WM 1 October 2022

Quotes

When you’re right be quiet. When you’re wrong admit it.

Once we realise that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes. It takes courage to admit or at least a

Lessons & thoughts

If too complicated or not reliable, don't

How do athletes turn fear into confidence and success

Tip 1 : Being nervous is good. So I am not nervous I am excited/"adrenalised"/energised. Being anxious is normal, don't try to fool your body. If you say "calm down", does not work. Instead, if you say great energy, excited, it does help.

Tip 2 : don’t do all the work yourself. Let others to support yourself. Helps you lose the ego and find purpose greater than you.

Tip 3 : Mentally rehearse. Visualise. Increase motivation.Give confidence. Be specific on what you visualise, imagine what you might feel, hear, etc. Visualise how you would like the future to go.

Tip 4: Self talk. You got this. I can do this. “I am the greatest”

Wanna work in Alternative Investments?

Tesla said focus 3,6,9 series

Bernouilli

he Bernoulli equation states that an increase in velocity leads to an decrease in pressure. Thus the higher the velocity of the flow, the lower the pressure. Air flowing over an airfoil will decrease in pressure. The pressure loss over the top surface is greater than that of the bottom surface.

Individualism

Is peak individualism and the woke movement part of the same cycle? If not how a subjective view of what being a woman is overrides the objective (dare I say scientific) view?

Stock selection framework

Tripitaka Koreana

Candelsticks

Behavioural cycle

VUCA

VUCA Volatility Uncertainty Complexity and Ambiguity. “A crisis you accept is an adventure. An adventure you don’t embrace becomes a crisis”.

The power of psychology

Price vs news

Depression?

Macro news

Money moves markets. Earnings do not. This the Fed that matters, so focus on central banks and global liquidity. The Fed drives the US dollar and thus the price of financial markets. The PBoC drives the Chinese credit cycle and thus the world's economic business cycle via trade and commodities.

Global liquidity

Global liquidity cycle almost complete. Bottom soon.

Two mega pools of liquidity: Fed and PBoC

The Fed matters for financial markets (US dollar rates), China matters for the global economy (commodities, trade and capex). China's tightening took place 18 months ago. It destroyed the property developer sector and its equity market. It's the one to watch as it may well the first in and the first out.

Goldman US financial conditions

Central banks power is too high.

We need a bigger boat

Geopolitics

Why China wants power.

The end of globalisation (Europe reliance on exports/US reliance on imports and manufacturing of goods in China)

Markets (global) vs Democracies (local) and the rise of populism

What's at stake in the Western world?

Someone cut Nordstream 1

Far right gaining ground in Europe: Sweden, Italy. Who's next?

If demography is destiny, then these are the countries to watch

GDP

Supply chain issues easing

CPI

Weymar

But all countries are working against central banks by giving subsidies to their populations in order to "help", thereby borrowing more and creating more money... See tax stimulus in Britain, USD 200bn energy subsidy in Germany or food subsidies in India

Can't find labour in the US? Here is a reason

Precious metal & crypto

Gold

Gold is not a hedge against consumer price increase, but a hedge against the debasement of currencies. When the Fed is tightening, Gold falls. However, when the Fed is doing QE, Gold reacts positively. Right now, strong dollar policy is a killer. However, when Fed 's ready to pivot and do a BoE, then Gold will bounce.

Bitcoin holding up well

Dollar: heil to the chief, but beware of climax

DXY

Note that CNY is not in the basket because not tradable and free floated. This is why CNY more stable and controlled by the Chinese.

Proof of manipulation as Chinese authorities want the Remimbi to be a store of value for China's trade partners in order to eventually replace the dollar..

EURUSD

The euro is a flawed currency. Italy is bust without ECB intervention and Germany's CA is now a deficit due to energy crisis. Therefore, ECB will not do QT and balance sheet will continue to grow.

Some think Euro about to turn

CHF strength marking a pause

Normally, fiscal stimulus in tightening cycle = rising currency. However, if fiscal stimulus = driving more inflation and current account deficit, then sparks fall in currency in anticipation of more debt and more debasement. BoE had no choice but to intervene. It worked.

The collapse of sterling happens almost 30 years after Soros and his PM Stan Druckenmiller broke the Bank of England. This is what Stan says about the bet