Just Enjoy Your Money

The problem with markets – all markets – right now is an issue of benchmarking.

Thanks to Central Bank shindiggery™ all basic risk measures have been and will continue to be thrown off. Case in point; US treasuries.

Now, on an annualized “blah blah” return compared to stock “dewdiggory”, well stocks are looking pretty cheap right now, I will tell you what!

And those commodities; why gold’s “shimsham” ratio is set to send that metal running at least four and fish fathoms past their 2001 “cerflunket”.

…

I understand, you think I’m crazy. And I am, sincerely. But please know the fact that such metrics are absolutely meaningless, because the things that define them are being distorted.

Now, sure, stocks are real cheap compared to bonds, particularly that golden standard the US Treasury. But don’t confuse that with thinking stocks are cheap. I expect having your hand lopped off beats having wolverines devouring your entire arm, but fuck me if you would choose either of those willfully.

That’s the market right now; you can pick to have your eyes eaten out by rabid badgers, or your intestines perforated by javelins. How is that a choice?

Globally, we continue to see demand getting crushed, from everything from energy to raw goods, with inventory and basic replacement stepping in now and again to force demand. Sales by and large have continued to fall, and people are getting all hyped up on “better than expected” earnings.

Great. Awesome. Except that the contraction hasn’t finished yet. Demand is still falling, so your forward guidance is still dropping. Dropping less than expected, whatever that means, is still dropping. Corporate balance sheets are largely offsetting this by deep cuts in employment, and you can’t do that forever.

And meanwhile, you’re adding in to equity near all-time highs. Why?

Well because the other option is to add into bonds of sovereign entities run by deranged idiots that are levered 100% to their annual gross domestic product. And that means either subjecting yourself to near imminent defaults of less than 2 years away, or risking slightly less imminent defaults of 2-5 years away.

Oh, or you can load up on commodities – like oil; which has experienced a 20+ million inventory build in less than a month, largely from plummeting demand…the same demand that is affecting corporate forward guidance.

So, your investment options seem to consist of buying shrinking businesses, unneeded commodities, or investing in over levered, incompetently run governments, all for record high risk premiums naturally.

Oh, or you could keep in cash. Which will all but definitely be devalued from here on as the aforementioned problems continue to manifest themselves.

Now, some of us are choosing to chase returns in very specialized cases. We are destined to see bipolar mood swings from cash, commodities, equities, bonds,…each will be temporarily crowned as the “golden safety play” OVER AND OVER AGAIN. And if you’re patient, there will continue to be the means to make boat loads of soon-to-be-worthless cotton slips over the next two to three years.

But honestly, all of these investment options kind of suck. The real opportunity will reside with private money and start up companies, because all publicly available investment options continue to see such rough competition and overbidding.

So if you’re unsure of yourself, or don’t have the skill/patience/risk tolerance to try and play the volatility while knowingly betting your fingers, let me offer you a better choice. Just spend your fucking money. Diversify what you need across all the above allocations. And otherwise, enjoy yourself. Because we’re all about to take a taste of peas, here.

If you enjoy the content at iBankCoin, please follow us on Twitter