What is logical thinking in stock market?

Posted on September 29, 2025 by Alan Solomon

The Simple Question That Isn’t

Ask ten people, “What is logical thinking in stock market?” and you’ll receive ten tidy slogans. Logic as arithmetic. Logic as calm. Logic as emotion switched off. The reality is harder: logic is a scaffold you build before the storm, a way of seeing through noise that anticipates your own blind spots. It’s not coldness. It’s a commitment to update beliefs quickly when facts move, and to protect future you from present you.

Logic in markets must coexist with a wild, social creature: the crowd. Prices are a pulse of need, fear, and position, not just discounted cash flows. Logical thinking tolerates this contradiction. You respect emotions in others as raw data, while refusing to let your own write the plan. That is the first paradox worth keeping close.

The Bridge from Idea to Tape

Good reasoning in life often looks like patience, clean hypotheses, and graceful error correction. Those traits travel intact into finance. The investor’s version: write conditional statements you can obey, size risk so a bad morning is survivable, and accept that timing is messy. Logic here is not about certainty; it is about consistent advantage under uncertainty.

Traits that matter most—humility, discipline, timing, adaptability—sound moral. In markets they are mechanical. Humility means you test, not preach. Discipline means you obey a stop, not your pride. Timing means you anchor to signals, not hunches. Adaptability means you retire a once-great idea the day it stops paying rent.

Working Definition: Logic as Process, Not Pose

Logical thinking in markets is a process with four parts: base rates, evidence, probabilities, and pre‑commitment. Base rates say what usually happens; evidence says what is happening now; probabilities price the gap between those; pre‑commitment stops your mood from rewriting the plan mid‑trade. If any piece is missing, the result isn’t logic. It’s costume.

Translate that to the desk: list the facts that matter (cash flow, unit economics, credit spreads, breadth, currency trend), map them to likely states, then act only when the state shifts in your favour. And write it down, because memory pads results and deletes regret.

Evidence Over Anecdote

In calm times, stories feel like evidence. In stress, evidence reclaims the stage. During March 2020, U.S. Treasuries—normally the shock absorber—were sold for cash. The signal wasn’t a headline. It was the plumbing: funding stress, spreads gapping, a USD spike. Logical thinking recognised a system issue, not an earnings miss, and scaled entries only when the dials eased: spreads tightened, the dollar softened, and breadth stabilised across sectors.

In a single name, evidence is simpler and just as strict. If customers renew, gross margins hold, and cash conversion stays clean while the price falls, you have mispricing born of fear. If those lines break while price rises, you have a narrative carrying empty buckets. Logic says trade the lines, not the feelings.

Probabilities, Pay‑offs, and Time

Expected value is not a formula for exam halls; it’s the only sanity check that scales. If gain × probability minus loss × probability is positive, and the worst case won’t break you, you take the bet; if not, you pass. Logic also respects clock time. An idea can be right and unpaying for too long to matter. Set time stops: if X and Y haven’t improved by day ten, reduce or exit. Waiting is a position. Price it.

Example with money. A high‑quality USA stock flushes to $240. One‑month $200 puts price at about $9. Selling ten cash‑secured contracts collects $9,000 while reserving $200,000 for assignment. Either the stock holds above $200 and you keep the income, or you’re assigned around a $191 effective basis on a business you wanted anyway. That’s probability married to pay‑off and calendar—logic expressed as cashflow rather than quotes.

Mapping Interactions, Not Lines

Markets are not single‑variable toys. They are fields where rates, the USD, credit, volatility, and positioning interact. Logical thinking draws that map before it draws a conclusion. A rally with high‑yield spreads widening and a firm dollar is tinder, not kindling. A sell‑off with spreads cooling, a re‑steepening volatility curve, and multi‑sector breadth improvement is oxygen returning even while headlines still hiss. You’re not calling bottoms. You’re diagnosing state changes.

Edge dynamics matter. Dealer gamma can flip a calm market into a chase, with market makers selling into down moves and buying into up moves, amplifying direction. ETF arbitrage can snag in stress. Futures basis can misbehave. Logical thinking pays attention to these pipes because they translate sentiment into force. If you can name the mechanism, you can price its risk.

