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  • Writer's pictureAgris Gruzdas

My predictions performance of 2020 and what to look for in 2021

In Latvia we are close to a complete lockdown, with partial lockdowns are currently in place. Only essential stores are open. Strict movement restrictions have not yet been introduced, like in neighboring Lithuania now or previously in Italy during the first outbreak wave of COVID-19. Still, one has to fill out a special questionnaire an receive a QR code to be able to cross the border. Any partying and festivities outside one household are forbidden. And we are talking about one of the least affected countries during the first wave of corona virus. So, you never know how things may unfold…

We live in interesting times (just remembered the slogan of the 58th Venice BiennaleMay You Live in Interesting Times” which ran in 2019). Who would’ve thought that in real life you would have to face things that were conceivable only in movies? It seems that only zombies are missing right now to make a complete set… It has this awkward feeling that this is happening with someone else, not us. It feels like it is some kind of TV reality show. The funny thing is that over some time you start get accustomed to the new order and routines. A habit to wash hands everywhere you go, avoid human contact whenever it’s possible, wear mask in public places and so on. It’s somehow scary to get used to all of this.

What is impossible to get used to are government’s actions and communication. I assume that this problem is in many countries and we are not exception. In a way I see it more as communication crisis rather than pandemic. Relentlessly evolving conspiracy theories, populism, and even protest outbreaks takes a hard tall on everyone.

If we look at the COVID Numbers, it looks like the vaccine has stopped or otherwise limited the spread of the virus. Look at the World data:

Europe vs USA data:

and distribution data:

And what’s even more interesting – the vaccine is finally here; everyone should be eager to get it. Yet we face another problem with logistics. Besides, generous load of “fake news” junk floating around, social media platforms do not help either. IT HAS BEEN AN YEAR since the Covid tops any news around the world!

I think that the main focus should be on the vaccination progress, updates and further prognosis of virus – until we can actually see the “end of it”. There’s no precise data available about how much of the population needs to be vaccinated to stop the spread and mortality. If we look at history, the measles vaccine was needed by most of the population to stop the spread. Below is a graph showing World Data on children vaccinations globally:

Looking at all of this, one thing is clear. The way out of this crisis will not be as quick and easy as we would like it to be. You most likely will need a vaccine passport and being vaccinated against Covid-19 to be able to travel. Various vaccinations are already needed before traveling, for example to Africa: hepatitis B, rabies, meningitis and Yellow fever, when going to Kenya, to name a few, for example.

It is equally important to take anti-malarial drugs when going to the malaria regions of Africa. If you visit the Sahara region of Africa from December to May, you should definitely get meningitis vaccination, since this period is the culmination of this disease. Although vaccination requirements may vary from country to country, it is important to get a polio vaccine if you are going to Afghanistan or Pakistan. In many countries, visitors to international countries are advised to receive the Yellow fever vaccine. So, getting vaccines to travel is really nothing new. So far forecasts say that in 2021 Covid will be more or less defeated. I made a big mistake in my predictions last year since I thought that the second wave won’t affect us that much, because there is more knowledge and experience about it. But the reality looked much worse…

The virus has also contributed to the realization of "helicopter money" idea. In addition, countries are providing unprecedented fiscal stimulus globally. Public debt is growing very fast. Look at this chart:

Looking at all this, there is a feeling that low (often negative) national central bank interest rates will be impossible to raise in the near future. All this takes us into unprecedented territory. The way out of this debt crisis will be very long.

There are many other things we can look back on, besides corona virus, though. One of my first blog posts was about how to spot fake traders, signal traders, deposit pyramids and other "scam artists". At a time when financial markets are once again very active and volatile, these workers are just as active.

I would like to say that there is now even more scamming activity than ever before. Social media and access to internet opens up unprecedented opportunities for these people. Furthermore, they advertise a lot. And nothing has changed - once again fantastic trading results are demonstrated, trading strategies that earn mountains of gold are traded. The best indicators – “just press the buy and sell buttons” they claim to promise you easy money.

Wall Street trading bots, quantum robots, etc.… “Former hedge fund, Goldman Sachs or JP Morgan traders” have now started marketing their training programs to “ordinary people”, and so on…They have no shortage of ideas how to extract money from gullible individuals. So, nothing really new here.

Looking at all this, I had written a number of recommendations – which financial instruments to follow.

One of my first suggestion was to follow the gold/silver ratio. I wrote about it on March 25. Since then, the price of gold has fallen by 50% relative to silver!

The price of silver has risen significantly faster than gold. Although, both assets have made an impressive rise in 2020. Gold and silver recommendations have been one of my best recommendations. The price of gold has risen by 20%, but the price of silver by almost 100%!!! Currently, both gold and silver are experiencing a price correction. Currently I am looking into buying options of these assets. I believe that both gold and silver have the potential to grow by at least another 100% in the long term.

I have written several times that I do not recommend investing in stock indices, and I have to admit I was wrong here. Since the fall of S&P500 last March, it has grown by 60%. And this is one of the most important reasons why my result this year has been stagnant since March.

I have tried several times to trade stock indices with the goal that the price will fall below the March lows. If there were several positions that brought me pros, then these transactions regularly erased this profit. I must say that this has been my biggest mistake and the biggest obstacle to my trade almost all year round. I was convinced that there must be a stock market crash that it completely darkened my mind, and I couldn't look at it any differently. Although in August I considered a possibility to buy some stocks, but I just couldn’t force myself to buy them at such prices…

Previously I have also often spoken about the US dollar and its impact on the markets. I have expressed the view that the dollar needs to become cheaper, and that has happened. Or more precisely, my recommendation was as follows:

Then the dollar fell below. I think that the decline will continue until the beginning of 2021 and then there should be a slight correction.

And then, I've often recommended Bitcoin. And this has been the most successful deal and recommendation in my trading history. Although this is not shown in the overall scoreboard. Because I don't trade cryptocurrencies on a daily basis, and I invest in crypto in the long run. So, there are no transactions with BTC in this account, so, no results of which to publish. But you already know that the rise has been more than impressive. I am rather convinced that the potential is still huge for cryptocurrencies. And here we must not forget that cryptocurrency prices can fluctuate a lot. I am talking about price fluctuations of 50% over a small period. With this in mind, one can look at the crypt market. Of course, right now, with the current price increase, I do not recommend buying BTC. However, in anticipation of the correction, I am standing by for some purchasing opportunities.

Stay tuned!


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