Thread by @PrestonPysh

Investing during manipulated market conditions (a thread).

Let's face the facts, you are not participating in free and open markets, so what's an investor to do? Here are a couple important aspects I think people should consider based on the current environment ... Post 1/

First, I think it's important for people to realize global governments are providing large amounts of stimulus - MASSIVE amounts of stimulus. As you can see in this chart, the trend of stimulus has been going strong for more than a decade and it's not letting up ... Post 2/

In fact, it might even be accelerating. So what does this mean for stocks? Well, to date, it has meant the consolidation of earnings power into the hands of the few. Check out this awesome chart from @LynAldenContact. Not only that, but it appears the consolidation ...Post 3/

is especially advantageous for companies with intangible assets that are difficult for competitors to impair - i.e. Google Adwords, Apple's strong network effects for applications, Amazon's AI software which gets smarter with more shoppers and more data, etc. ... Post 4/

Throughout this period of time (last 10 years), value investing has been punished. I suspect the speed at which technology is moving is causing many of the competitive advantages of undercapitalized companies to get eroded quicker than historical periods. ...Post 5/

On the other hand, momentum investing has been a great strategy throughout this manipulated period of time. So let's look at some momentum trends for various companies and indexes. ... Post 6/

The following tool assesses long term momentum trends and provides positive or negative recommendations based on price performance. First, let's look at the S&P500. This turned red on 26 FEB and has stayed red to date. ....Post 7/

Interestingly, the Nasdaq turned red on the 6th of March (at $208 on QQQ), but then turned green again on the 6th of April (at $196 on QQQ). A much larger and quicker bounce than the S&P500. So let's dig into the few companies that are driving all of this "growth" ... Post 8/

For starters, it's important to understand the market share of the few companies I'm going to talk about here. These businesses are sucking the competition into their black hole at an accelerative pace, just look at this crazy graphic. ... Post 9/

So let's look at the momentum of a few of those companies. Microsoft (MSFT). Turned red on 11 March at $153, and turned green only a few weeks later (3 April) back at $153 again. A very quick turn considering the circumstances in the world. ... Post 10/

How about Apple (AAPL)? Turned red on 19 March at $244, and turned green only a few days later (13 April) at $273. Again, a very quick turn considering the circumstances in the world. .... Post 11/

How about Amazon (AMZN)? It was red for only 2 weeks! .....Post 12/

Google and Facebook have similar characteristics. So what's my point? My point is, the markets are completely manipulated by global printing. At this point in the long term debt cycle, we are seeing technology eat the world. Further sustainment of these policies .... Post 13/

will only accelerate the consolidation we are seeing into these companies. So what do I think about other securities? Well, one of the biggest markets that have been manipulated for decades is the bond market. Do I think that'll continue to be the case? Yes, I do. .. Post 14/

But here's the problem for that market, I expect it to eventually become completely impaired due to government printing. I think people that invest in this space are truly playing a doctorate level game of finding a greater fool. I refuse to participate even though ... Post 15/

I know, the government will continue to bid the prices until the entire duration of yield is 0% globally. Because when this market fails, it's going to happen quickly, and all at once. If you think you can outpace it, ... Post 16/

then you are similar to a person who thinks they can build a house at the bottom of a valley that has a dam with severe cracks above it. Finally, let's talk about currencies. As the dollar gets stronger and stronger, it only enhances the demand for deeper & more robust ..Post 17/

government manipulation and debasement (which further intensifies all the things previously mentioned). If you want to understand exactly what's happening, google "Cantillon Effect." The USD will continue to have this "strengthening" dynamic until something breaks. Post 18/

The break will either be complete social unrest (due to the overuse of QE and UBI), or through the natural transition to a different form of money (i.e. Bitcoin, a new gold standard, or some SDR that can somehow miraculously impose a peg to domestic fiat). Post 19/

Even if social unrest happens first, it'll still result in the need for a new form of pegged currency to fix the situation we are currently experiencing. Based on that, I suspect Bitcoin has the highest probability of succeeding simply because it's the option none of ... Post 20

the governments want, but it's also the solution they can't easily stop, and it also poses a huge benefit for the first countries that would adopt it. Effectively, it imposes a "Tragedy of the Commons" situation for nation-state central planners and fiscal appropriators. Post 21

I think it's very important for people to keep an open mind. In 1929 through 1933, the US went through a great depression, but they did so with a pegged currency. This is different. We have no peg (globally too) and we have a trend of bureaucrats recommending... Post 22

intense corporate bailouts, helicopter money for all, and municipality bailouts on the horizon. That's why I think the range of potential outcomes in the "stock market" is truly something that looks as ludicrous as this chart. Remember these indexes do not represent the.. Post 23

reality of the REAL economy - and I think everyone knows exactly what I'm talking about. Go through any small town you'll quickly see the impacts of decades-long inflationary monetary policy and the price deflation it creates. Post 24

So based on these manipulated markets, here's my conclusion:
1. I like Bitcoin (& I like gold until the start of 2021)
2. Bonds totally suck
3. A few stocks will work - most won't
4. Commodities will be insanely volatile

Post 24 //End of Thread

Am I surprised? Of course I'm not surprised. I've got the same opinion since posting this chart in April.