ANSWER:Why did markets crash?
A lot of people try to appear as if they know it all. Their unwise banter often kills the mood for me at cocktail parties. This is why the double inversion is silence. Imagine someone with my insight remaining completely silent at the cocktail party while the so-called expert talks about stocks—hilarious!
She still knows—she being Mother Nature or the market mistress.
Because she knows, it is the root cause of why controllers are so frustrated and why many of your favorite billionaires end up in scandals. They are accustomed to trying to control and conquer people but have not focused on a crucial curriculum: the conquest of nature.
Han Solo recounts his tales of the Kessel Run in 12 parsecs with a Wookiee, and ‘she’ loves it.
KESSEL RUN : I’m the one that did 7 trades on Bloody Sunday and Black Monday with positive ROI.
A recreation of the Kessel Run depicts the draconian Empire attempting to force rebels into submission. Yet, Han Solo defies time and space, and ‘she’ loves it.
The conquest of fundamentals is an attempt to conquer human behavior, while the conquest of technicals is an attempt to control people through a sort of technical “religion.”
There is no single fundamental or technical factor that can influence 100% of an asset’s performance in the futures or stock market, whether in the long or short term. This is why active managers focus on a wide range of macro, micro, and technical elements, hoping that today might be their lucky day (70%!?).
Public markets are entirely probabilistic. This subjective nature is embedded in PE ratios and multiples, which do nothing more than amplify the probabilistic nature of the asset under scrutiny.
Consider the small- or mid-cap value investor who claims their edge lies in uncovering an underappreciated “story” with GARP or CAPM-like elements. They argue that the asset is undervalued due to a lack of coverage and suggest that once real price discovery occurs, transparency will prevail—or perhaps it never will. When the stock is upgraded to the S&P 500 and gains more coverage, the price may drop, and analysts scramble to rationalize the causes—yet none are ever 100% certain.
They work their syndicates, pods, and pools, all claiming to have conquered the markets, when in reality, they have only tried to conquer people. The ‘boys’ club’ belongs in the gentlemen’s club; I suppose because ‘she’ doesn’t love it.
Just like your consultant, banker, or private equity advisor, they take you down the rabbit hole, discussing controllable or uncontrollable fundamental inputs that, ironically, exist within an ‘uncontrollable’ public equity market. A year later, you wake up to find yourself either up or down, courtesy of the same NVDA 0.00%↑ “magic,” with your fate tied to spurious correlations, all of which somehow shaped an entire career as an analyst or advisor.
Very few can achieve the feats we accomplish at scale, in bulk, and with compounding, nor come remotely close to matching our ROI. This is because there are very few ways to explain the market at any given moment with even 70% accuracy. Reflect on last week’s market collapses and consider the causes you were given.
Even today, you may not fully understand why it happened. If you insist that you do, you are likely doing so with exaggerated confidence. This indicates that the fundamentals of whatever occurred cannot be 100% the cause. Is it 100% due to carry trades, 100% due to growth scares, 100% yields or a mix of everything? How much did each factor contribute, and what is the attribution?
This is why every email I send is highly significant. It explains nature in a fair and probabilistic manner. This is the trumpet of the counter and the scientific method, which embraces Karl Popper’s concept of falsification. It is falsification that defeats dogma and accelerates the pursuit of knowledge through wisdom.
Having said that, we have prepared 2-3 ideas to generate a:
+20% ROIC Tomorrow
