Perhaps it IS different this time

[jonnyfrank]

While one could argue that this post could be in "Out of the Box Thinking", I am going to post it here.

I am beginning to lean into the fear camp, because what I read and the trend I am seeing are leading me to believe that the PTB are going to be patient and run everything into the ground so as to wipe out the middle class/commoner. I am thinking they are going to check their greed at the door for far longer than usual and not support another rally before everything goes to complete hyper disaster mode. When you have all of the manipulation of markets AND data becoming a reality (and the IRS ramping up with an FBI and DOJ that no longer hides their political bias), it sure smells like one big pig fest to me.

Go ahead and give it your best shot to convince me that a complete market short (bonds and stocks) is NOT the way to go. If there was ever a perfect storm that can bring us there, I don't recall it in my time. There is a flock of swans circling, and they are not white. The EU seems to really be on the brink of collapse, and the Ukraine war is looking to get uglier, with the beta western "leaders" doing nothing but holding their sissy pinkies up even higher as they sip their tea cups of warm soy milk, with nary a mention of diplomacy or peace talks. This all smells really, really bad. I never thought I would say it, but perhaps the Russians dropping a tactical nuke on any country ready to sign up with NATO would be enough to make the PTB realize that parched earth has no value.

And let's face it--as good as the TI newsletter and approach has been how potent can it be if the information it relies on is now polluted with bias, misinformation, and deception. I love the idea of the indicators, but if the sources are now manipulated then man oh man, all we seem to have is "the long term trend is our friend". But what good is knowing the long term if in the short and medium term you are left with little to harvest the long term trend?

I am posting this to shake up the thinking here. This is not directed at the quality of TI or the fact that all of our crystal balls have a massive crack in them. I am simply curious of what everyone is thinking of what is transpiring and what they are embracing.

[zipsaw]

Sol always states have a plan B & C.
I am not arguing against your idea of this time is different. I am not arguing for it either.
My plan B is to wait this out, and work on taking wealth from other investments.
Should this get really bad I have lots to barter. That is plan C. What do people need? Alcohol, fresh ground flower from wheat berries or bread. This is very healthy bread not the store bought shit.
I am out of debt and know how to garden, I know how to preserve food with and without electricity. I can heat my house with very little wood.
I can always restart investing once the “this time its different” is concluded. I am in better shape then 95% of Americans and will be able to weather “this time is different”.

My biggest concern is the CBDC that sounds like it will come into play second quarter next year. (Fed stated it in a written release. Please feel free to look it up.) Is the CBDC the catalyst behind the PTB tanking the economy? How will they get cash out of the system? What happens if you do not turn in cash? What happens to bank accounts, trading accounts and banks. Maybe I am reading too much into this. Maybe the CBDC is for higher strata of wealth then I will ever be in. I don’t know. It is the I don’t know that concerns me.

I was reviewing my trading journal about a week ago found some negative thoughts, one recurring one was “I feel like gods bitch.” So I did some meditating and decided to put on my big boy pants and figured out how to change my testicles into brass balls. I am not quite there yet but while I was walking today I think I may have heard a clicking sound emanating from my nether region.
The universe has blessed me with a very good life. Some people would look at it and say your life sucks. It depends on your goals wants and needs. What I am trying to say is, if it is different this time, you can not change it. You have to change or go insane. Life gets a lot easier when you say “Fuck it”

One other thing, at age 60 I was fired from a job for not taking the clot shot. 3 years from a pension. I lost 8 years of social security earnings (State job). I have now dropped out. I spend very little money. Restaurants, expensive vacations and many nice to haves are gone. I do not even miss them. The toxic morons I used to work with are also gone.
I like walking in the woods and playing with my dog. I like spending time with my my wife. I have actually (in my opinion) raised my standard of living by losing income. I will make it because I really proved I can say “Fuck it”.
Click, click, click. Maybe they are brass now.

[djanderle]

Zipsaw,

You are doing it just fine. On your own time and schedule. I bet its gratifying to give the middle finger to the organizations that were tying you down. I wish I could be at your point in Life....Freedom!!!

[symbios]

My 2 cents on this is that if the PTB wants to wipe out the middle class, it wouldn’t be done in this manner. This slow, orderly decline with the media blasting “we are in trouble” manner of wiping out the middle class is not the most efficient way to do it. If it has to be done, it has to be in multiple phases.

First, market euphoria, every other man starts investing their life savings into the market. Next, a period of continued outperformance to capture any stragglers. Then we will see a sudden collapse of the markets with majority of middle class caught within. It has to be fast and furious, giving them no time to think and contemplate on pulling out their money. I have seen it done this way in the crypto markets. LUNA for example doesn’t give much time for people to react before it’s spectacular collapse.

