Little thread for this glorious Sunday:
We likely seen an increase in demand (not just the quantity demanded), shifting the demand curve out.
An increase in demand with supply unchanged rises prices.
...
/1
We likely seen an increase in demand (not just the quantity demanded), shifting the demand curve out.
An increase in demand with supply unchanged rises prices.
...
/1
But how long the increase in demand lasts determines how much and how long inflation persists.
COVID hits more than 2020. The impacts are far reaching and multi year.
But, it does end. Normalcy does return.
...
/2
COVID hits more than 2020. The impacts are far reaching and multi year.
But, it does end. Normalcy does return.
...
/2
How much non normalcy any investor can tolerate is personal. Less tolerant = less exposure.
Answer for yourself, "has the world's consumer base permanently changed its demand curve or is it non permanent?"
Then answer "for how long?"
...
/3
Answer for yourself, "has the world's consumer base permanently changed its demand curve or is it non permanent?"
Then answer "for how long?"
...
/3
This is your guiding light for your own expectations and therefore the guiding light for your own rationale decisions.
It isn't based on being right, it's based on what you believe is right.
Belief system --> rationale action.
...
/4
It isn't based on being right, it's based on what you believe is right.
Belief system --> rationale action.
...
/4
As for *my* belief system, I already wrote it above.
"Normalcy does return."
Further, I think we see a considerable easing of demand within the first two quarters of 2022.
...
/5
"Normalcy does return."
Further, I think we see a considerable easing of demand within the first two quarters of 2022.
...
/5
But that's my belief system, so my rational action is to hedge some risk until then, knowing full well that a hedge (or hedges) is a fancy finance word for insurance.
Just like auto, home, health, life insurances...
...
/6
Just like auto, home, health, life insurances...
...
/6
... I expect to pay for it and in net, lose from it. But I sleep better knowing the damages I could face for auto, home, health, and life are protected, and I happily pay for that better sleep.
...
/7
...
/7
Insurance companies are profitable because they provide reduced risk exposure and for that they receive their own edge; consumers pay more to protect damages of risk than the damages on average, will cost.
I sleep better with insurance.
...
/8
I sleep better with insurance.
...
/8
In the market, I'm less risk averse, until I'm not. Now, I'm hedging, expecting to lose on average on the hedges but also sleeping better.
...
/9
...
/9
In the long term and persistant for the 22+ years I've been in finace, there appears to be, from my rather biased and insular view, far too much focus on earnings season today and far too little on earnings season in three-years.
...
/10
...
/10
But that's my opinion. Have your own and acting rationally on that opinion.
Then honor yourself and your decisions. You are the protagonist of your life. Treat yourself like the shining star that you are.
...
/11
Then honor yourself and your decisions. You are the protagonist of your life. Treat yourself like the shining star that you are.
...
/11
Things feels more important in the present than it is and things feel less important in the future than they are.
It's a wonderful, natural bias we all have. Celebrate the bias, then gently move it the side, and act with that bias honored, and with rational decisions.
/12
It's a wonderful, natural bias we all have. Celebrate the bias, then gently move it the side, and act with that bias honored, and with rational decisions.
/12
• • •
Missing some Tweet in this thread? You can try to
force a refresh
