Gold is Money

So what’s the problem with gold? You don’t like it because it doesn’t keep pace with the $SPY? Are you fucking retarded? The market is a broad spectrum of risk and the one place inside of that market that has withstood the test of time, thousands of years, you take umbrage with.

Firstly, let me tell you now that I am not a “gold bug”. However, look at it and tell me how this is bad: NEW and FRESH highs.

We are currently presiding over the complete denigration of the national currency. People have tossed themselves into the $BTC mill and got themselves ground up in recent months. Meanwhile, assets from Ancient Rome are increasing in value on a daily basis.

I did some analysis on this subject and the best bet is inexorably the biggest company: $NEM. It has outpaced the price of gold and most of the other major minors. You could delve into the junior minors; but there is a risk reward dynamic at play there and why bother?

Dear Sirs,

I’d like to remind you that the Stocklabs mean reversion algorithms won again. You should also remember that before SL it was Exodus and before Exodus it was The PPT, all having the same mean reversion algorithm that has produced a rich and storied history of success in these halls.

Like all religions, it takes a little bit of faith to really believe in it and once you’ve seen miracle after miracle you grow accustomed to the trappings of unparalleled success and begin to condescend, and look down if you will, on those who are on the outside peering in.

The chart for the $IWM is wholly retarded and I don’t make any sense of it, other than to suggest $215 seems like an ideal place to hedge a little, take profits.

I made +206bps for the session, now within 2% of RECOURD highs.

Good day.

We had a big scare, but it’s over now and you’ll just need to live with this new paradigm. The wonderful crash days of a fortnight ago are long over and the semis, since then, have risen, in excess of 10%. We are now FLAT for August, as if nothing ever happened.

Let this be a lesson to you absolute morons: plumbing issues in the market that are not related to core fundamentals almost always resolve themselves. HOWEVER, this doesn’t mean semis are ‘cheap’, quite the contrary. We might soon run into a buzzsaw and drawdown after a nice run up.

Let me be clear: the bull is back, naturally, but in the event that it isn’t BE ON GUARD to short this fucker to zero. I hope you can appreciate my humble nature, giving thanks to the Gods and owing my fealty to the market winds that is never rooted in the hubris of my own grandiosity.

Good numbers out of $WMT, strong consumer data, solid $DE numbers and a confluence of events in recent days leads me to believe the bull, inexorably, is back. Now many of you knuckle dragging apes will take exception to my pristine line of thinking, mostly because you’re all bedraggled pavement dwellers and boozehounds. My mind is like a fine tuned Rolls Royce and you’re a Kia.

At any rate, the yen carry fiasco is fin and interest rates are coming in and we’re in an election year, so don’t expect a blow up. That comes later.

For the session, I am +215bps, fully long after doing some tax loss harvesting. Now that I’m getting back into money management I have to do these sort of things and behave less of a cowboy and more of a professional. The astute thing to do when sitting with a 7% loss in $MS is to sell it and buy $GS, if you know what I mean. If you don’t, well then, fuck off.

You’re probably keeping yourselves up late at night wondering how Stocklabs did during the recent foray lower, as markets panicked over Yen carry trade developments. I am pleased to report a flawless victory.

Average price for the $QQQ over the two day plunge is $441, 5% lower from current prices. Also there was an intra day 12mo OS that is not reflected in here that was quite literally the bottom of the current range.

The way is works is for you, the idiot, to sit there and let the mathematical models work. By the time you finish tour bag of Cheetos, the good folks at Stocklabs would’ve informed you, for the princely sum of $99 per mo, that the market had achieved a mean reversion level conducive with dip buying adventures, of the successful nature.

Enjoy these precise insights now while you can because when I get back into money management again, they will be less verbose.

I wanted to clarify my thoughts on the buying power of the dollar discussed in the previous post.

The purchasing power of money will always decline and that’s the nature of it. The only way to keep pace with inflation is to invest money into real estate, stocks, collectibles. The people who always get left behind are those without means to invest, stagnant wages barely keeping pace with the rise in prices. I hear people talk about solutions to this problem and pretending that Trump, somehow, will be able to fix it. He cannot.

The only way to reduce the price of things is through massive deflation. In order to achieve deflation, we’d need a Great Depression styled collapse in the banks and employment markets, creating a scarcity of money which in turn would increase the value of your money. The problem with periods of deflation is that people don’t have incomes to enjoy the cheap prices, akin to not having anywhere to go or drive during the COVID lockdowns to take advantage of the negative $36 crude prices.