Design Rules That Outlive Mood

Most damage happens when we trade our plan for a feeling. Logic prevents that by writing a plan in daylight. Keep it on one page. Thesis in a sentence, three disconfirmers, an entry checklist, exits by price and time, position caps, theme caps, and a maximum daily loss in USD that forces you to stop pressing when your pulse is high. Add friction to action: two‑step order confirms, after‑hours barred unless pre‑authorised, position size pre‑set before the bell.

Then run a weekly error audit with two buckets: “saw but didn’t act” and “acted but didn’t see.” For each, write the rule that would have blocked the mistake, then add it. Scars become antibodies. This is the boring magic that pays for your future curiosity.

Sizing and Survival

Logic isn’t brave. It’s durable. Cap single‑name exposure at 1–2% and theme risk at 6–8%. Hold cash without shame; it’s an option you own outright. If implied volatility is elevated and you want exposure with defined downside, buy long‑dated calls with sensible deltas instead of full cash equity, acknowledging your timing limits and buying a calendar for the thesis. None of this is exciting. All of it is oxygen.

Protect the downside in real time. Fix a hard stop per day in USD. When it trips, you stand down, not because you’re timid, but because you respect the physiology of stress. Logic says your brain under adrenaline is not a trustworthy partner.

Timing Without Theatre

Stop trying to be a prophet. Be a witness with rules. For entries after damage, demand a modest choir: multi‑day spread compression, a softer USD, a volatility term structure that stops growling, and leaders that break out on rising volume and hold on the retest. For exits after a run, watch for narrowing breadth, a flat or frowning vol curve, and index highs carried by fewer names. Trim, hedge, or wait in cash. If evidence changes back, you can always press again.

In trend trades, the same spine applies: add on strength when the market pays you to be present, not on weakness that flatters your ego. Scale out into euphoria before it tries to invoice you for hubris.

Case Notes: How Logic Felt in Real Time

2008: Buffett’s Goldman Sachs preferreds plus warrants were not heroics; they were pricing power amid desperation. Logical thinking asked: will the USA backstop core finance? If yes, what securities pay best for that view with downside cushion? 2018: a hawkish misstep cracked risk; a pivot restored spreads; the best entries came while the narrative still shook. March 2020: forced selling sprayed across assets; the first signal wasn’t brave tweets, it was funding easing and spreads cooling—buy lists activated while headlines were still apocalyptic.

2021–22: a narrow USA AI rally began as a small crowd skating ahead of earnings; breadth widened later; early logic said “own leaders, not laggards,” and add only as participation broadened. Edge cases: negative oil in April 2020 was storage mechanics, not the end; meme squeezes were options reflexivity, not miracles. Logic named the forces, priced their half‑life, and refused to become their volunteer.

Intuition, Rehabilitated

Intuition gets a bad reputation in markets because it’s often a shawl for bias. Keep it, but put it to work. Intuition should be a fast detector for pattern mismatches that your rules then test. If your gut whispers that leadership is shifting, you don’t buy on gut. You run the dials: are leaders underperforming on up days? Is volume thinning on breakouts? Is breadth narrowing? If the answers are yes, your rules already know what to do. Intuition becomes a scout, not a king.

The Final Loop: The Question, Answered Cleanly

Back to the start: What is logical thinking in stock market? It’s not a personality. It’s a method that treats reality with respect: base rates first, current evidence second, probabilities and pay‑offs next, pre‑commitment last. It is empathy for your future self, written as rules your panicked self cannot edit. It turns risk into a budget, noise into a filter, and hope into a sentence you can complete with numbers.

The small detonation at the end is this: logic is not the enemy of emotion. It’s the shape you give emotion so it does its job—alerting you to danger and opportunity—without driving the car. When you write and obey that shape, you stop blurring decision and identity. You stop paying for drama. You start collecting quiet wins that compound in USD while the room argues.

