Still thinking about this thread in light of my own portfolio, & this tweet in particular. If you tried to trade bearish on macro events the past few years (Brexit, Eurozone crisis, whatever) you lost. Low rates & easy money > all.
Is it just me or does this virus mostly not exist on finance twitter (with a few exceptions)?
Right now thinking about this segment from @ReformedBroker and @michaelbatnick on Apple and coronavirus.
@ReformedBroker @michaelbatnick This does seem to reflect the sentiment -- it's a temporary pause in activity & doesn't affect any fundamentals anywhere. Things will return to normal after some sort of pause, & everyone who wanted an iPhone (or whatever) will get it then. So no big deal.
@ReformedBroker @michaelbatnick As Josh points out, same story with the trade war as with Brexit, EU crisis, etc. If you were bearish for that particular macro reason, you lost bigly. The lesson has been learned, I think: no bearish macro bets. You never go full ZeroHedge, ever.
@ReformedBroker @michaelbatnick Yes, exactly this. It's kinda what I meant by "finance twitter", i.e. "non-permabear/goldbug twitter."
@ReformedBroker @michaelbatnick Here's a wrinkle I've pondered but not explored: "China is cooking the books" has been A Thing since like 2010 at least. I remember going through a "Chinese data's all fake" phase, then throwing in the towel in like 2011 on the "China crash" thing.
I think that's coloring...
I think that's coloring...
...how people are looking at the "China's case numbers are fake" idea. Like, it sounds too much like "Chinese GDP is fake, they're hiding an over-levered system, it's gonna crash, etc." which has been a money loser doomer trade for a decade now.
I mean, I still think the CCP's economic data is fake, but I just quit caring in 2011 because it didn't matter. "Don't fight the tape." It may possibly turn out that the fake Chinese case numbers don't matter either 4 the tape. Ppl die in secret, but factories are running so 🤷♂️
Here's the rub, tho: people aren't going to be dying in secret while factories stay open in Korea or Japan. We'll know the score, there, & the market will have to reckon with what happens in those two countries if it gets bad.
Anyway, back to the OT: if you have a 20 year career in finance, then half your career has been under the Fed put, & you have relied on it for that long because if you didn't then you're not in that job anymore. Everyone who was willing to trade against it is broke & gone.
Related to the unshakable faith in the Fed put:
