The market was wrong this week, but the problems haven’t gone away and haven’t been solved. There are $9 trillion of them. I would rather listen to my algorithm than all the talking heads on the media.
There needs to be a new world order, that works. Monetary weapons and economic weapons are still weapons. Trade wars and threats have to be replaced by negotiations and a recognition that no one, including us, is as bad as they were or as good as they can be.
Isolationism is not the right path forward and us versus them is not the way. As long as the world stays on this path we are going to be dealing with increased market instability that is going to require new investment tools. Not the old ones I taught 20 years ago.
I am trying to learn about these new tools. So should you.
What everybody knows…doesn’t matter.
Unless the’re wrong.
and you are right.
Ask yourself, what does everybody know, that you disagree with?
Everybody knows the dice are loaded. Everybody rolls with their fingers crossed.
Everybody knows the war is over. Everybody knows the good guys lost.
On the 21st I was over 30% in cash and planning to stay there until after elections. Nothing that I learned in 10 years of graduate school or 50 years in this mashugana business would have gotten me back in the market. But then, an Algo I know, who has none of my fears and a lot more smarts than me, or the talking heads on TV, said: Go All in. She’s not right all the time, but better than me, is good enough for me.
If you can keep your wits about you while all others are losing theirs, and blaming you. . . . The world will be yours and everything in it, and more than this…..you may be…… an algorithm my friend.
Next years capital gains taxes will be high and I’ll cry all the way to the bank.
I am currently offered three ways to lose money:
- I can buy money market funds for an average of .07% return and lose principal due to inflation.
- I can buy bonds and lose money due to increases in interest rates.
- I can buy equities and lose money due to the recession that is forecasted because of Fed tightening.
As the song goes: you got to know when to walk away…know when to run. See you after the elections.
This absolutely bad financial environment we find ourselves in, is only temporary. In a war zone, like the Ukraine, being a wounded person is a relatively good thing, that is, relative to someone who is dead. But the next bullet may end your life and there is no place to hide. Stagflation is relatively better than recession or inflation but there is no place to hide your money. Cash is a sure loser but it beat China tech that is down over 50%. Yet, today, China tech is up more than US tech… for the moment.
This world today is not the same as we had in the past period of stagflation and what worked then may result in you’re getting wounded or killed this time. In the past, the buy and hold strategy worked well. I doubt that will be true in the future. What do you do when you don’t know where you are or where you are going and you have lost confidence in your leaders? The Fed is going to solve this? Congress is going to work together to solve this?
Innovation may be the answer. A new way. A new strategy. I don’t have the answer. But I do believe someone will come up with it. I heard someone recently that offered a glimmer of hope.
Warning! Stop sifting through the ashes of the past for the answer.
That was then, now it’s Algo.
We got an UP Flag. Remember that 70% sale on Wednesday? Back in the market on Thursday morning. I know, what about the taxes. Yes, I have a lot of short term capital gains to pay in April. What about the outbreak of war and Putin hinting at using nukes if America tries to stop him. Well…the AI program of Algodynamix doesn’t care about any of that. It also has no emotions, like Italian professors have, and it has no feelings you can hurt.