Gregmal

Think you guys are missing something else super obvious. Especially from a credit analysis perspective. That’s the number of people who are locked into their car ownership, regardless of what cars they buy going forward, simply by the negative equity aspect. Whether it’s leasing or financing, so many people would be prohibited from just walking simply because of the degree to which they are more or less forced to roll into new leases or financing due to having to cut checks to be free of it.

“Almost all of the monthly inflation increase came from shelter costs, which rose 0.4% and were up 7.7% from a year ago.” LOL…and they think the answer is still hiking rates! This has to be one of the dumbest regimes we have ever had. THEY are the cause of the inflation at this stage of the game….

Yup. The second everyone has clarity is when all the easy money is gone. Then you just gotta figure out where and when they’re gonna do it again. Or just permanently call for a recession lol.

They’re hedges, the only problem with them losing money is if you aren’t making money. When they work I expect my broader portfolio to be declining, and when they work I structure them so they should pay out multiples of the capital I commit which allows me to then redeploy it at much lower levels. The $210s should 5x on a 20% correction.

#impairments #whereRtheExpertsHiding?

Added a good slug of Jan MGK 210 puts as an insurance policy on Wiley Coyote.

This is a world class document/collection of analysis/thought process crystallization/whatever you wanna call it. I simply dont have the skillset or attention span to produce something this organized so it would be a nonstarter anyway. I kind of thrive off moving parts and disfunction. Vikings work was so precise it was impossible to miss. Still working though it all but indeed so much of this stuff is shifting and pivoting when called for and that begins with ones own biases.

AIG. Thanks @kab60 for mentioning in the other thread. Pattern recognition kicked in pretty much right away and this one should print money for a good while with the setup. Got all the traits of something that can surprise from here. Hadn't followed it since maybe 2014/5 or so. Will always have a soft spot for the ticker as well as its one of the first(along with Apple) investments I went huge on back when starting my business that ended up being monster winners.

I have similar situation wrt to funny looking costs simply because I skipped the whole starter home thing so my first home I bought in 2013. “At cost” it’s an average, mediocre home in respect to 2023 prices. Have bought multiple vacation homes and investment properties for amounts in excess of my “cost” on my first home.

I think there’s a high correlation between those that are using the word bubble, and those that are either trying to sell you something, or make excuses for shitty performance.

I really don’t see a whole lot different in sentiment. Some people are still investing. But largely the same folks who were bullish or bearish are still finding excuses and moving goalposts in order to maintain the same exact macro positions they’ve had. All I see personally is a good deal less value broadly speaking, but there’s still pockets of it. Otherwise think it’s a stretch and cop out to say euphoria or bubble and the only ones who are doing that are the ones who have been doing it a long time and wrong.

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I think the market gives everyone what they want. Todays "long bonds" fear is a few weeks ago's recession fear and a few months ago banking crisis and the year befores sticky inflation, and the prior years covid variant..... If you're looking for ways to make money, the market will give you that. If you're looking for things to be afraid of the market will give you that too. The market basically gives everyone what they want.

It really does seem like every week or month there’s a new headline risk and of course, THIS! is the one that does us all in….

I haven’t understood why anyone cares either way. The ratings are a joke put together by idiots rife with conflict of interest and no real purpose. Like does anyone know how the ratings agencies make money? It’s so dumb.

I just recall how ironic it is that when Trump was in office and actively making peace efforts in North Korea, China and Russia, while also asking the freeloaders in Canada and Europe to pay up, folks whined and cried and idk what else but he hurt their feelings or something. The second Biden comes in we gets wars and constant escalations and oh! Now it’s uncomfortable….

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Eh don’t really know anything about these but generally feel all the REITs are boring right now. Not bad investments, but nothing to get excited about.

Why do you know of this? Sounds interesting. Sorry for the lazy question lol

Yup. Textbook vs real world. Rates rising means debt will be more expensive and therefor it will HAVE TO! dent profits…..real world? Go look at most balance sheets. Debts a non issue for most. Add in a perfect excuse to jack up prices…it was visible from afar for sure. Mostly everyone was prepared. As we discussed earlier, the ones who get fucked are the mom and pop companies. Same as COVID.

