So now let’s talk “markets” aka Wall Street. Or, should I say – maybe let’s not. Because all that needs to be said, I’ve already said. It’s just now everyone is catching up, and those that haven’t already don’t want to hear anything to burst their bubble. I.e., The “markets” are rigged, you’re just playing high stakes casino games. Best of luck.
I could list article after article, or quote television or radio newscasts of those in the mainstream business/financial media that are suddenly shocked (shocked!) to find that maybe, just maybe, there are no real valuations or fundamental relationships to where prices of stocks are. Or, said differently: That it could, possibly, all be just narrative and momentum chasing funded via central bank largess. (Ya, think!)
Tesla™ nearly $900 a share, makes no money except for selling government credits, has less than 1% market share, and yet, is larger in market cap than just about all automakers globally – combined.
Or, Bitcoin™, one day it’s up $10K, next it’s down the same, if not more and vice versa. Why?
“The fundamentals!” I hear.
“Sounds just fantastic!” I say.
So, when I inquire further, like “What made it worth $45K yesterday and $35K today? You know, fundamentally speaking?” The response usually goes something like “You just don’t get it!”
“All righty then!” I’ll say internally, as I look to change the subject, because arguing or discussing anything further is a lesson in futility. Yet, that still begs the “fundamental” question, unanswered, like: When it’s tanking out-of-the-blue like it has so often. At what level do you buy more? And/or at what level do you take profits? You know, “fundamentally” thinking?
___________________ (insert crickets chirping here, along with blank stare)
No one knows because there is no true answer. It’s all narrative and momentum. Yet, it is because of this trait that it is so dangerous, for it doesn’t matter about the upside – it’s about the other. e.g., downside. And how to protect oneself. That’s truly all that matters.
And yet, in today’s world? “You just don’t get it!” is all I hear, even though I’m the only one on record, twice, to correctly call Bitcoin’s year end valuation, or devaluation if you prefer. Again, amidst all the so-called “smart-crowds” calls for the exact opposite, But, then again, as I say “What do I know.” Right?
The issue with every bubble (and, in my opinion, Bitcoin is a speculative bubbly-icious bubble) is narrative and momentum have no fundamental stability. Meaning – when a price is dropping there’s no guarantee (or fundamental reason) that people will re-invest, let alone, new buyers. Narrative and momentum are the equivalent of grasping smoke. This is what happens with all bubbles throughout history. Repeat – all.
But no one wants to hear it. And personally, I’m done trying. I’ve made my own call for what I think will happen (once again) by year end, but we’ll just have to wait and see till then. And personally, I could care less.“Speaking Frankly…” February 11, 2021
As I type this on Tuesday morning before the “markets” open for the U.S. day session, the following has happened over the past seven trading days (i.e., week and a half-ish)…
Tesla has entered not only a bear market, but is on course to open today down even lower culminating to ~30% down from its recent highs.
Bitcoin™, although it has recovered some depending on what day or time one wants to look at, went from ~$58500 then crashed overnight to ~$48500 then rebounded to about $55,000 last night to then drop, in the same, to about ~$44,500 where it’s trying to get back to $50K but seems tired as of this writing.
But then again: What do I know, right?
Here’s one thing I do know If Tesla is crashing and Bitcoin is having $10K plus swings, you know on “fundamentals.” Here’s something else that’s going to come crashing down. To wit:
As one can see by just reading my above excerpt…
That’s a trifecta that few others dared even think.
But what do I know about such things, right?
Oh, yes, just to point something out in case you may miss it – you also needed to be a paying subscriber to have read that great “business and investing insight” from the next-in-rotation-fund-manager, flavor-of-the-day, slobbering just six days ago.
As always, we shall see. But things are starting to get very interesting, indeed, yes?
© 2021 Mark St.Cyr
Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.