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2025 Stock Market Forecast and Trends: Rates, Earnings, and the Next Leg of the Cycle

Posted on September 3, 2025 by Alan Solomon

The Year That Asks For A Clean Map

Forecasts promise clarity and deliver temptation. The question looks simple—what comes next for rates, earnings, and the cycle?—but it carries the usual traps: overconfidence, selective evidence, and a need to sound certain when the tape is not. A good 2025 Stock Market Forecast and Trends isn’t a prophecy. It’s a disciplined map with prices attached to every “if.” It asks you to name the dials that matter, the ranges they can live in, and the actions you will take when those dials turn together.

That map has a rhythm. Growth pulls, inflation nudges, policy leans, and the crowd overreacts. Logical investors don’t fight the rhythm; they mark where rates, earnings, and sentiment reinforce or cancel each other. This year is a negotiation between disinflation that wants to cut yields, capex booms that want to lift earnings, and a nervous crowd that still remembers how quickly depth can vanish when headlines scream.

From Life To Tape: Patience, Timing, Revision

Any sound plan for a year behaves like a good decision in life: patient with setup, sharp on trigger, and willing to change when the facts do. 2025 asks for exactly that. Patience, because data will zig in monthly bursts. Timing, because the best entries arrive while narratives are still messy. Revision, because the first idea is often the cleanest and the most wrong. The bridge from principles to portfolio is built with conditional statements and a refusal to improvise under stress.

Translate that into rules. If credit spreads tighten for days while the dollar softens and the volatility curve re‑steepens, you scale risk. If spreads widen, breadth narrows, and real yields bite, you cut or hedge. You’re not reading tea leaves. You’re reading pressure in the plumbing and acting when the system makes sense.

Rates: The Gravity Under Valuations

Rates are not a backdrop. They are the floorboards. By late 2024 the USA sat with policy near restrictive highs; 2025’s debate is about the slope of easing and the level where real rates settle. Use back‑of‑envelope arithmetic: if the equity risk premium is ~3.5% and real 10‑year yields run ~2.0%, a fair multiple clusters near 1/(0.035+0.020) ≈ 18×. Shift real yields by 100 bps and you swing the fair multiple by roughly 2–3 turns: at 1% real, ~20×; at 3%, ~14–15×. This is why a 25 bps surprise in path or persistence matters more than a thousand hot takes.

Translation: if disinflation holds and the Fed glides policy towards neutral, 10‑year yields around 3.5–4.0% and slightly lower real rates support high‑teens to ~20× on clean earnings. If inflation proves sticky, a 4.5–5.0% 10‑year with firm reals drags that to mid‑teens. Valuation is not a mood. It’s arithmetic fought out in the bond market.

Earnings: The Engine That Drowns Scepticism

Estimates for S&P 500 EPS into 2025 clustered in the $240–$260 range at the last broad survey, with upside if capex cycles pay off. The story under the headline is uneven. AI infrastructure continues to pull a wide supply chain—semis, electrical equipment, grid upgrades, specialised real estate. Services and software with genuine pricing power translate demand into cash quickly. Interest‑sensitive corners (small caps, long‑duration biotech) want lower funding costs and open refinancing windows.

Focus on what compounds. Revenue growth of 6–8% with flat to slightly up margins puts $250 EPS in reach; 10% revenue growth with modest margin expansion makes $260+ plausible. A soft patch that trims revenue to ~3–4% with mild margin compression drifts earnings back towards $235–$245. That’s your earnings triangle; now attach multiples from the rates section and you have a coherent fair‑value grid rather than a story.

Margins: The Quiet Battle For 2025

Margins decide whether flat revenue prints become growth or excuses. Watch three inputs. Wages, still firm but cooling—productivity gains from automation and AI copilots can offset 150–250 bps of wage pressure in administrative and engineering heavy businesses. Energy—higher power costs hit both data centres and heavy industry; contracts, fuel mix, and regional pricing matter. Mix—companies tilting to subscription, high‑margin software, or services rescue margins faster than those trapped in commodity pricing.

Evidence, not adjectives. If gross margins hold and opex grows slower than sales, credibility rises. If opex rises faster than sales “for strategy,” patience shortens. A clean 50–100 bps operating margin lift across leaders is enough to move the S&P needle even if the median business walks in place.

