I can boldly and flatly tell you here that I believe markets will crack asunder, very soon, and very fast, providing Wall Street with ample blood letting from the undistinguished advisory community, parasitic faineantise with vicious eyes and wet mouths.
Truth is, I’d be foretelling something that may or may not come true. We have our probabilities and our little models, systems that make us feel better at night — to make us think we have it all figured out. But it’s all bullshit. The winds of war and famine destroy almost everything over time and men resort to their most basic primal form, after the pageantry of enlightenment ends and morsels of food become scarce.
Your models and ideas mean nothing in real time when standard deviations blow out. Understand that? When something happens that has never happened before, all of your learned experience is valueless. You will need to depend upon instinct and disciplines to prevent falling into an endlessly deep crevasse.
Number one: invest in your business. Subscribe to great services like Briefing.com, RiskAlyze and of course Exodus.
If you need one and one guidance and value my opinions, book a Capstone appointment now (extra shill).
Don’t just sit there stupidly and faintly fading into irrelevancy. Some of you inherited better than average DNA, which allowed you to access the very best schools and set you on a solid career path. But you’re still not happy — because one can always do better, make more. Am I right?
The majority of you hail from ordinary DNA, blue collared parents who toiled and slaved over hot stoves, shoveled gruel into your gobs and signed you up for baseball and soccer, took you to Disney, and kept your spirits high, made you believe you too could become President.
(pause)
Both of you are here now reading, hoping for some insight into the never-ending quest for happiness. You think it’s found with success and more money. Those of you who have money know that’s not the case. Once you have the money, there’s always more to attain — things to buy, private jets to maintain.
I’m not a fucking psychologist and cannot make you feel better. But what I do know is behavior and mistakes people make when investing. Much of your unhappiness stems from the desire to get rich quick. You read about fuckers turning small sums into large and you want to replicate that. Well, I’ve read about people winning the lottery and I want to do that too. But it’s not going to happen. Get it into your thick skulls: you will never get the next Amazon or Netflix; but what you can find is consistency of returns, compounding over a life time that will grow your net worth over time to become substantial.
Got it?
Instead of trying to turn $100k into $1m over the next year, try to do it over the next 15 years — by measuring position sizes, diversification, constantly adjusting to market conditions, becoming a student and a teacher — humbling yourselves to the idea that the market is right and your job isn’t to counter it — but to follow it.
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Please Sir. Give it up! Where in the world did you come across the word ” faineantise”?
It’s just that I love learning new words; had to look that one up.
Fly owns a thesaurus.
A great big beautiful thesaurus. It’s wonderful.
https://ibankcoin.com/flyblog/2018/12/07/throw-back-ibankcoin-dictionary/
Needs a new entry
Another trader, Peter Brandt, said “Have strong opinions but hold them weakly.” It’s one of my favorite sayings.
While I think it is wise to be looking for a bear market at present it is also wise to ride the S&P to 3100 if that’s what it wants to do. I believe us to be very late in this bull and so am positioning net bear however, I always remind myself that neither me nor anyone else “knows” anything.
Peter Brandt is an asshat thats a terrible saying.
Not really. All it means is to have confidence in yourself but be willing to change your mind.
SHR1, ignoring that advice is how I lost money shorting oil in 2008. I’d add it in right up there with Fly’s post
Speaking of which, while I *expect* us to be down during this week, it wouldn’t shock me if SPY started tapping on the bottom of that trap Door.
We’ll probably hit the same resistance levels as Friday and turnaround, but maybe reverse the reversal, so you have to be agile if you are trading it.
Jsut remember that retail investors (“the public”) are the ones that crash or spike the market. The day-trading is Wall Street picking your pocket. Especailly on Fridays, they love to make you Zig and then they sudenly Zag, then you fold and then they Zig.
So it doesn’t matter if you think the economy is great or if you thinks stocks are vastly overvalued. What matters is what you think that the pubic thinks. In other words, predicting the winners of the beauty contest, not voting for them.
well said FLY!!
Wise words good Dr.
I have read IBC since it opened, those years around 2007 were tough trading for me. I am trying to learn day by day and get better. Watching and learning from the likes of the Dr has been a big help over the years!
Lastly, I dug this chart up from the Fed itself when researching, and I think it seems clear to me what’s likely to happen when the money from QE is sopped up in 2019:
https://fred.stlouisfed.org/graph/?g=HfT
Early on in the recovery, through most of the QE period, corporate profits matched federal deficits almost dollar for dollar.
QE was a program where the fed bought govt bonds from banks and paid for them with newly created reserves. It removed about 4T worth of bonds from the US and global markets, not a particularly large amount, but likely helped support asset prices somewhat.
Unwinding is just selling the bonds on the open market and giving the banks cash in lieu of reserves. Neither one is a big deal.
Scarcity
Auction function/pricing
Put perception
Very big deal.
Dad never took us to Disney
Your dad is a smart man.
You are like that crazy guy on my way to work holding up a “the end is near” sign. Pretty sure he is homeless or maybe he s Tyler from zerohedge. Face ripping rally coming in January. Mark this post.
well said FLY….. BUT I DO NOT BELIEVE IN YOUR DOOM AND GLOOM SCENARIO. With some time, the volatility should subside. Moreover, there is nothing nothing fundamental to sign up to the doom and gloom scenario. Both China and U.S. (Trump) will finally accomadate each other as they will understand that this could be a lose– lose situation for them. And Trump to realize this sooner than China as he has an election to win soon. Growth at say 2.5%??
STEADY AS SHE GOES.
The SPX dropped 600 from it’s highs to low, the Dow dropped 5500, the Nazz dropped 2000. I don’t see 2019 exceeding that.
The title of this post would have been a good question for 2018.
Happy New Year! Wishing everyone a Healthy & Prosperous 2019!
I like Fire and Hell.
No clue re: planning for 2019 except to say ready with energy services and small cap stocks through the first few days as tax loss for 2018 is gone and historically speaking this means they bounce bigly.
As for Disney (live in Orlando area) we had annual passes 20 years or so ago when the kids were little and got tired of the place rather quickly and now that we have grandkids….
China is going to build 20 automotive plants in the US. North and South Korea are going to unify, the UK is going to take up the Euro and throw out Brexit, Mexico is going to build a huge beautiful wall, Russia is going to blow itself up, and the entire planet is going to legalize marijuana. What, me worry? Happy New Years to all, and to all …. take a sabbatical in Rarotonga with nothing that has a battery in it. Cheers!