Image 1. Lucky you!
This is the second in a series of pieces I will issue for Magnum Crows, catering to the long-term investor. I write this piece for William (welcome to the nest!) however I consider it fundamental to anyone looking to manage their investments outside of the prescribed ‘system’.
We’ve been prescribed a lot of nonsense.
Ultimately money managers place their interests well above yours - commissions for more or less doing nothing. Their livelihood has next to nothing to do with your portfolio performance; they will earn their living just as well if your portfolio takes a 20% haircut in the next market correction.
Wolves in bird’s clothing. Or better yet, Monkey Managers! Yes, they are effectively salesmen, foisting shitty stocks, prepackaged bank products like mutual funds, and exchange-traded funds (ETFs) onto market monkeys (us).
It is on us monkeys to look out for our own interests, as usual. This guide is hopefully a start to building a portfolio that works for you, geared to lower level of management. However, even manic day traders should take note.
Portfolio Structure: Appreciation of timing
The most common question is ‘what do I invest in?’ There is no one answer to this, and even if there were - it would be subject to time.
Ergo, the second most common question: ‘when should I buy?’
Then we have this classic advice: time in the markets is more important than timing the markets. Time meaning that your holding period will do better for you than focusing on short-term gains. OK true, but… timing helps. Compounded over time, well - there’s your time in the market actually on your side.
It’s fair to say: no one can predict the future. While themes that are relevant or hot items today may disappear from public memory next year; most products return to a mean average over time. But you still don’t want to buy at peak hype. And you certainly don’t want to stay in a stock once it’s drawn down well past your stop.
And yes, often you are best served by being a contrarian, or at least open to new ideas. It would not have been strategic to double down on the passenger train industry after inexpensive short-haul domestic flights took off post-war. Literally.
… and Allocations!
Before I get into themes, I want to share my investment allocations at this time. This takes into consideration the economic cycle, as well as time toward expected retirement, or overall investment goals. The breakdown I share below is for a Gen Y, or millennial cohort - who got it pretty rough depending what side of the mid-90s they were born. I sympathize even more for Gen Z.
By rough I mean high home prices, less equity and savings, and now rapidly rising prices and stagnant (and declining, in real terms) wages. Add to this the manic context of pervasive social media, social engineering, and full-on grift.
Nonetheless we can insulate ourselves from some of the grift and inflation by using timeless strategies within our portfolio - namely energy, income-generating stocks, cash (interest-bearing), and metals - in addition to some strategically timed investments. I don’t mind sounding a little like Warren Buffett.
The 60-40% Myth
The old recommended 60-40 allocation of stock and bonds for the young and 40-60 inverse for retirees is dead in the water. Why pay for the services of a money manager when you can simply follow the mac-n-cheese recipe yourself? Yes, stocks generally see higher returns being riskier assets. It works, sort of (but Reverend, what if we were to combine the risk of stocks and income of bonds? Answer below).
That doctrine suffers from no imagination at best, and a scam at worst. It may always have been a grift - think of all the opportunities lost in the form of commodity cycles, energy shortages, a run on silver, a housing boom and bust. Were these hard-working individuals positioned for these opportunities? Likely not.
And where is cash in all this? I did the math so you don’t have to:
A 25% downturn in equities (a real bear market) requires a 33% upside many years later only to get back to zero. Had you been in 40% cash at the height of market frenzy (AI, anyone?), your drawdown in this bear market would only be 15% by total equity. Then putting cash back to work at the lows would put you 14% ahead of your peers once the correction ran its course.
Now let’s do that a few times. Over the course of five economic cycles (probably what you can expect during the course of your working career), you birds would have twice as much at retirement as your fellow 60-40 monkeys.
Crow Breakdown
Below is my personal allocation at the time of Q1 2025. This is not investment advice, just crowing from a bird. You will be better served using the services of a professional money manager (yeah, right). Yes, it is a personal allocation. Yes, it is timed to the present. But most of all, it’s relevant to everyone.
10% metals and miners (up to 2% physical or equivalent)
10% energy, cycle dependent
15-20% dividend stocks, bonds
10% emerging markets (and individual stocks for risk-takers)
5-10% biotech and health
10% equity (broader market, thinking near a cycle top)
30-40% cash (at this time, with 20-30% to be allocated at cycle lows)
There is no guarantee in investing - that is the inherent nature of reward for (we hope) commensurate risk. One thing is for sure - it is not strategic to keep ‘dead money’, aka cash under your mattress or the pocket of pants you haven’t laundered in a year. Inflation is part of the system and is partially designed to erode obligations, and thus your demand power.
