Firstly, let me thank you for your ongoing support with Novus Black as we complete our 21st month of trading. It’s safe to say that 2023 has not started with the big bang we’d hoped for, and while we all understand that investment has its periods of slow going, we realise that the results we’ve seen so far are not what we have all come to expect. May has ended with 1.9% on the board, which has meant all investors have received a small amount of ROI with the upgrade of all accounts to a 30% profit share model. 1.9% is a slightly disappointing result, no doubt, but we must hold our heads high, knowing we have yet to have a losing month. According to many leading hedge funds and financial resources, May has been one of the most challenging financial months on record. Many funds have recorded little to no earnings, and a few have reported losses – an indicator of troubled markets in particularly unusual times.
The reason for the uncertainty lies in the turbulent state of the US economy, which has seen a vast rotation of capital from bond markets, supported by the Government, into alternative avenues, in the wake of the Debt Ceiling struggles. For those unaware, the US government was given until June 1st to structure a deal that allowed them to raise the ceiling on the country’s borrowing or face financial default and, naturally, economic catastrophe. In the lead-up to this date, a default was a possibility, which could have spelt a financial market crash, particularly following the critical events in the country’s banking sector just two months prior.
With confidence dwindling in Biden’s ability to construct a meaningful deal with Congress, major institutions and hedge funds began liquidating assets in Government backed bonds and began rotating their funds to company stocks, propping up DOWJONES, S&P500 and NASDAQ. In addition, after the banking crisis earlier in the year, Institutions were allowed the use of Federal Reserve loans within a discount window – an option introduced in the 90’s as a failsafe for the US economy – which meant they could inject capital into the market and pay a discounted loan repayment rate for 30 days. This discount window ended on May 20th, yet the US markets continued to be pumped up with institutional funds as they eeked out profit taking from “pump and park” strategies, meaning the Indices market became bloated and overbought.
As this phenomenon evolved, Novus Black decided to start taking on sell positions as the Indices market grew more and more overbought. In the expectation that the market would reverse at the end of the Fed Discount Window, we watched and waited for what has now been called the latest “Tech Bubble” to burst, following exactly the same pattern as the 2001 markets. This, unfortunately, did not happen due to the debt ceiling talks continuing into the very end of the month and, thus, we could not capitalise on the positions we had taken within the expected time scale of May.
However, we have now begun June. Within the first week of trading, we sit at 1.7% profit with only the earliest signs that the market is beginning to turn in our direction. Last May, we hit 17.6% profit and, at that time, there was a 30% chance of market reversal. We are now at a 96% chance of market reversal, with the downfall expected to sell down 35% of the market. In other words, should the markets continue as expected, we may be looking at a very healthy return for June. That having been said, it is still early days and we can not promise anything, but only continue to apply our experience and knowledge of the markets and act accordingly and cautiously.
One thing that has been made clear by May’s performance is Novus Black’s need to revisit the markets we focus on. As institutional investors look away from the US Indices market amidst macroeconomic uncertainty and potential reversal, we expect the FX markets to return to a period of volatility and expected technical patterns after a prolonged drought. As such, whilst our existing US trades are allowed to play out, we will be increasing our focus on major currency markets, broadening our scope of profitability. As such, we are confident that with a change in tactic, we can return to the higher profits we have seen in earlier months and meet our clients’ expectations. However, as always, it is the early days of a new month so anything could happen.
We will continue to keep you updated throughout the month.
Monaco News
Late into May, we had the honour of being invited to spend time in Monaco by Royal Yachts to attend some very positive meetings with potential institutional clients. These meetings could provide substantial capital injections into the Fund that would not only fortify the Fund’s position as a leading force in the Alternative Investments market but also provide additional capital protection to all of our valued clients through the facilitation of the much-anticipated war chest. These talks are still in their early stages, but we hope to have more to share with the group soon.
Novus Black Helps Realise Investor’s Dream
Novus Black was designed to be a sustainable investment product where clients could commit capital, knowing that the compounding growth over a couple of years could provide the opportunity to re-invest and, in some cases, realise entrepreneurial dreams.
One such dream was recently realised thanks to the profits that Novus Black has created for one of our clients: Manny.
Manny has now been able to open his first restaurant called Posh Tatoes. Set in the heart of Brixton, Posh Tatoes provides a modern twist to the humble jacket potato and gives its diners a fabulous upmarket culinary experience.
I am sure you will join us in wishing him good luck with his new venture.
View Posh Tatoes
Should you have any questions regarding any of the points in this update, please feel free to email us at info@novusblack.co.uk, or phone us on 020 8187 8287.
We would like to sincerely thank you for your ongoing support with Novus Black and look forward to a prosperous future.
