Thread by @titanvest

1/ Over the past week we've received a record amount of inbound questions from new investors about what's going on in the markets.

The most important one in our view is what the path looks like *going forward* coming out of this past week's events.

👇 A QUICK THREAD:

2/ First of all, this is not a one-time event. A paradigm shift has occurred.

What we're witnessing is not something that just suddenly emerged over the past week, but has rather been brewing beneath the surface for years, driven by decades of pent up frustration.

3/ To borrow a term from public policy, we believe the "Overton window" has shifted on investing.

Everyday investors are fed up with being shut out and are demanding the seat at the table they've been denied for decades, one we've been trying to offer since our founding.

4/ Today's environment inevitably will draw comparisons to the short-lived trading zeitgeist of the late 90s, but we think those comparisons fail to appreciate the profound impact of widespread access to "free" trading of vanilla stocks, and more importantly, stock options.

5/ So what can investors do in light of this new paradigm? 🤔

What we've been doing firm-wide is paying eagle-eyed attention to *second-order*, or ripple-through effects.

6/ The stock market is rarely a static story about isolated moves, and fund flows increasingly dictate the direction of all stocks.

Ripple-through effects stemming from large flows in one corner of the market can create ripe hunting grounds for the rare "free lunch" elsewhere.

7/ These second-order opportunities often come in the form of "fallen angels."

Last week, as the market rotated en masse out of quality and into out-of-favor themes, some of the world's best businesses effectively went on a flash sale.

8/ Many of those names are now up 10-20% over the course of days, implying *hundreds of billions* of dollars of value fluctuation on no fundamental news. 🙃 Many of our clients seized on this opportunity to size up on their contributions in long-term, tax-advantaged accounts.

9/ These opportunities can also come in the form of "holding period acceleration" for names that get swept up in with the rising tide of flows.

There are many stocks with elevated short interest outside of the "most shorted" lists that benefitted from short squeezes elsewhere.

10/ We saw this with one of our Opps investments $APPN, a stock that held short interest that was modest, but still elevated relative to the rest of the SaaS space.

The rising tide enabled us to close this position much earlier than we expected at ~400% of our initiation price.

11/ We still love the low code theme and would have loved to hold on to that one for years, but sometimes the market gets a little ahead of your own best case projections, and as fundamental-driven investors, we act accordingly.

12/ Stepping back, we encourage all investors to remain vigilant and flexible during these volatile times.

Some of the greatest opportunities in markets arise during paradigm shifts before they're recognized as such, and we intend on being on the front end of this one.

13/ (As always, you can find our full disclosures here: titanvest.com/disclosures/)