Down goes the Dow

BREAKING NEWS: Hussman Strategic was actually up yesterday. No lie - Up 0.17%.

Better strike while the iron's hot.

I'm wondering if this new drone warfare era we just entered is going to change investing.

Anyone with a few thousand dollars can build a fleet of drones to attack really anything. There's no protection from drones anywhere but the most hardened military/political spots.

What's to stop 10 drones from blowing up the Olympics? Superbowl? Presidential inauguration?

I'm seriously thinking we are sleepwalking here. Millions of angry religious young men are watching UKR blow up actual tanks with drones and thinking they can play that game too.

I think we're sleepwalking during this new unprecedented threat. The world is churning in a very bad way right now, making now a worrisome time for investing during geopolitical threats.

Suggests owning volatility might be a good idea, esp because it is so cheap. Something that would balance off losses after a bad terror attack.

How do own volatility? I suppose it's some derivative of the Vix, but just guessing.

yeah, the VIX is the easiest, via VXX or an equivalent, but also puts.

for example.

there's a fund, TAIL, that is supposed to be a way to insure against black swan events like 911, like I'm worried about. It owns puts and treasuries, thinking both would rise in value should there be a big accident in the world. The fund has done horribly because treasuries did not rise in 2022 when stocks fell. The fund relies on the opposite happening.

And of course puts have also not worked as the market has risen.

But that could change in an instant...and these current higher interest rates + lower cost of volatility could work better for the fund than the old 'low interest rates and expensive volatility/higher VIX)' regime worked. You are still getting the interest from treasuries after all all.

high yield defaults appear to be around 3% now, not 6%. But I'm not completely sure. Anyway. bond spreads are among the lowest in recent history so there's no stress in high yield land.

Danielle DiMartino Booth
@DiMartinoBooth
“With the strong uptrend in defaults over the past six months, and the Fed keeping interest rates at elevated levels, the HY default rate could reach 6% by the end of 2023.”
@apolloglobal

9:49 AM · Aug 26, 2023
·
43.6K
Views

This guy was calling a top in tech 8 months ago.

tech is up another 18% from this tweet.

Richard Bernstein Advisors
@RBAdvisors
Remind me again how “this time is different”…

3:00 PM · Jun 12, 2023
·
9,467
Views

To play Gente's game...

It was 60 years ago today?

She Loves You at JFK.

New highs for SP500 and NASDAQ.

Falling RV prices :-)

Went to college with him, btw.

and I love the comments to his twitter post:

In the build up to the Tech Bubble companies spent large sums of money in preparation for year 2000 and internet commerce. It took years for the later to be profitable. I see something similar in AI, to what extent remains the unknown.

And of course, the internet changed everything. Was their money misspent? Of course not.

I get it that many small companies did not survive, Or they were bought up. I lived through that and I remember that a common theme (though not the only strategy by a long shot) was to buy the industry leaders. Like Apple, Cisco, Amazon, Google, etc. Turned out to be an epically good idea.

And if you want to know how long it will take to be profitable, Nvidia announces earning Feb. 21, so stay tuned. But they have already been recording record profits. Companies are investing now. They can't wait. Same with the cloud computing, cyber security, etc.

This is the late stages of the tech cycle, not the initial ones. Very different.

I am betting all the AI good more than priced in.

I think the same thing every time I hit the buy button on the likes of Nvidia, almost daily.

Like this morning at $691, (now $698).

But for as long as I've been thinking this, it just keeps going up.

question for the brain trust:

I just put in a limit order for an ETF that tracks an index.

With a stock, the trade executes when a seller emerges willing to sell at that price (forget the bid/ask differential for reasons of simplicity).

But an ETF price is supposed to be tied to the value and movement of the index it is intended to track.

So will my limit order execute when a seller emerges for the agreed upon price or when the underlying index drops that relative amount?

I just read up on the difference between price and NAV but can't get my head around this.

How about a little help here, what do ya say?

Pennies away from that bad boy executing and it just won't budge no matter how many times I slam my iPhone on the table.