Why has Justin been so negative? He is obviously thinking that...

Why has Justin been so negative? He is obviously thinking that there will be a significant market correction.

I disagree with him. Our interest rates are too low to entice investors back to cash. The U.S. market is going gangbusters & only a significant rise in their interest rates could put a pause to that. If U.S. interest rates were to rise then the U.S. dollar would appreciate & our dollar would fall. That would be a benefit for our stock market.

If Trump succeeds in lowering U.S. tax rates to 20% then the U.S. stock market would continue to rise.

Justin's balanced long & short portfolio scenario works better when interest rates are high & the cash component produces good returns by way of interest.

As it is, ALF is not going to show any great improvement until Justin changes his thoughts on the market direction.
If he remains neutral then the only way he can make money is for a significant correction to occur after which he should then turn positive with the long portfolio significantly larger than the short portfolio.

I cannot see the Australian market having a severe correction in the near future.

I believe Justin should gradually tilt his portfolios towards being bullish & not be too preoccupied trying to protect shareholders' funds by being too negative.

The only positive about ALF at the moment is its discount to its net tangible assets.