Don’t Know Why; Never Be Sure

Listen here, this afternoon I have heard every explanation for why we are selling off.

It’s Europe. It’s manufacturing. It’s Germany. It’s confidence. It’s unemployment. It’s government debt.

It’s dumb to pinpoint all the market action on whatever headline, rumor, or jackass on CNBC is being hyped at the moment…that’s what it is.

These people have no fucking clue why we’re selling off. Frankly, neither do I. I can guess it has something to do with all of the above, and I’m wise enough to guess it also has to do with a lot of information I don’t have.

There are always unseen and unknown things going on; saying we lost 20% in four days because “Europeans/Americans are dumb” is silly.

There’s a lot of potential shit hitting the fan here, and until we understand that better, it’s best to check your convictions at the door.

Watching oil markets the last few days, you would have the thought the worst was behind us. Surely the manufacturing reports couldn’t be that bad, with oil prices being pushed higher? Must be some production demand in there, right?

Wrong. That report sucked horse cock.

But thankfully, even though I thought maybe we start to correct from here (and we may yet), I didn’t trust myself. Not after the last two weeks, I wanted to see a real sell off first, even if that meant I covered my hedge for a loss.

And I got one.

When Europe comes out in a few hours and starts saying “Ey, looky hear, we’ve fixed the problem,” (all Europeans are Swedish), rejoice, but don’t celebrate by buying champagne. Because they don’t necessarily know what the fuck is going on either. And they may not fix the problem at all. Or fix the wrong problem.

And above all, ignore the sulky voices on television. The moment we start to correct, these same people will be bouncing off the walls talking about what “made” the market go higher, even though right now they’re hiding under their desks.

No joke, I have witnessed with my own eyes as these tots have painted two very different market outcomes on the same cause.

Headline: “Markets are higher thanks to lower energy costs”

Markets reverse.

Headline: “Markets are lower with energy as confidence dries up”

Energy reverses higher.

Headline: “Higher energy costs drive markets lower.”

All of this could take place within a matter of hours. Sometimes, they leave the headline and just change a word.

It’s a game to these people, because they are children who have no clue what the hell is happening. Listen for their data, but ignore their input and analysis. Correlations are meaningless without causality, but causality divined from correlations are also usually wrong.

It takes wit to determine true relationships, and a grounded philosophy to understand that events will challenge those and render them wrong. The people on television barking out their assessments don’t have it.

You can use them as extensions of your eyes and ears. Learn to train yourself to cut through their bullshit and get to the kernels of data you can actually use. Discard the rest.

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