For this reason, all my cash is typically in MMFs (money market mutual funds) or equivalent securities that are at or near the Federal Funds Rate (FFR).
Crypto, another topic entirely… as well as real estate (hey, you can still invest in REITs).
So is land. Yes, it’s the least liquid of all assets (try getting rid of it after a drought, har har). I think it is a good investment all the same, but quality of land, local governance, and access to resources (including distance to economic centers) is of utmost importance. Topics for another piece.
Metals: It’s always a good time
I already hear the usual argument against metals here: “gold is not interest bearing!… You can’t eat precious metals!” Yes, but which of today’s fiat currencies were used during Mesopotamian times? Was not Jesus betrayed for thirty pieces of silver?
Not thirty shekels.
The key is relative value - metals have been used as a means of exchange and a store of value since the dawn of time. Thus with limited supply these will always have intrinsic value vis-a-vis whatever fiat is in circulation. And fiat is just that - a decree by the ruling authority that this means of exchange is valid, backed by the socioeconomic-military capability of that governing body.
It’s implicit trust: until it isn’t. How many regimes have yet to fall.
So, a “dumb rock,” you say? Fine, that’s why we’ve added miners to the mix (many of which share their revenue in the form of dividends). Without going deep into fundamentals - you are welcome to and I encourage it after all - I like some legacy miners as well as a couple of what I think can be promising charts. Especially in platinum at this time.
Refer back to Crow Cash I for a couple of ‘legacy miner’s as well as other themes relevant to the Crow Portfolio in 2025. I will present further investment ideas in these categories below as an expansion of that piece.
Image 2. Sprott Junior Gold Miners (SGDJ)
Junior miners are fundamentally a leveraged bet on rising precious metals. They often see outsized gains during bullish cycles in gold. Well, usually.
This chart (SGDJ) is interesting for its tepid response to a historic 50%+ rise in gold prices as of last year. Yet we are still below the 2021 SGDJ highs! This can be partly attributed to inflation cutting into margins (high cost of inputs, especially energy), as well as the higher cost of financing.
But with the possibility of the new US administration shifting policy to take down rates this year by whatever means necessary - they need to refinance after all - in addition to an energy industry aligned Trump, these are tailwinds for what could be a lag effect. Especially if gold stays bid above 2500.
And one more thing - falling rates make precious metals more attractive.
The case for Platinum: SBSW
Sibanye Stillwater is one of the world's largest primary producers of platinum, palladium, and rhodium - and a top-tier gold producer - as detailed in Crow Cash I.
Image 3. Sibanye Stillwater (SBSW) weekly chart
The stock has gone sideways since my last recommendation, although the two scenarios remain in play. A weekly close over 4.50 could then see an attempt at 6.00, although at these levels I expect 2.70 to offer strong support if tested. So 80 cents for a possible 2.50 in the second quarter of 2025.
Another play on platinum below:
Image 4. Anglo American Platinum Ltd (ANGPY) monthly chart
Perhaps the whale of the precious metals miners, RIO could be on the verge of a breakout from a descending upper rail. A fakedown could potentially light the fuse, otherwise a close above 73 could do the trick. Either way, the 61 handle offers reasonable value for the longer-term.
Image 5. Rio Tinto (RIO) weekly chart
As one of the world’s largest iron and nickel miners, VALE is subject to global economic conditions - if you believe the headlines that China is in an inescapable depression with Europe and the US soon to follow, then perhaps this could go lower. On the other hand, this dovetails with my Brazil thesis and a rising real would provide some lift. Regardless, this stock is at long-term lows and the upside is a more convincing case.
Image 6. Vale SA (VALE)
10.21% trailing dividend as of writing.
A miner, divvy stock, and an EM? Now you get it…
Divvy Stocks
Dividend stocks are those returning a consistent dividend to their shareholders - traditionally utilities, healthcare, consumer staples, energy, finance, tech/telecom, services, transport, and real estate sectors.
This is something I wish I had known when I first began investing, with the unfounded assumption that dividends were for covering rent at the old folks’ home. What purpose would income serve if I could get into stocks with ‘immediate’ 100% upside potential? You’re in for quite a surprise below.