I bought a decent amount (for us) of crypto in late 2021 (“bad” time) and held it through the whole bear market and next bull market, until last Tuesday when I decided to sell it hours before President Trump’s threat to kill 90 million people in Iran.
4 years isn’t that much time spent in “the market.” It still seems clear to me that it’s not a very rational endeavor. I sold because it seemed like the president was threatening to destroy 90 million people with nuclear weapons. Thought now is the time to take out and have cash on hand.
He didn’t do that (I still think he’ll escalate, and sooon), and who knows if he was every actually going to, and the stock market goes up.
There seems to be a legitimate concern that we’re entering into oil supply shock with the fallout of the blockades in the Strait of Hormuz. Not just oil, but fertilizers, helium, natural gas, etc. Inflation tripled month over month from February to March.
What do I know, but all of these details taken together in no way make me think that the S&P should be touching all time highs. Isn’t “smart money” supposed to act smart at some point?
The alternative here is that I have a backwards understand what “smart” should look like in this situation. It makes no logical sense to me that you’d have all these circumstances and even if the war ended today that there wouldn’t still be a massive ripple. So, take it for granted that I have a limited understanding of all this, therefore maybe I should have just held onto my position and not sold.
I still think I made the right call for what smart people I listen to say is happening, and more importantly is coming, but in the short term it doesn’t appear obvious to me that I did.
There’s no great virtue in chasing the stock market, or the weekly Bitcoin charts. My plan was always to buy and hold.
But the stress of potential use of nuclear weapons in Iran, the changing world order, and a potential energy crisis made it feel more appealing for me to pull that money out and put it in the bank, even at a loss.
In this note, mostly I mean to say that rationality is only so useful when the world seems to more and more operate on chaos. What would make the market continue to go up like this when chaos is the lowest common denominator? Insider information. Denial of reality on the ground. Last days of the empire.
As I see more evidence of my world view being validated, I will add it here (joke but also serious).
John Mearsheimer:
Supply shock, demand destruction. Can’t replace 500 million to 1 billion lost barrels of oil.
Just feels like we’re late January/early February 2020 right now:
Doesn’t look good for the “war is over” crowd, aka the US stock market:
Reminiscent of daily COVID press conferences regarding wins in the context of very low expectation-times: