It's raining cats
And dogs and alpacas...
Well, here we are in Ashland Oregon cat sitting. It’s a thing. People go on holiday and want someone to look after their cats, dogs and alpacas, and you get to stay in their house rent free! Yes alpacas! I kid you not! We have our name down for that one! This is a worldwide phenomenon, although there is precious little cat sitting to be found in India where we are going to be in February and March.
There is much beauty in Oregon, people as well as scenery. Our first cat sit was in Hood River in northern Oregon on the Columbia River gorge. By comparison you could put Cheddar Gorge in your back pocket. The river is over a mile wide and the waterfalls emptying into it are impressive. The Bonneville dam is just downstream, so the wind and kite surfers have the place to themselves. We found a great coffee shop named “Stoked”, a surfing expression for those of you who never get your hair wet!
The town is on a slope that rises up some 800 feet above the river so scenic views in every direction. The house we stayed in was at the top of town with views to Mount Adams in Washington state to the north and Mount Hood, the tallest mountain in Oregon, to the south; magnificent both of them. I could live here…in the summer.
Our journey from Orem in Utah was a kaleidoscope of scenery, vast plains, vast forests and vast mountains. I didn’t rain on the three-day drive to Oregon which was just as well as the windshield wipers didn’t work. Hertz have two types of outlets; corporate where you can rent and return to different locations and franchise where you have to take the car back to the same place you hired it from. As you will correctly guess we were nowhere near a corporate outlet when the wipers failed, and it was a three-hour round-trip detour to Portland to get a replacement. We now have a Ford Explorer which is not a patch on the Chrysler Pacifica we started out with. On top of that the transmission is making some very strange noises, so we will be changing again when we get to Reno in Nevada.
In Reno we will be staying in a casino hotel. The last time I had that experience was in Las Vegas in 1979. In those days the town stretched a handful of blocks from the strip. Today it fills the whole basin. We worked out that if it looked like you were playing the slots you’d get free drinks and food, such was our impecunious existence back then. I did promise myself one pull of the handle at the $100 slots. As I walked towards the one empty seat the woman in the adjacent seat moved over to occupy it, so I sat in the seat she had vacated. One pull; jackpot! 100 silver dollars cascade out of the machine much to the consternation of aforementioned lady! I’ll see if I can pull the same trick in Reno!
Meanwhile in that other casino, you know which one I mean; the S&P 500 made all time highs pretty much every day in September, a month that historically has been the worst of the year. If the ETF flows from pension fund contributions, which are price insensitive, continue then so will the upward trend aided and abetted by heroic complacency in the bond market. The MOVE index that measures bond volatility has fallen from 139 in April to 69 currently. It fell to 36 in 2020 when the Fed was throwing money at the bond market and it seems everyone is betting on that happening again.
Same story with the VIX (proxy for S&P volatility). It is currently around 15 which puts the market firmly in the buying bucket assuming it stays below 19. It often bottoms as it creeps into single digits i.e. supreme complacency. We are not there yet there are still some bears in the woods; here’s one in Oregon!
I was gently berated for not mentioning silver last month. Silver! A precious metal and a commodity. The commodity cycle is at last showing signs of bottoming so silver and especially silver miners still have enormous upside potential. Oh, and platinum and palladium and not forgetting uranium too in case I get called out for not mentioning them either.
Back in Oregon autumn has arrived and it’s become very much like the UK; 50F outside and raining. We will shortly be packing up and handing the cats back to their owners and heading back to Salt Lake City where we fly to Mexico via Dallas for some serious sunshine. My next missive will come to you my dear readers from Playa del Carmen just south of Cancun.