David Hay 4.5 17 ideas

Hay points out that while gold/silver prices have soared, miner shares outstanding are dropping (investor disinterest) and prices haven't fully caught up. He specifically praises First Majestic (AG) and Dolly Varden (DOLLF). Higher metal prices will lead to an explosion in miner earnings. The disconnect between record metal prices and lagging miner equity prices creates a deep value opportunity. LONG Gold and Silver Miners (Senior and Junior). Rising input costs (energy/labor) eating into mining margins despite higher metal prices.

Hay argues that long-term US Treasuries are losing reserve status and face supply issues, but short-term T-bills are a valid "safe haven." In a volatile "Fourth Turning" environment, cash safety is paramount. Short duration avoids the duration risk of long bonds while providing yield. LONG Short-Term Treasuries (Cash equivalents). Reinvestment risk if rates are cut aggressively.

Hay notes that Chinese stocks have corrected and valuations are extremely low (KWEB average PE is ~14, cheaper than US utilities). He explicitly mentions BYD (BYDDY) as attractive. As the "American Exceptionalism" trade unwinds, capital seeks undervalued jurisdictions. China has already experienced its bear market, creating a favorable risk/reward entry compared to the frothy US market. LONG Chinese indices and specific tech/EV leaders. Geopolitical tensions or renewed regulatory crackdowns in China.

Hay notes that Amazon is trading around 22x earnings, which is significantly cheaper than the "value" stocks (WMT/LLY) mentioned above. Relative value arbitrage. If one must hold US large caps, Amazon offers better growth-adjusted value than the over-crowded defensive sectors. LONG Amazon (specifically as a pair trade against Short Value). Consumer spending slowdown affecting retail margins.

Hay observes that the Japanese (EWJ) and South Korean (EWY) markets are "going vertical" and look like meme stocks. While he likes international markets generally, these specific indices are technically overextended and chasing them now is dangerous. AVOID or take profits; wait for a correction. The momentum trade continues longer than rational (melt-up).

Hay highlights that "boring" value stocks like Walmart, Eli Lilly, Caterpillar, and Deere are trading at 30-40x earnings or high price-to-sales ratios. Investors fleeing tech volatility have crowded into these "safe" names, paradoxically turning them into the most overvalued sector of the market. They are priced for perfection in a slowing economy. SHORT or AVOID these specific "expensive value" names. Continued "flight to safety" flows keeping valuations elevated regardless of fundamentals.

Hay explicitly names Brazil (EWZ) as one of his "favorite markets" and notes it has been a top performer in his newsletter's trading alerts. Brazil benefits from the "hard asset" rotation (commodity exporter) and low valuations relative to the US, fitting the thesis of international diversification. LONG Brazil via ETF. Currency volatility (BRL) or political instability in Brazil.