April 12, 2022
Look at this dire warning by Bloomberg:
Speculative equities that went straight up for years have fallen back to earth ... Russia's invasion of Ukraine sparked fears of a global energy crisis and raised the specter of stagflation. It all adds up to a remarkable coda to a two-year run that saw financial assets of all kinds soar as the Federal Reserve's pandemic response flooded the system with money.
The result: Gambler spirits have cooled
It's funny on multiple levels.
Just last night, I showed my daughters the 1982 movie Annie. Kind of ironic how the mega wealthy barron living large during the great depression, Mr. Warbucks, just happened to amass all his wealth selling weapons. It turns out that even in the worst economic crisis ever, poeple found ways to advance.
The following song, quite relevant to today's unfortunate situation, shows just how illogical the media is. Here is Annie and Mr. Warbucks having dinner with then president Franklin Delano Roosevelt.
Come one, really, a republican and a democrat eating together?
Granted, in order to gain traffic, likes, comments, and SERP ratings, you have to put added salt into just about every piece of copy. This article is no different.
But they have it all wrong. If the markets are going down, you can speculate on the downside. You can go long ETFs that move short. You can buy puts.
You can invest in the finest, safest bearish investment of all:
You can buy cash.
If you look at it one way, buying 100 shares of Microsoft (MSFT) is really selling the broker $30,000 and buying 100 shares from Bill Gates.
Flip the transaction and you are BUYING CASH for 100 shares of Microsoft.
It's a small nuance, but an important one. In a weak market, everyone says to hold cash. We don't like to hold. Nobody likes to hold. Holding is for couples during date night.
For investing, it says "do nothing, until."
It reminds me of something the all-time points leader once said:
Holding is seen as such a passive, nonaction.
Buying is another story. You buy dollars when you feel the value of what you hold is going to be worth less in the future. That way, for the same amount of dollars, you can buy more.
You BUY dollars becuase you beleive the value of the dollar is about to go up relative to the value of stocks.
That's a proactive approach based on continuing to grow your portfolio. That's why we long the dollar: To get back in at lower levels with more shares.
The right outlook make's it okay to be long in cash -- which is what I suppose a lot of these speculators are right now.
All right, let's get back to it. Let me see if I can find something worth reading. Here's one:Why Putin Won't Win
My friend in the IDF put it to me simply:
Usually armies will use the element of surprise to attack. Putin didn't do that. He put his troops into attack formation for DAYS for all the world to see.
He wanted to know how the western powers would retaliate against his aggression. The moment he understood that the farthest they would go was sanctions, he saw it as a green light from Washington.
People like Putin know force. Unless you use it, or show you are dead serious about using it, he won't stop."
Putin Won't Win? Someone needs to tell these people that he already did.
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