The Dollar, Liquidity, And Multiples

The dollar is a valuation machine disguised as a currency. Rough rule: a 10% USD appreciation shaves 3–5% off S&P EPS; a 10% drop adds a similar tailwind, particularly to mega‑cap exporters, software with global seats, and staples. Rates differentials and global growth drives the USD path; in 2025, any faster USA easing than peers biases the dollar softer, a quiet friend to earnings and multiples. Liquidity conditions—Treasury issuance mix, reserve balances, bank credit—affect how much the market pays for each dollar of earnings. Watch dollar indices and high‑yield spreads together; softness plus tightening spreads is the tape’s way of saying: “We can pay a bit more.”

Breadth: Leadership Or Fragility

Concentration can be healthy—strong franchises deserve to lead—but it gets brittle when breadth decays. A wide advance with multi‑sector participation allows valuation to stretch without snapping. A narrow climb carried by fewer names invites air pockets. Your 2025 bias should be simple: own leaders that lead on both green and red days, but demand breadth to add. When breadth thrusts arrive—surges in advancers, up‑volume overwhelms down‑volume—rotate some gain into quality cyclicals and mid caps that benefit most from declining rates and better credit.

Three States, One Playbook

Soft landing. Inflation keeps easing; policy drifts down without drama; earnings run $255–$265; real yields trend lower. High‑teens to ~20× supports strong returns, led by quality growth, AI supply chain, and industrial enablers. Small and mid caps catch a bid as financing costs fall. Fair math: at $260 and 20×, you’re paying for $5,200 on the S&P—adjust from there, but treat it as arithmetic, not a prediction.

Bumpy glide. Inflation wobbles; policy cuts are halting; earnings $245–$255; real yields sticky. Multiples 17–19×. Rangebound markets with violent rotations. You make money by buying dips into confirmed breadth and credit improvement and trimming when the vol curve frowns.

Hard brake. Growth falters; earnings $220–$235; spreads widen; policy scrambles. Multiples 14–16× until policy and credit stabilise. Your first job is defence: cash, staples with cash generation, healthcare with real demand, and time‑boxed probes into leaders only when the dials show oxygen returning.

Signals That Decide The Year

Five dials, every morning: breadth (advancers/decliners, up/down volume), credit (CDX HY trend, cash‑bond tone), USD and real yields (direction and pace), volatility term structure (is near‑term fear dearer than the back?), and leadership quality (do leaders hold gains on red days?). A sixth dial—dealer gamma—tells you whether the street is damping moves or accelerating them. When these sing together, you act. When they hiss, you wait.

Concrete: multi‑day high‑yield spread compression + a softer USD + a re‑steepening VIX curve + breadth thrusts across sectors = increase risk. Widening spreads + firm USD + a flattening vol curve into strength + narrowing leadership = reduce, hedge, or stand aside. Simple, not easy.

Positioning With Rules, Not Nerves

Barbell exposure. Keep core in cash‑generative leaders with enduring moats—semis tied to datacentre build, software that turns seats into cash, select platforms with pricing power. Pair with industrials and electrification plays that ride grid upgrades, transmission hardware, and efficiency retrofits. Add a measured sleeve of small caps when credit eases; they have the most to gain from lower rates and open windows.

Execution tactics. Stage entries in three tranches; never all at once. In volatility spikes (VIX > 25–30), sell cash‑secured puts on names you’d love to own; let fear pay you USD to wait. Reinvest a slice of premium into 18–36 month calls (sensible deltas) to buy time for thesis expression without guessing the day. Fix a maximum daily loss in USD that forces you to stop pressing when your pulse is high. Put exits on paper: by price and by time. Waiting is a position. Price it.

Margins Of Safety You Can See

Survival buys you options. Cap single‑name risk at 1–2% and theme risk at 6–8%. Hold some cash—call it the right to choose. Avoid businesses with 2025–2026 maturity walls and no free cash to meet them. Prefer firms whose opex rises slower than sales and whose gross margins didn’t need acrobatics to hold up. If the dollar breaks lower and credit breathes, feel free to expand risk. If not, keep your powder dry. 2025 will offer multiple windows. You only need to pass through a few with size and calm.