If you want to fix the inflation problem the entire monetary system need to be uprooted and changed. The Fed would need to cease to exist and the dollar would need to be restructured and the ability to print greatly limited via backing it by assets and/or gold. Presently the dollar is a debenture, not really backed by anything other than the ‘full faith and credit’ of a corrupt government. You can see where this will eventually go; but we’re not going to willingly swallow these pills. The way prices will come down, eventually, will be through the destruction of markets, the global monetary system, and the government. The best hedges for this eventuality, which might take place during or after our lifetimes, is to own property, gold, $BTC.

If you’re still talking about inflation after all this time you’re retarded.

The issue Americans have isn’t inflation in the traditional sense, but the increase in cost for all things made inside the country, due to the buying power of the dollar lessening. In a sense you could call this ‘inflation’ but the narrative hawks will correct you with recent core inflation data and make you look stupid. If we’re not importing deflation into America, the costs of goods is running hot and has been for decades. Look at the price of homes, inflation, education, healthcare etc. On the contrary, look at the price of mall clothing or electronics: cheaper than the 1980s.

Why is that?

Because in most areas of the 3rd world the average salary is $600. You can see this type of dynamic taking place inside our own country, where people in NY and Cali make more than adjoining states and whenever they decide to sell their homes they run up the prices of wherever they’re migrating to. I see it here in Raleigh and I am sure people in Austin saw it there too.

In terms of investments, there isn’t anything in this tape that suggests input costs are overly prohibitive and we are on the verge of the Fed cutting rates. If you’re thinking about ‘inflation’ and how it’s ruining America, you’re looking at it wrong. It’s the buying power of the dollar and the suppressed cost of goods due to globalization that is the issue. All of the fiat currencies around the world have been shit for a very long time. The only way to look at money and the value of it is to compare it to something stable, like gold, which is +80% against the dollar over the past decade. In many ways Bitcoin is the new digital gold, but has issues with being oversaturated by people trying to get rich quick, whereas gold is now relegated to a boring store of value.

I quit money management back in 2016 (following 18yrs in the business), right before markets took off and generational wealth was created. Many of my colleagues went on to become zillionaires, managing ever increasing books of business thanks to good health and a strong market. Meanwhile I dicked around with websites and tweeted 30 times per day, but also created Stocklabs and traded very well for myself inside of a trading room with like minded gents, perhaps 1 or 2 ladies.

I do not have any regrets for the course I took, since all of my decisions are mostly deliberate and for a reason. When I quit in 2016, I absolutely hated the business, felt it was parasitic, and was disgusted by it. Looking back now I can honestly say I was caught in between industries, wanting a professional career whilst also juggling the anonymity of being an online personality and it caused friction. I had money so there wasn’t any impetus to keep one job over the other, so I opted for freedom and creating investment tools and resources for traders. I’ve always felt more at home amongst individual traders, less so with industry hacks who almost uniformly suck at trading and only care about the fees they’re paid.

Today I passed the regulatory exam that gets me back in the biz, should I choose. It wasn’t a hard exam, at least not for me, since I know this stuff like the hairs on my arm. My next step will be to get back in the biz, but on my terms. I do not intend to shut down Stocklabs and will still maintain an online presence, but perhaps there will be limitations to some of the content I provide. My entire life I’ve always wanted to be in money management. As a 10yr old boy I’d fantasize over it and play stock market games with my friends and I took to investment as a teen and always had a knack for it. Ever since I quit, I yearned to get back in and after my licenses expired after two years dormant, I figure that was that and the end of a chapter. But that isn’t true and in the beginning of 2024 I decided to retake the exam and get my licenses back, partly because I really missed being in the mix, but mostly to prove I can still do it.

Cheers to me, jog on.

Sort of a bullshit day, waste of time at the old exchange. Nevertheless, we are hopeful that BIG MOVES loom and we are also looking forward to major happenings across vast industries that will both shock and surprise. I am being particularly non descript as to avoid ruining the surprise. But rest assured, as sure we you’re stupid face is sitting there, a big fucking move looms.

I lost just 16bps today and quite frankly I am really sick and tired of posting Ls. I am comforted with the fact that I will trade great again, when crossed against a long enough time line.

Into tomorrow and the big move, I am 12% hedged with $TZA across a fully long portfolio of annoying positions that are, quite honestly, testing both my virtues and patience.

There are rallies in very specific areas of the market today:

Tankers
Dry Bulk
Oil Drillers
LNG
Uranium
Aluminum
Defense

But the moves are dispassionate and the entry of semis into the mix makes it convoluted. I am presently hedged with $TZA crossed against a fully long portfolio, off by 15bps. I am not bullish or bearish, simply looking at this slow tape and waiting for the next move.