[SOL]

Sol always states have a plan B & C.
I am not arguing against your idea of this time is different. I am not arguing for it either.
My plan B is to wait this out, and work on taking wealth from other investments.
Should this get really bad I have lots to barter. That is plan C. What do people need? Alcohol, fresh ground flower from wheat berries or bread. This is very healthy bread not the store bought shit.
I am out of debt and know how to garden, I know how to preserve food with and without electricity. I can heat my house with very little wood.
I can always restart investing once the “this time its different” is concluded. I am in better shape then 95% of Americans and will be able to weather “this time is different”.

My biggest concern is the CBDC that sounds like it will come into play second quarter next year. (Fed stated it in a written release. Please feel free to look it up.) Is the CBDC the catalyst behind the PTB tanking the economy? How will they get cash out of the system? What happens if you do not turn in cash? What happens to bank accounts, trading accounts and banks. Maybe I am reading too much into this. Maybe the CBDC is for higher strata of wealth then I will ever be in. I don’t know. It is the I don’t know that concerns me.

I was reviewing my trading journal about a week ago found some negative thoughts, one recurring one was “I feel like gods bitch.” So I did some meditating and decided to put on my big boy pants and figured out how to change my testicles into brass balls. I am not quite there yet but while I was walking today I think I may have heard a clicking sound emanating from my nether region.
The universe has blessed me with a very good life. Some people would look at it and say your life sucks. It depends on your goals wants and needs. What I am trying to say is, if it is different this time, you can not change it. You have to change or go insane. Life gets a lot easier when you say “Fuck it”

One other thing, at age 60 I was fired from a job for not taking the clot shot. 3 years from a pension. I lost 8 years of social security earnings (State job). I have now dropped out. I spend very little money. Restaurants, expensive vacations and many nice to haves are gone. I do not even miss them. The toxic morons I used to work with are also gone.
I like walking in the woods and playing with my dog. I like spending time with my my wife. I have actually (in my opinion) raised my standard of living by losing income. I will make it because I really proved I can say “Fuck it”.
Click, click, click. Maybe they are brass now.

What you have done is incredible, to say the least. My hat off to your, sir. Any chance to sue the company for doing what they did. One other thing that many individuals I know have to do after seeing many of us TI take that route is to use the PPP (purchasing power parity) factor to one's advantage. However, to do this one has to be open-minded, have nuts of steel and be willing to adapt to new places and let's not forget to give up the ability to be easily in touch with old friends and family. The idea if you have some income is to move to areas where your PP (purchasing power is 3 to 4X more if you do a bit of work, you could push it up even more). So some people have only one home; they rent this home and move to, say, Vietnam. The home should be fully paid off or have a small mortgage. Here is an example one family did this, and the remaining mortgage on their home amounts to less than 500 a month. They rented the place for 2500. 2000 in Vietnam, for example, could equate to as much as 8K in PP. Other options are individuals that have the option to work remotely so they can relocate to lower-priced areas. The idea could be short-term or long-term.

[SOL]

General reply to Zipwsaw and DJanderle


I remember, and I this is mentioned this briefly in the next update: in 2008, I felt a brief surge of panic. The TI team at that time was a fraction of the size it's today. We are still small, but basically, it was tiny in 2008. The markets appeared to have bottomed in 2008, there was a nice strong rally, and then all hell broke loose, and we dropped into March 2009. I, together with many others, felt the end was nigh, but it lasted for just a moment because MP is something I use almost in every aspect of my life. The question popped into my mind if everyone is selling, then who will make the money? Will the situation look this dire 2,3,4, years etc., from now? Most importantly, I asked myself, " do I need this money now" and I did not because one should never invest money they need for daily expenses. So the following thought was, hey, you are making it worse because you are acting like you need this money today when you don't. This simple exercise cleared the doubt. Had I given into fear, I would have allowed this fear to feed into my writings and TI subscribers would have sold at or close to the bottom. I remember not shortly after the bottom, we looked close to 600% on uranium play, the company changed its name or was bought out, but the symbol at the time was URRE (Uranium Resources).

The 2008 to 2009 plunge was terrible, but the long-term outcome was beautiful. As humans, we are hardwired to respond to fear, and the fear factor seems to have no limit. It is easier to get your fill on pleasure or being in a good mood than fear. It seems most of us have an insatiable appetite for fear. In some ways, we are mimicking 2008-2009 in terms of intensity and 1973-1974 in terms of patterns and direction (also, there are several similarities). However, if we add the Russian war and the sanctions, one could argue that this is the Lehman brothers event that hit the markets in 2008 and that made things from bad to incredibly terrible.

