I've missed alot of alpha by caring. I'm learning to read crowds and quantify capital inflows into specific assets now.
There is an unlimited amount of money for a limited amount of things to buy. In some markets it remains discerning such that there will never be an unlimited amount of things to buy because none of that money is ever going to pay attention to certain people. In other markets it is less discerning but there is a more limited amount of capital.
You can always push a project or company to do more valuable things after it is capitalized, far away from the original mission.
> I'm learning to read crowds and quantify capital inflows into specific assets now.
It is true that this is sometimes the necessary skill for making money in markets. Right now we are in a super risk on environment.
But you also have to know how to see the writing on the wall and move back to a defensive position when the market rotates and fundamentals become important again. It is just as bad to be caught offsides here. Despite what may be popular wisdom these days, major indexes have down decades all the time.
This blog post has some interesting insight on the topic based on Neil Gaiman's Sandman:
Zero animosity intended. But ever since I started buying bitcoin after the financial crisis, I find any talk about markets so like that of a priesthood. Oh, god whispered what in your ear? Markets will rotate, fundamentals and speculation move in cycles…I see the patterns of Powell child, give a tithe…I know you’re well intentioned but I pretty much see 99% of all financial talk as nonsense guessing now. In my opinion there are a few people who really know, and they work for specific firms doing specific work, mostly in high frequency market making. Everyone else is very clearly winging it.
Nothing has changed. Why exactly will the economy support higher interest rates?
Might as well ignore Powell.
>Oh, god whispered what in your ear? Markets will rotate, fundamentals and speculation move in cycles…I see the patterns of Powell child, give a tithe…
From my perspective that is true but only in the current system and not because it's certain, it's because the system doesn't even work. What's worse is that e.g. Bitcoin isn't even an alternative, it's just the same system but more aggressive. It's like someone understood that the gold standard has always been a lie and now they take the option of lying out, completely ignoring that there were good reasons for those lies.
When currencies fail, people just try the old system again with predictable outcomes. No wonder people start believing in the certainty of market cycles.
It's entirely plausible that all of this will be over with a different system, perhaps for thousands of years just like in ancient Egypt.
Precious metal currencies have a track record of failure spanning millennia, somehow the Egyptians with their primitive grain money figured out something we didn't as their financial systems survived for thousands of years without crisis. Fiat is slightly different, in the sense that the rules are arbitrary and therefore could be written in a way that emulates the success of ancient Egypt.
Oh yes all is well within my risk tolerance, Jerome Powell may flirt with tapering but the central banks are going to continue injecting hundreds of billions in liquidity per month, and the reality is that it goes somewhere!
Even if it pools at the top, those guys are playing a game of making it grow faster than the central bank dilutes the supply, which is who this article is about
Or the ones who believe its all very liquid...And they can exit on time. That trading will not be frozen for the "stability of the market" just to open much at the bottom of the deepest oceanic trenches...
The stock market is quite liquid. Why would people bother timing anything? If you feel that the market will move in a given direction within a given time period buy/sell options to cover your positions.
Nothing in this world is 100% safe. I personally believe in having layers of financial preparedness. Some cash and coin at home if ATM's go offline or get over ran, likelihood is low but could happen. 6-12 months of cash in a savings account a credit union for emergencies because life happens. HSA cause stuff breaks the more you age. Retirement IRA where I buy/sell stocks and options. Non retirement account where I do more buy and hold due to taxes. And an online crypto account with half of my crypto holdings, the other half is on a crypto ledger nano s which sits in a safe. https://shop.ledger.com/products/ledger-nano-s. Damn it they now have them in colors, that is cool. Regardless don't put all your eggs in one basket.
There is an unlimited amount of money for a limited amount of things to buy. In some markets it remains discerning such that there will never be an unlimited amount of things to buy because none of that money is ever going to pay attention to certain people. In other markets it is less discerning but there is a more limited amount of capital.
You can always push a project or company to do more valuable things after it is capitalized, far away from the original mission.
"I saw their plan, and my dad's plan was better"