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The One Chart That Will Decide 2021

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  • We use data from multiple sources to make investment decisions.
  • But the spread in this chart, is almost off, the charts.
  • What will this do and why it is important.

This is it. This is the chart that will influence 2021 to a great extent.

Copper-Gold Ratio Breaks From Treasury Yields in New Normal - Bloomberg

It shows the 10 year Treasury yield alongside the ratio of copper prices to gold prices. The two lines always seem to catch up to each other and we expect the same this time. But who will move and what will the consequences be?

What Will Cause Alignment?

The two lines can meet in 3 independent ways.

1) Treasury yields can rise to 1.75%.

2) Copper prices can fall to $2.50/pound from the current levels near $3.50/pound.

3) Gold Prices can rise to $2,400/ounce. 

Of course 2 or all 3 of these factors could move to a lesser extent and determine the outcome. 


1) If you expect the first outcome, then ETFs like  iShares 20+ Year Treasury Bond ETF (TLT) would be extremely vulnerable. Your entire bond portfolio would get whacked. REITs and Utilities would stand up and take notice as well. A move of that magnitude could likely tank growth stocks as well. 

2) Freeport-McMoRan Inc (FCX) would likely be one of the most vulnerable stocks for outcome two. FCX is a major copper producers and trades at the highest distance above its 40 week moving average that it has ever achieved. 

Downside catchup could be really brutal. 

3) Finally, SPDR Gold Trust ETF (GLD) or even iShares Silver Trust ETF (SLV), could really move up in the third outcome. 

Whichever this resolves, we guarantee there will be some big turmoil involved. We remain defensively positioned and are aiming to make strong annual yields by only selling cash secured puts and covered calls at very favorable strikes. All our plays target stocks we want to own and at prices we would love to own them at.

Source: CIP Cash Secured Put Portfolio December 19, 2020

The median portfolio stock is currently more than 15% above the strike prices we sold the options for and that gives us a strong buffer in case of a quick market decline. One other aspect of our portfolio is that every month approximately 20% of our options expire, so a market decline helps us obtain better premiums and prices for deploying new positions. 

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If you have wanted to try out a value conscious and risk-managed, service, this is your last chance to do so at current prices. 

Conservative Income Portfolio

We launched this as the risks for low returns are getting exceptionally high, just as investors pile into growth and passive market tracking investments. We have designed these portfolios to reduce beta and enhance yields. By joining,

  • You will get exclusive access to a cash generating portfolio of Cash Secured Puts and Covered Calls, designed to have a lower volatility than the market. Each trade will have a risk ranking generated from a composite of 4 measures.
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Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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