The only thing I know for a fact based on historical studies going back 100's of years is that every disaster provided to be a such opportunity for the weasels that caused it in the first place. These guys purposely invest time and energy in creating the next disaster because they know that is the best way to make out like a bandit. This is why they are always working on the next one before the current one even ends. COVID started, and they must have been working on this one before the COVID narrative ended. They are probably working on the next one, but first, they will let the next bull run several years before allowing the next disaster to strike. The next bull will run for several years. A rough estimate is that it will end when the Dow trades in the 74 to 82K ranges. As a rule, a new bull Run does not start until the old highs are taken out. That means the Dow has to trade above 37. More on this topic later on.

However, focus on these simple facts.

1) Do you need the money today? If not, why treat the paper loss as an actual loss
2) would you have been happy buying stocks in Oct of 2008, well before the bottom in 2009, if you had the chance today? Off course you would; even at those high prices, you would have made out like a bandit
3) If everyone is selling, who will make the killing in the years to come? Most people that sell under pressure do not get into the market for years due to the fear factor

Lastly, one can live 1-2 standards below one means as most Americans live several standards above their means. Sock this money you save and deploy it to top companies.

Is any of the above easy to implement? No, it's not so easy. That is why very few make a killing in the market, which is why the big players silently call the markets their killing fields; they kill the masses while they make the killing.

[nicolas]

Go ahead and give it your best shot to convince me that a complete market short (bonds and stocks) is NOT the way to go. If there was ever a perfect storm that can bring us there, I don't recall it in my time. There is a flock of swans circling, and they are not white.

If there's one thing that never changes is that there is a low probability of making money off events that:
1. the crowd expects to happen
2. the crowd is already massively positioned for.

1 => Unless one lives in a cave, it's hard to avoid being bombarded by negative news. I'd say few people believe there won't be a recession, or that we're not already in one (Europe sure is.) That the economy will only get worse from here (in the short term) is the consensus view. It's extremely likely to happen and everyone expects it.
2 => Speculators are already positioned accordingly, i.e. super bearish, see COT report for equity indexes, sentiment indicators (CNN, AAII), put/call ratio, and a record amount of premium paid for downside protection. However, it's clear some have been trying to pick the bottom, and until they capitulate it's difficult for a bottom to hold and a relief rally to start.

Sure, betting on the consensus view sometimes works, but long term, the positive edge is on the other side of crowded bets.

That being said, what should happen doesn't have to; anything can happen, at any time. The solution to uncertainty is to think in probabilities and take bets with a positive edge again and again, like a casino.

[Yodean]

And let's face it--as good as the TI newsletter and approach has been how potent can it be if the information it relies on is now polluted with bias, misinformation, and deception. I love the idea of the indicators, but if the sources are now manipulated then man oh man, all we seem to have is "the long term trend is our friend". But what good is knowing the long term if in the short and medium term you are left with little to harvest the long term trend?

I am posting this to shake up the thinking here. This is not directed at the quality of TI or the fact that all of our crystal balls have a massive crack in them. I am simply curious of what everyone is thinking of what is transpiring and what they are embracing.

Excellent points.

When there is a lot of emotion and information flowing about, it's best to really focus on less - but higher quality - information.

The stock markets, at the end of the day, are still the way by which wealth is transferred from the impatient to the patient. Or the 8/9 to the 1/9 - we don't have to quibble about the exact numbers - the Herd to the Rich.

The bitter truth is that I learn the most in bear markets, and the more I lose on paper, the more I learn. I don't learn much in bull markets.

One thing I learned this year was that sentiment measures, no matter how they are calculated, adjusted, etc., are not sufficient for calling tops (nor by extension, bottoms).

I was really counting on using them to get out of my "risk on" equity positions earlier this year, and it turned out literally to be single biggest investing/trading mistake of the last 19 years (I started investing around 2004), for me personally.

So sentiment analyses isn't enough - I still use it, but combine it with COT data (Harry, Nicolas, and I have been loosely working on this for a while now) and some technical analysis, along with my own TrendForce valuations and personal indicators.

On balance, I am quite bullish atm. Yes, there could always be another spike down, but that's ALWAYS the case ... the final capitulation spike.

Try to imagine what things are like 12 months from now ...

[jonnyfrank]

Great insight. Thank you.

Part of the issue is when I do look at things 12 months down the road. I am worried mostly about desperate politicians and "leaders". As a lot, politician have always shown signs of NPD (narcissistic personality disorder), but have generally managed it (not that you really can, but the mask has historically been effective). Now that we live in a world without shame, the NPD is in full bloom for all to see (or in the case of AOC, BPD), and they don't hid it. There are a lot of cover ups right now among politicians between Epstein island, insider trading, and the partisan nonsense going on with the DOJ, FBI, and CIA. The printing of money to pacify the masses will (is) end badly. The soft white underbelly of the common man will always exist, and it is ugly. The masses are not above stringing up politicians, even though many want to virtue signal the fiction that we can all get along and co-exist. I see a bad moon on the rise.

