list last time I saw it on Zero Hedge.

Mon, 11/23/2015 - 00:07 | 6826396 firstdivision
firstdivision's picture

Copper is shitting the bed tonight, about to fall below $2.  Forget Dec rate hike, but expect another QE.  Bet that emergency fed meeting was due to how bad global trade truly is, and markets are going to crash.

http://finviz.com/futures_charts.ashx?t=HG&p=m1

Mon, 11/23/2015 - 00:59 | 6826472 Implied Violins
Implied Violins's picture

That's going to put Boris's cousin out of work. Bullish though for couches and socks.

Mon, 11/23/2015 - 00:25 | 6826433 Mentaliusanything
Mentaliusanything's picture

Summary,,,

Clearly deflation in everything that cannot be printed at zero cost.

Lookout below, because you can ignore the reality but you cannot ignore the consequences of reality.

Mon, 11/23/2015 - 00:45 | 6826459 zeroaccountability
zeroaccountability's picture

Silver down .16 ($14.03) 9:45 MST

Mon, 11/23/2015 - 01:23 | 6826494 onmail1
onmail1's picture

ChimpOnDrugs(obamma) in the control room

Mon, 11/23/2015 - 01:46 | 6826528 U4 eee aaa
U4 eee aaa's picture

Glad we are finally seeing deflation. I hope prices follow. The Nasdaq can stuff it for all I care if prices come down

Mon, 11/23/2015 - 02:44 | 6826598 Conax
Conax's picture

Tomorrow is going to be another dramatic Monday.

They are hard at work stuffing PMs and buying dollars.

Mon, 11/23/2015 - 02:54 | 6826606 Kirk2NCC1701
Kirk2NCC1701's picture

Nothing too shocking or irrational here, ZH.

- Resources: cheap, down
- Energy: cheap, down
- Labor: cheap, down
- Financing: cheap, down

Hence...

- Margins: up
- Profits: up
- Exec Bonuses: up
- Shareholder Equity: up
- Markets: up

QED. No magic, no Star Trek science at play. Just basic human nature and Darwinism trumping "old school ideology".

For how long? TBD. Just remember that the rich can stay comfy and solvent longer than you can. Adapt and plan accordingly.

Mon, 11/23/2015 - 08:51 | 6826879 Youri Carma
Youri Carma's picture

So we got a massive FX and Equity bubble while commodities are in deflation.

Companies use ‘cheap money’ to load up on debt to off set their tax bill while manically buying back their own stocks creating a massive inflation in equities while cutting down on labor costs by sacking millions and cutting back future capital investments.

If this equity bubble pops this causes a massive deflationary spiral since all those leveraged stock buybacks will vaporize stock values and thus destroy capital over night. Also because the stock buybacks are happening at inflated values not at the bottom as usual.

Insurance companies and pension funds can’t save money at zero or even negative rates so have to get these extra costs on capital from their consumers hence rising healthcare costs and pension cuts to meet requirements. So inflation in exactly the wrong place bugging down consumers who are already beaten down by stagnating and lower wages.

Needles to say this is a very volatile mixture for disaster.

MUST LISTEN! - Jim Willie – Nov 2015 – FULL Interview https://www.youtube.com/watch?v=wugNMo5lWEw

Mon, 11/23/2015 - 08:46 | 6826886 kralizec
kralizec's picture

I didn't know Rhodium was worth manipulating.

Mon, 11/23/2015 - 23:26 | 6830075 Spungo
Spungo's picture

Here's an image I captured many moons ago

http://s2.postimg.org/3m9zj3dnd/666_bitcoin_1337_gold.png

Do NOT follow this link or you will be banned from the site!