Famed hedge fund investor and billionaire Bruce Kovner, said “the first rule of trading is don’t get caught in a situation where you can lose a great deal for a reason you don’t understand”.

I thought about that lesson several times this week because of the various ongoing international events listed below. We still do not fully understand how the events are going to impact the markets in the days to come, but remain prepared to react appropriately.

• Economic impact of borders being blockaded and shutting down commerce
• Iran getting yet another step closer to building a nuclear bomb
• Russia (pop. 144M) getting set to invade Ukraine (pop. 44M)
• The U.S. Consumer Price Index (inflation gauge) rose 7.5% year-over-year on Thursday, the highest print since 1982

We did participate a little in the relief rally that I had outlined a couple weeks ago. The portfolio is positive YTD and outperforming the Vanguard All-Equity Portfolio, VEQT, by a good margin.

We remain at elevated cash levels and heavily exposed to real assets; notably agricultural commodities, precious metals, and uranium. This is a play on inflation protection. The time to get aggressively bullish on equities will come, but not yet.