Weekend Update …

Reviewing, the Climate Tech Model pointed to hedging aggressively in the January 23 to 29^th time frame and then lifting hedges last Thursday. The Aggregate Model construction is now:

1.      27 % long Climate/Environment stocks, EV, Battery, Solar, and Biotech.

2.      35 % long Tech, software, and AI stocks

3.      8 % long Bonds

4.      27 % long S&P indexes, finance, and commodity (SOYB) ETF’s

5.      3 % reserves.

You will note the model has no signals in the pure consumer area as it shows a high probability that a consumer recession, slowing employment, and lower interest rates period will coincide with the filling of the AI Tech bubble and a Midwest drought.

In a larger sense, long signals in the Climate/Environment sector are based on the input that the environment, not government pronouncements, drive alternative energy investment.

And a sub-note, now that battery technology is the growing practical area for night-time alternative energy use, the sharp decline of wind turbines vs solar is accelerating. Plus, what my late father/farmer always said about all the old windmills in rural areas, “the bearings always wear out or they get blown down”.