Microstructure: When The Floor Thins

Be suspicious of rallies that flatten the vol curve—front‑month implieds refusing to relax means hedgers are paying up for near‑term cover. Watch ETF NAV dislocations in stress; small gaps tell you the arb is stepping back. Pay attention when futures basis snaps; it’s a sign the easy liquidity is gone. None of this is mystical. It’s a practical way to avoid donating exits to a crowd that only realises the floor moved when their orders slip.

The Next Leg Is A Behaviour

The next leg of the cycle won’t arrive with confetti. It will look like three mundane things happening together: a few months of cooler real yields, a few quarters of honest cash generation, and a few sessions where breadth grows teeth. Your edge is not prophecy; it’s obedience to a plan that respects those mechanics. And yes, you’ll be early on some entries and late on some exits. That is the fee. Pay it gladly if the process is intact.

The Final Loop

Rates, earnings, and cycle sound like separate subjects. They’re one machine you watch from different angles. The strength this year comes from treating that machine without romance: write your ranges, tie them to actions, and let the tape confirm your bias before you spend it. Forecasts feel clever; conditional plans compound.

The small detonation to carry with you: the smartest 2025 Stock Market Forecast and Trends isn’t a view. It’s a promise you make to future you—that you will act when your five dials harmonise and refuse when they don’t. That’s how you turn noise into cash, drama into discipline, and a calendar year into something that adds up in USD while everyone else debates adjectives.

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Building Wealth with No Money: Skills, Systems, and Smart Cashflow from Zero

Posted on June 15, 2025 by Alan Solomon

Building Wealth with No Money: Skills, Systems, and Smart Cashflow from Zero

Start empty. No nest egg, no lucky uncle, no early stake. It sounds bleak until you see the pattern: wealth seldom begins as capital; it begins as process. When pockets are light, the assets you can grow are attention, skill, and trust. These are invisible at first, then suddenly obvious, like cloth drying on a line—nothing for a while, then fit to wear. The first discipline is simple and hard: build loops that turn time into cashflow and cashflow into choices. That is the entire game at the start.

The phrase Building Wealth with No Money sounds like a riddle, or worse, a trick. It isn’t. It is a method: pick scarce problems, ship small solutions, and stack repeatable wins until capital appears. No myths. Only compounding that begins in behaviour before it ever touches a brokerage account.

The Bridge: From Skill to Cashflow to Capital

Skills are cashflow with a lag. Systems remove the lag. Markets pay when your loop produces value with a cadence other people can trust. What looks like luck is usually a reliable pipeline: prospecting on Monday, delivery Tuesday–Thursday, review Friday, improvements over the weekend. The psychology is the same as in trading: clear entries, clean exits, and a journal that hunts your worst habits to extinction.

Adaptability matters. Timing matters. The first cheques are small and fragile; the first clients are nervous; the first dozen outputs wobble. That wobble is your apprenticeship. Treat it like a backtest: keep what pays, kill what doesn’t, and push size only when the signal survives stress.

Asset One: Scarce Skills That Bill

Zero cash does not mean zero edge. Pick skills that meet three tests. They save money, make money, or save time for people who count minutes like dollars. Examples that travel: research that distils chaos into a one‑page brief; writing that sells without perfume; light data work that turns messy spreadsheets into decisions; basic scripting that automates drudge tasks; sales calls that close politely and fast.

Two‑month sprint model. Week 1–2: deliver five free samples to real operators (not friends) in exchange for blunt critique and a testimonial if earned. Week 3–4: charge USD $250–$500 for tightly scoped work, capped by time. Week 5–8: lift price, narrow scope, and offer a monthly cadence. The goal is not grandeur. It’s a pipeline that can hit USD $1,500–$3,000 per month within a quarter. From there, you can buy time to build larger loops.

Asset Two: Systems That Don’t Flake

Ambition without a calendar is fiction. Build a simple cadence that survives bad days. Daily: two hours of outreach or inbound creation; two hours of delivery; one hour of product improvement. Weekly: a review where you catalogue what paid, what failed, and one adjustment for the next sprint. Monthly: prune low‑margin work; raise rates on scope you can deliver in your sleep; design one new productised offer that shaves delivery time by 20–30% without lying about outcomes.

