In The Long Run

That’s fine, that’s the narrative, “stocks in the long run….”

That’s what people say, after the fact. Well done, you too have a career in sports hot-take land. Except, during that period…

  • The money could’ve gone somewhere else productively.

  • You now have 80% (100 minus 20), do you have a cash cushion to weather this?

  • Even if the answer is yes, how long will you need to wait to get back to 100?

  • Mean reversion? Tell that to the smartest guys in the room, the physicists (they’re positively weird, it’s like they landed on Earth from a spaceship, really). Anyways, they’re gonna tell you that there is no chance this is wrong.

  • What we can certainly observe is that curve on the right? Flatter now (standard deviation higer), and that the speed at which it is changing has increased. This is not good for the denominator, and risky assets have depended on the stability of the denominator.

  • My reaction to people that are fixated on the numerator, from the beginning (click to watch).

While I am not in the business of predicting the future, this person is, and more than direction, watch what he said during the last 2 minutes.