This week we got another confirmation of red hot inflation still on-going, yet “Brandon” dares to tell the world inflation is under control thanks to his government. This feeds the animal spirit of the market participants to push the market much higher. Very interesting dynamics going on in the stock market right now. Could this be the start of yet another major bull market just like that crash low of year 2020 as suggested by some, or, a bear market rally as others keep saying?
For a snapshot of the current situation, this is a good summary from David Hunter. He is the guy who thinks the S&P 500 will go up to 5000 or even 6000 quickly and then we face a bust that wipe out everything in 2023.
On the other hand, there is also a more pessimistic view of the near future.
I do not have strong opinion of which way the stock market will go at the moment. If you study history, especial the Weimar Republic, you would know that in a chaotic environment with hyperinflation, under the pressure of currency devaluation, the stock prices of the regime can go parabolic. But it does not mean that you are making money, because the actual value of the stocks do not rise fast enough to compensate for the loss in purchasing power. In short, it is best not to hold anything at all with the sinking ship.
The tricky issue is whether this is the end game of the financial system of the Western world. No one knows the answer.
Here is a good video from Patrick Boyle on the ARK fiasco and good lessons for retail investors.
Moved some heavy stuff around my house so that I can better utilize the space. I find doing chores like that and stay away from my regular research projects helps me clear my mind. When I get back to my work I often manage to see new ways to solve the problems on hand. If you do a lot of algo design work or deep research like me, you can try taking a break doing something else all together for a day or two. Give it a try!
Have a great weekend all!