Systems turn willpower into routine. They are boring by design. Boring is the point. Boring is reliable. In markets we call this a rulebook. In life it is the same thing—guardrails that keep your future self from being robbed by your current mood.

Asset Three: Networks That Actually Pay

Mentorship is time travel if you choose the right guide. Seek three kinds of people: a cynical operator who will puncture your fluff; a generous peer who shares leads because your work makes them look good; a former client who will say the quiet part and tell you why prospects hesitate. Ask for paid trials, not favours. Charge small, deliver fast, ask for a referral only if the outcome was clean. Credibility is currency; you mint it by keeping small promises on schedule.

Building Wealth with No Money is not isolation. It is strategic interdependence. You give value without theatre; you ask for outcomes without apology; you walk away from vague briefs that smell like excuses. That stance compounds faster than any hustle culture slogan ever sold.

From Cashflow to Capital: Turning USD into Engines

Once you have a modest surplus, the market becomes more than a spectator sport. You do not chase fireworks. You buy time and sensible convexity. Concrete example: a high‑quality USA company trades at USD $240 during a scare. One‑month USD $200 cash‑secured puts pay $8–$11. Sell ten contracts, collect $8,000–$11,000, and reserve $200,000 for assignment. If price holds above $200, you keep the income. If assigned, your effective basis is roughly $189–$192 for a business you wanted anyway.

Take a slice of that premium and buy 18–36 month calls (sensible deltas, 0.60–0.75) on the index or the same name. You’re admitting you can’t pick the day of the turn and buying calendar so the thesis can breathe. This is the same loop as the skill business: cashflow first, then asymmetric exposure with controlled risk. Never with borrowed money. Size positions so a wrong week is a bruise, not a stretcher.

Time Arbitrage, Attention Arbitrage

The market pays those who show up where others are absent. Nights and early mornings are quiet waters for outreach. Unpopular niches are less crowded—B2B plumbing, compliance summaries, procurement checklists, field‑service scheduling. The glamour premium in popular arenas is a tax; you can decline to pay it by picking problems without parades.

In investing, the analogue is simple: buy fear, sell euphoria, and sit in cash when signals disagree. You earn by being present when the room is loud for the wrong reasons and absent when it is loud for no reason at all. The discipline is the same whether you pitch a client or place a trade: show up where attention is mispriced.

Risk Controls for the Broke (and the Proud)

When you start from zero, survival is alpha. Keep a three‑month runway as fast as possible—rent, food, and the bare costs of staying in the game. In the market, cap single‑name risk at 1–2% and theme risk at 6–8%. Fix a maximum daily loss in USD; if you hit it, you stop. In the business, cap client concentration; no single account should be more than 25% of revenue. Write exit criteria for clients the same way you do for trades: missed payments, scope creep, or abuse of your time triggers a polite goodbye.

Tools can be cheap and sharp: a calendar, a simple CRM, a basic accounting sheet, a sane broker. Avoid subscriptions that soothe ego and starve cash. Colour‑code your week; protect two deep‑work blocks daily. That’s your micro treasury function—custody of hours, not just dollars.

The Market as Teacher: Cycles in Work and Tape

Work has cycles. So does the tape. Early in the build, you push volume—more calls, more drafts, more small invoices. Mid‑cycle, you shift to quality—raise price, cut scope, and focus on clients with low drama and high repeatability. Late‑cycle, you husband cash, prune, and sharpen offers that sell well in slower months. In markets it’s the same: add when spreads compress and breadth improves; pare back when narrow leadership hides fragility; hold cash while your dials disagree.

Five dials for both worlds. Breadth: are you getting wins across several channels, or just one? Credit: are clients paying faster, and are spreads tightening in high yield? Dollar and real yields: currency and funding pressure change buyer mood and equity multiples—watch both. Volatility curve: tension in near‑term risk shows up in prices and in client tone. Leadership: which services or stocks hold gains on down days? When these sing together, you press. When they don’t, you wait.

