Not completely because of oil.
But it’s going to play a part.
TF You Talking About?
Times change. We at the 10-Minute Contrarian investing podcast are aware of this.
We can’t get caught up in the crazy alpha we have given ourselves up until this point.
There will come a time to cash out, and hopefully make enough money to where we can live off of our passive income streams.
How great would that be, seriously?
The formula for me is simple.
- Make a bunch of money off of my contrarian investments while the world burns
- Take profits along the way and bank more USD
- Re-deploy half of that USD into things that make me passive income with very little risk or effort
- Date 25-year-old Latinas well into my 50s because I’m so rich and swaggy
But the “very little risk or effort” part is a big one, because passive income need not involve either one of those two things.
For example, you can earn 5.5% on your USD right now through the US treasury. About as good and safe as it gets.
But this interest rate won’t be around for much longer, especially when everything tanks.
And as I have stated many times on the podcast, it could tank and stay down for years before we see recovery.
So where will I be looking to redeploy my funds BEFORE everyone else starts doing the same?
I have some ideas.
The Evolution
Yes, there will come a day when we will all need to not only take profit, but likely close down completely our uranium stocks, gold/silver mining stocks, and certain blockchain projects (keeping most of my BTC however)
We will then rotate into things which make more sense for the time.
If the recessions ends quickly, things like copper, base metals, energy, and big board stocks(!) will become the new frontier believe it or not.
But that’s only where I plan on putting half of my money.
And the recession may last for awhile.
So I’m looking for low risk and low effort passives.
By low risk, I mean NOT the next Celsius or BlockFi, for example.
By low effort, I mean NOT real estate, for example.
There are better alternatives, alternatives which are also very appropriate for the time.
Which Countries Am I Looking At?
Mainly the US.
I get accused for being a homer sometimes.
But it’s not my fault my home country has almost all of the money, the best geography for making money, and is poised to come out of the upcoming recession faster than anywhere else.
You can gamble on the next Singapore (which nobody saw coming btw). I’m taking the bird in the hand.
I will be watching places like India and Uzbekistan closely, along with a lot of Southeast Asia, but hopefully at this point in my investing career, I will need to gamble a lot less.
But settle down nationalists, some of the companies we’ll be talking about here are in fact non-US.
So Which Sectors?
Energy and (if we are coming out of a recession) big miners.
First of all, it makes sense to invest in those companies anyway, ESPECIALLY when we’re back on the upturn.
But the big bad cherry on top?
These companies pay SICK DIVIDENDS too!
It’s the best of everything. There is no better passive income out there if you can do this correctly.
Dividends are great, but if your stocks are tanking then who cares?
As long as you’re investing in established companies who are producing what the world needs, you will be a lot better off in the long run.
And energy producers, and big miners just happen to be famous for rewarding their shareholders at a very high and very consistent rate.
For example, a dividend yield of 3% is considered good for a US big board stock.
Let’s see what some of these companies are giving their shareholders right now.
BonkerTown
You can go to any free stock screener or simply go to Yahoo Finance and do this yourself, but let’s see what we have here.
These are mid to large cap only to reduce risk (2B market cap and up) with their current dividend yields.
Oil Companies:
Chevron (CVX) – 4.04%
Suncor (SU) – 4.76%
BP (BP) – 4.88%
Let’s crank it up a bit…
Hess Midstream LP (HESM) – 7.47%
Kinetik Holdings (KNTK) – 8.93%
USA Compression Partners (USAC) – 8.55%
And get ready for this one…
Petrobras (PBR) – 17.55%
Petrobras is a shining beacon in the sky, in a country (Brazil) who does a lot of things wrong. I would absolutely invest in it.
And yes, I know, dividend rates change, often. You can simply go to Yahoo Finance, click on “history”, and go look to see what their dividend history has been for as far back as you want to go.
During recessions, oil prices often drop, but not for long. I want to be there to catch it, because I know it won’t be long before the world wakes up.
Also, the ridiculous ESG movement won’t be there to ruin the party this time.
But that takes us to renewables.
Yes, renewables will be a big deal in the future.
Why? Because we’re really really going to need them.
And it just so happens, when it comes to dividends, they pay out the ass too.
One of my favorites is NextEra
NextEra Energy Partners (NEP) – 12.79%
Big Miners
Never EVER sleep on these companies.
You’re a fake-ass contrarian investor if you do. Go buy Shiba Inu.
Just look at what these guys like to give you as well.
BHP Group Ltd (BHP) – 5.32%
Rio Tinto (RIO) – 6.80%
Glencore (GLNCY) – 11.09%
Vale (VALE) – 13.18%
So imagine being invested in companies the world is going to rely on anyway, and making enough money through dividends to where you can either reinvest them and earn even more, or simply use them to pay all of your expenses.
Here is a good dividend primer for those just getting started. Yes, there is a lot more that goes into them, not just yield, but we’ll get more into that well into the future. For now, enjoy the video, and I will provide commentary below.
For starters, a very misleading title, you’ll see soon.
0:00 – Warren Buffet is the biggest market manipulator of all time, but damned if his simple advice doesn’t make all the sense in the world.
0:43 – Very interesting stat. Just goes to show how big these things are, and how rich people leverage them.
1:30 – LOL, yall remember when whiteboard videos were all the rage? They’re damn helpful, I will say that.
4:35 – Of course, oil and big miners isn’t all I will be investing in. The opportunity there is great however. There are also some really good dividend ETFs out there too, on the lower end of the risk curve. Time and a place however.
5:24 – “Our favorite holding period is forever”. Kinda true. What if (apart from proper profit taking early on) you never ever touched your crypto? Where would it be now? If you’re savvy enough you can rotate with common sense, but apart from that, play the long game.
11:52 – More Buffet fire – “The Stock Market is designed to transfer money from the active to the patient”. Same with any market. Check amongst yourselves.
15:30 – Okay, this is stupid. You are not going to generate 12% a month in dividends without taking on way too much risk. This is not realistic IMO. Don’t make all this money now just so you can donk it away later.
16:10 – Anyone got $440,000 laying around? Probably not. But might you once these contrarian investments run their course? This is what our blog post today is all about.
Learning about dividend investing is boring right now while crypto is mooning and we’re positioning ourselves for our stocks to do the same. But learning it now as opposed to later should pay off big, as you won’t be scrambling and making all of your dumb mistakes at precisely the time we’re trying to set ourselves up for early retirement.
Conclusion
We’re all a bunch of crypto-chasing fuckboys right now, and that’s great.
But why are we doing it? Who do we want to become later on?
Don’t figure out your endgame on the fly.
Get ahead of it — whatever that endgame is.
— VP