From a proactive standpoint, I am buying land with fresh water well capability (here in TX surrounding towns have had drinking water shortages, which in this day and age seems insane), good soil, and far enough out from a major metro so as to avoid the insanity but close enough to a large town with supplies. I have raised to solid young men who are either in university or recently graduated with majors in engineering, but I worry about my young pre-ad daughter and what the world may hold for her. It is tough raising a daughter these days, as virtue must come from the household (and in our case, our Catholic faith, which is certainly not without its flaws) and one needs to walk the fine line between raising a lady with domestic ability while teaching the skills of an Amazon queen, complete with archery and gun shooting skills, lol.

[bpcw]

One other thing, at age 60 I was fired from a job for not taking the clot shot. 3 years from a pension. I lost 8 years of social security earnings (State job). I have now dropped out. I spend very little money. Restaurants, expensive vacations and many nice to haves are gone. I do not even miss them. The toxic morons I used to work with are also gone.
I like walking in the woods and playing with my dog. I like spending time with my my wife. I have actually (in my opinion) raised my standard of living by losing income. I will make it because I really proved I can say “Fuck it”.
Click, click, click. Maybe they are brass now.

I wrote a longer response but somehow lost it. Basically I couldn't agree with you more about one's standard of living with simple things that are free!

[MarkD]

Historical facts.

I was at a party for Y2K. Everyone was happy and talking stocks.

I was at a party in March of 2009. A colleague who worked for a Dow Jones 30 company had just sold every stock he owned and gone to cash. I couldn't tell him I had bought back into the market that very day.

A large majority of folks I know are currently prepping for a recession.

And if a nuke lands nearby it won't matter anyway.

Just had surgery on my ankle Monday. More worried about constipation atm than anything else.

[Yodean]

More worried about constipation atm than anything else.

This is a very valid concern.

[bpcw]

More worried about constipation atm than anything else.

This is a very valid concern.

A nuke will probably help with that!

[Yodean]

From a proactive standpoint, I am buying land with fresh water well capability (here in TX surrounding towns have had drinking water shortages, which in this day and age seems insane), good soil, and far enough out from a major metro so as to avoid the insanity but close enough to a large town with supplies. I have raised to solid young men who are either in university or recently graduated with majors in engineering, but I worry about my young pre-ad daughter and what the world may hold for her. It is tough raising a daughter these days, as virtue must come from the household (and in our case, our Catholic faith, which is certainly not without its flaws) and one needs to walk the fine line between raising a lady with domestic ability while teaching the skills of an Amazon queen, complete with archery and gun shooting skills, lol.

Well, it sounds to me like you've done extremely well the stuff that's much harder than playing the markets: raising three children to face our brave new world - the New Normal. Kudos.

Wrt to political corruption, the 3-letter agencies, mass menticide by mainstream media, etc. I couldn't agree with you more. But I would venture to say you don't want to get distracted by that stuff when it comes to making money in the markets.

Most will lose money in the markets - I don't think this will ever change, not really - and part of the reason for this, I think, is the distraction induced by all the serious stuff you mentioned.

Reverse repo. still around 2.36 trillion USD or something like that, last time I checked. Right now the U.S. shorter term Treasuries are offering crazy (for this time period) high yields, so there's flight-to-safety of capital there, but at the end of the day, real interest rates are still negative, and at some point, the "smartish" money is going to flow back into "risk on" assets.

TLT/TMF had a huge day today, as you know. USD doesn't look like it's going to break 115 to the upside on a monthly/weekly/quarterly basis on Friday.

At this point the path of least resistance appears to be up for equities, at least for a bit.

[SOL]

Historical facts.

I was at a party for Y2K. Everyone was happy and talking stocks.

I was at a party in March of 2009. A colleague who worked for a Dow Jones 30 company had just sold every stock he owned and gone to cash. I couldn't tell him I had bought back into the market that very day.

A large majority of folks I know are currently prepping for a recession.

And if a nuke lands nearby it won't matter anyway.

Just had surgery on my ankle Monday. More worried about constipation atm than anything else.

I mentioned in a post previously that a good buddy sold half in 2008 and then everything in 2009 around March. I started to tell him that was a mistake. A huge mistake on my part; he went into a hysterical rant that the market was doomed forever, and others that heard him nodded their heads in agreement. I said okay, my bad and backed down. He and many others sat out of the market for almost ten years. He jumped back at some point in 2019, fell for the fear mantra generated from the COVID crash, and sold close to the bottom. If not for some real estate, he would be in a very bad shape

Constipation is a valid point. Senna can help though it's temporary help. Eating 50% more veggies or adding papaya to the diet can do miracles.