⛹️♂️ Love the honest self reflection/awareness, very relatable even for the lower level retail investor meaning me 🙂. It’s a close relative to gremlins and self sabotage, with a twist.
I feel your pain. I think that pretty much any money manager ex-US has suffered greatly since the GFC (except perhaps India). EM Funds have grossly underperformed, Europe is a dead market, Japan has recovered but that's more a Yen devaluation play so unhedged long investors haven't done all that well.
What makes me uneasy isn't just the high valuation of the S&P500 or Nasdaq, but rather the conflicting signal - Gold is doing very well in dollar terms while the equity market is tearing ahead at all time highs. This isn't usually seen in a developed market, previous examples of roaring bull markets: 1920s, 1960s, 1980s, 1990s occurred when gold was either flat or declining in price.
To me, this signals the risk of a large dollar devaluation ahead: but then since 2015 this has not materialized, indeed we are seeing de-euroization and a collapse in the Yen exchange rate before the dollar devalues.
Tough times for active managers indeed, the only "contrarian" trade that works is to long gold. Maybe construct a portfolio that's long 50% Gold 50% NASDAQ and short 50% TLT short 50% Bunds?
Do you want to be right, or do you want to make money. Seems like author has his answer, not necessarily the one I would recommend for him - but at least being true to himself.
Actually, if you can justify why you should be buying the dip (ie: why US asset prices will continue to soar) it would still be worthwhile.
Myself, I thought that the 2008-2020 period was a low-interest rate aberration, which turned out to be wrong. Maybe historians would look back at the crash of 2008 as the start of monopoly capitalism (as opposed to a previous era of more competitive capitalism).
This newsletter made me want to subscribe to your substack, honestly. I ask my self at least 100 times a year, why don't you just index? I've had some wildly successful years of destroying the indexes. But I've struggled the last year and a half if I'm being honest. I don't want to index. The thing that really kills me is the comment you made about "Well if you index, you just lose like everyone else." I just can't do that. Winning when everyone else is losing seems like the only sure way to win the game. That and I love concentrated risk. Anyways man, loved your article. I needed some comfort this weekend and you gave it to me. Big smile on my face. Thanks. Oh and PS... maybe Nasdaq is putting in that double top. ; )
Thank you. To be fair - I would be more supportive of indexing if it worked for all markets, but as it currently only really works with US stocks - it feels like an imbalance to me. The risk is that it is different this time (it has been). Let see - Google looks at risk which I find interesting.
⛹️♂️ Love the honest self reflection/awareness, very relatable even for the lower level retail investor meaning me 🙂. It’s a close relative to gremlins and self sabotage, with a twist.
"Knowing yourself is the beginning of all wisdom." - Aristotle
i too suffer from the same need, to smartly play, to relish the win
I feel your pain. I think that pretty much any money manager ex-US has suffered greatly since the GFC (except perhaps India). EM Funds have grossly underperformed, Europe is a dead market, Japan has recovered but that's more a Yen devaluation play so unhedged long investors haven't done all that well.
What makes me uneasy isn't just the high valuation of the S&P500 or Nasdaq, but rather the conflicting signal - Gold is doing very well in dollar terms while the equity market is tearing ahead at all time highs. This isn't usually seen in a developed market, previous examples of roaring bull markets: 1920s, 1960s, 1980s, 1990s occurred when gold was either flat or declining in price.
To me, this signals the risk of a large dollar devaluation ahead: but then since 2015 this has not materialized, indeed we are seeing de-euroization and a collapse in the Yen exchange rate before the dollar devalues.
Tough times for active managers indeed, the only "contrarian" trade that works is to long gold. Maybe construct a portfolio that's long 50% Gold 50% NASDAQ and short 50% TLT short 50% Bunds?
Do you want to be right, or do you want to make money. Seems like author has his answer, not necessarily the one I would recommend for him - but at least being true to himself.
Pretty much correct. But would you.be reading this substack if all I said was buy.the dip?!?
For what its worth, I've been thinking about this piece a lot. Appreciate you writing it.
Actually, if you can justify why you should be buying the dip (ie: why US asset prices will continue to soar) it would still be worthwhile.
Myself, I thought that the 2008-2020 period was a low-interest rate aberration, which turned out to be wrong. Maybe historians would look back at the crash of 2008 as the start of monopoly capitalism (as opposed to a previous era of more competitive capitalism).
For what it's worth, my TLT puts have done quite well in the last week...
I’ll still be your friend! What you lack as an Aussie living in London is the unbound optimism that is pervasive in the USA!
Why not just make a fortune and cash out? Don't miss opportunity, it's limited in 1 lifetime
This newsletter made me want to subscribe to your substack, honestly. I ask my self at least 100 times a year, why don't you just index? I've had some wildly successful years of destroying the indexes. But I've struggled the last year and a half if I'm being honest. I don't want to index. The thing that really kills me is the comment you made about "Well if you index, you just lose like everyone else." I just can't do that. Winning when everyone else is losing seems like the only sure way to win the game. That and I love concentrated risk. Anyways man, loved your article. I needed some comfort this weekend and you gave it to me. Big smile on my face. Thanks. Oh and PS... maybe Nasdaq is putting in that double top. ; )
Thank you. To be fair - I would be more supportive of indexing if it worked for all markets, but as it currently only really works with US stocks - it feels like an imbalance to me. The risk is that it is different this time (it has been). Let see - Google looks at risk which I find interesting.