Yea there’s a lot to it and it’s never simple because usually once it gets simple, by nature, it changes, that’s just how markets work. Really, in a funny way, if everything came down to sentiments the markets would either be at zero or all time highs, all the time, with little in between due to stampede mentality that has only grown with internet and auto trading. So it’s important to pay attention, but also ignore noise. Use noise to identify extremes. Right now hardly screams extreme to me. Too many negative Nancy’s still. Too much cash built up. Too many bond bros. And again, broadly speaking, too much of the market is just meh on valuation. Good not great but hardly expensive. Last year 2H did seem extreme. Q121 to me did with spac and short squeezes. The constant “you can’t short the markets” talk which of course is always a signal you want to see if you want to short the market. Basically every time in my life little things become big things, you want to look to get on the other side of it. CPI reports, daily COVID case counts, Fed meetings, etc becoming events that move markets in massive ways….they’re just not that important in the long run so if you’re getting that price action it’s a signal. So IDK, just stick to your knitting and circle of competence and wait for things to come to you. In a way it’s why margin is sooooo helpful to me. As long as I’m over 100% invested, I can trade, hedge, scratch all those itches because it’s money that isn’t mine so I’m entitled to nothing and therefor worrying about tops and bottoms and catching all of the moves in between is irrelevant. If something goes 10-78 and I only get the 20-25 part of the move, it’s still money I wouldn’t have made if I wasn’t levered. Whereas if I was 60% stocks and 40% cash and I bought at 20 and sold at 25 I’d be fuckin pissed if it went to 78. So everyone’s just gotta roll how they see fit but finding ideas is crucial and it’s always something that can be done whether at highs or lows or whatever.

How so? Markets aren’t demonstrably higher than years ago. Lots of the real big economy stuff like Dow components for instance…Dow pre COVID was what? 30k or something? So 3.5 years later it’s 20% higher? I think the companion error is finding excuses not to invest at either the top or the bottom because it’s indicative of a strategy that probably leads one to always be underinvested or said differently, never invested. It comes back to that convo people tend to have where they state matter of factly, with perfect rear view mirror vision, that…it was so easy investing the last decade because all you had to do was follow the Fed. Low rates and money printing bubbles….blah, blah, blah. And invariably, they use that same fallacy in terms of logic to justify their position of currently “fighting the Fed” and therefore holding lots of pansy positions. But then you ask if they were levered big and super long call options since the past decades exuberance was so obvious and the answer is always…..NO! Often they were positioned….drumroll, EXACTLY the same way they’re currently positioned today! People do a lot of really weird shit to psychology remain convinced of their correctness even when there’s mountains of evidence suggesting otherwise.

I think some of this just highlights the biggest problem that many otherwise rational and intelligent market participants have…they are fully convinced that being a good investor is about “not losing money” and they quote and misquote guys like Buffett all the time and totally misread everything because they’re chickenshit scared or paralyzed by fear or search endlessly til they find a reason to convince themselves that it’s tough sledding out there. It’s masked under the guise of “risk management” but it’s stupid. You don’t go to a BBQ or buffet and then sit around trying to find excuses and reasons not to eat. Same way you don’t go to the stock market and try to find reasons not to invest. Rather you go to the stock market to make money. So priority one should not be all that other bullshit. It should be finding ways to make money. Then once you have them, you approach the risk mitigation strategies and positioning and integrate them into your overall game plan. If you can’t find ideas consistently you just shouldn’t be in the stock market. Winning isn’t for everyone.

If the recession doesn’t unfold, what’s the backdrop? An environment where the consumer is healthy, prices still steadily declining, employment strong and wages moving up, along with rate cuts probably 6-12 months out. That seems bullish to potentially wildly bullish. Rates went up to “fight inflation” and as inflation is done you better believe the Fed will acknowledge the harm it’s doing to the average citizen as far as housing goes so you won’t need “something really, really bad” to occur for rate cuts, which is what the academics are preaching…frankly I think they start cutting q1/2 2024 which will tank mortgage rates. Many of the negatives and naysayers are wayyy too academically oriented and relying on first level logic such as “every time this has happened, such and such has happened”(which totally ignores what is happening in the real world in favor of the textbooks) but this is plainly poor logic simply because markets do evolve and especially in todays era of information, much more quickly than folks think. Like everyone was and has been prepared for higher rates since what? 12-18 months ago? Corporations already wisely termed out debt. We were assured inflation would cripple profits and instead they are now expending margins. Think we just need to be flexible mentality and eb and flow with how things unfold.