Welcome to the Machine - Quick Financial Update

What did you dream?

It’s alright we told you what to dream…

Wise words from Roger Waters in “Welcome to the Machine”, and never more appropriate… They told us what to dream about, and did everything necessary to devalue the currencies and ensure that the reflation of financial assets covers the quarters with the worst base comparisons on GDP.

The machine grinds information, it is the only thing it does, it devours everything available and manifests it in terms of price, volume and volatility (implicit). The risks that I have been mentioning for more than a year, some manifested (and that was good for Gold and Bonds) and others were blurred in the foggy context of central bank interventionism. They didn’t disappeared, they simply fell back in the context of easing quarter comparisons, I still believe that by the middle of next year we will see a resurgence of everything that I have been exposing. Now it's a vacation you need to take advantage of.

I have been a subscriber to Hedgeye for more than a year, and this is a good time to thank the service, the signal to get out of bonds and precious metals was more than timely. Most importantly, the content encourages curiosity and learning, it really is a platform to grow. My process has improved a lot since I started investing in 2011, but it has improved exponentially since I started paying attention in the right places.

Where will the VaultAssets funds rotate?

Get ready to trade the chop! What's that? Basically when the VIX rises you buy some, when it goes down you sell some, when the dollar rises you buy some, when it falls you sell some... You take advantage of dollar devaluation and it's inverse correlation with the following assets:

• XLE (Energy)
• XLB (Basic Materials)
• XLK (Technology) half the exposure
• IWM (Small Caps)
• USO (Oil)
• DBC (Commodities, Broad)
• DBB (Basic metals)
• GBTC (Bitcoin)

Yes, I’m going to buy the damn dips in those things, at least till the machine clogs with a high volatility event that compress time and brings all those risks back.