Ghost of Igloi wrote:
No my logic is phony markets driven by algorithmic models that read failed trade news and monetary stimulus as good are doomed to failure. Those that trust the future to this nonsense will act surprised when things deteriorate. Nothing changes except the detail of the narrative that catches the greedy imagination.
What will be the specific mechanism of failure, precisely when will it occur, and how deep and how sustained will the failure be?
Those pennies I have picked up in front of the steamroller over the past decade have really added up. Even if I got caught all-in for a 50% drop (which will never happen), I would have done very well.
If you can’t say exactly when, then your planning horizon is too far out. I go seasonally and fed-cyclically, both of which are relatively short and perfectly defined. The election is also perfectly defined, but still too far off for me to plan around.
If you cannot say when, you should think about answering the question “when not”—ie over which time-frame will a collapse not happen? For me, this time-frame changes, and is now out to the start of next year. It is steady as she goes policy-wise, and EOY liquidity is flowing. Nothing will happen until EOY settlements are all cleared, which could take us to mid-January.
Is there no time-frame over which you believe it will not happen? How about a day? 3 days? A week?