WM 7 May 2022

Quotes

So, the only absolute truth is that there are no truths

In markets this is the same, you need two to tango: a buyer and a seller, ie two different perspectives that can agree on a price. The truth fluctuates.

The truth = the most credible, believable story of the time, but it can change

For progress, you must agree to disagree

War & peace vs War & politics

Lessons & Thoughts

Secular vs Cyclical

Bubble about to go burst from 3 to 4

Taking criticism well

Maslow

The core

Like a Japanese candle in the wind

I want to break free

MAVs

The trading plan

Macro news

Money

Even in Switzerland

GDP

USA

ISM

Germany

China in lock down mode will hurt global growth

Why lock downs when Covid does not kill

WTF, literally

Inflation

The great moderation no more

Restocking has happened ("from just in time to just in case")

Destocking about to

Demand destruction has started

And employers are revising their plans (eg Amazon)

When money starts to come out of the economy, yields will fall

Precious metals

Cryptos

Dollar wrecking ball

Dollare ho ho

Financial centre currencies are getting crushed. Is there a trade: long commodity currencies (AUD/CAD) short financialisation currencies (GBP/HKD)?

Fixed income: risk free is not without risk

10Y gvt yields

The BoJ was the first to experiment QE. Now it's about to experience the true cost of debasement. Yen collapse will drive interest rates higher and dollar surge and liquidation of financial assets

Interest rates

Destroying debt with inflation

Real estate

Housing bubble explained: buying houses you cannot afford

Catalyst for change

Equity

Nowhere to hide

ISM and S&P

Stocks vs Bonds

No more buy the dips, but sell the rallies

Drawdowns, corrections & bear markets

Average bear market = 286D (9month) and -37%. Longer ones -50-85% and 3 years. Shorter ones -20% and a a few months.

Why short selling is hard even in bear markets

EM (already down) vs DM (just going)

Head & Shoulders

Meanwhile in China

H+S that were false dawn

Eurostoxx testing trend channel

Still expensive

Earnings revisions

Money coming out of stocks

Sentiment indicators are self reinforcing

Cash balances suggest bounce soon?

Not necessarily

Stock picker market?

Private equity & venture capital

Sentiment & allocation

Volatility spiking

Commodities

Restocking has happened

The Fed, Chinese lock downs are targeting one thing:

What happens when we run out of oil & gas?

Themes, Sectors & Corporate news

High beta

Citi and mini flash crash

As American bidder is buying Chelsea football club, note value of NBA franchises. Current Champion the Bucks were bought for half a billion now worth USD 2bn