Playbooks Under USD $1,000

Service product: turn a messy weekly task into a fixed‑price deliverable—board packs for small firms, hiring screens, vendor scorecards, compliance summaries. Charge USD $300–$800 per unit, deliver in 48 hours, and allow light edits. Aim for three units a week, then five. Now you have cashflow you can see.

Attention product: niche newsletter that solves one expensive headache—procurement bulletin for a tiny industry, city‑by‑city permitting changes, or a curated week in AI safety for lawyers. Pre‑sell annual seats at USD $99–$149; deliver every Friday before 9 a.m. The rule is sacred timing. Reliability is half the value.

Market product: in volatility spikes, sell one or two cash‑secured puts each month on fortress names; allocate a small slice to long‑dated calls when credit and breadth improve. Track results in a plain ledger. The wins pay for the patience; the patience pays for the wins.

Behaviours That Compound, Quietly

Measure three numbers every Sunday. Input: hours spent on outreach and building. Output: invoices sent and collected. Health: runway in months at current burn. If input drops, output will follow; if runway shrinks, you either cut cost or raise price by offering more value per unit time. Keep one page of “stop doing” items—work that pleases your ego but not your ledger.

Run an error audit with two buckets. “Saw but didn’t act”: fix with a tiny rule that forces the next action. “Acted but didn’t see”: fix with a filter that stops the same mistake. In six months, your calendar looks different. In twelve, your balance sheet does. That is Building Wealth with No Money in practice: fewer repeat errors, more repeatable loops.

Mindset: Calm, Not Cute

Cuteness kills. Clarity pays. You don’t need aphorisms; you need sentences you can act on. I will send ten offers before noon. I will deliver by Wednesday 5 p.m. I will cut this client if they miss two payments. I will only add equity exposure when spreads compress for three days and the dollar softens. This is not macho discipline. It is self‑respect disguised as scheduling.

Patience is not idleness. It is a position. Hold cash without shame. Hold your tongue until you have something clean to say. Hold your entries until your rules agree. The world rewards restraint because most people can’t manage it for a week.

The Final Loop

Wealth is not a distant shore you swim toward; it’s the tide that rises when you keep deep water under you. Start with time, turn it into skill, squeeze skill into cashflow, and exchange cashflow for assets and optionality you can hold through weather. The market is not a separate realm. It is the same rhythm played louder: evidence, timing, size, review.

Here’s the quiet detonator: money is a late guest. Behaviour arrives first. Build the loops and the bank balance catches up. The calendar becomes a mint; the journal becomes an engine; the rules become a guard. Do this and Building Wealth with No Money stops being a slogan and turns into the obvious thing you do, like brushing your teeth and checking the sky before a long ride. The rest is compounding—quiet, relentless, yours.

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Understanding Housing Alerts and Real Estate Market Cycles Housing alerts are notifications or signals that indicate significant changes in the ...

September 11, 2024

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I understand your request. I'll update and revise the essay on overcoming overconfidence bias, incorporating current data, concepts of mass ...

July 17, 2024

Factors Driving Inflation Rates: Energy, Wages, Supply Chains, and Policy Shocks

Posted on March 10, 2025 by Alan Solomon

The Price That Moves the Room

Inflation sounds like a tidy word for rising prices. It is messier. It is petrol stations at dawn, rent renewals that land like verdicts, grocery tills that add a quiet tax to the week. Ask what moves it and the answers feel obvious—energy, wages, shipping, policy—but the mechanics are tangled and human. Bills do not rise in straight lines. They pulse with shocks and settle with lags. The question behind them is simple, stubborn, and alive: what are the real factors driving inflation rates, and what do they do to markets when they shift together?

The mind wants a single culprit to blame. The tape refuses. Gasoline falls while service costs creep. Freight normalises just as fiscal taps reopen. Rate cuts arrive into tight job markets and awaken the parts of the economy that sleep lightly. If you listen for a single drum, you’ll miss the orchestra. Understanding inflation begins with pieces—energy, wages, supply chains, policy shocks—and ends with how they harmonise or fight.

From Receipts to Risk: The Quiet Bridge

Households think—can I afford this? Investors think—what will be paid for this? The bridge is interest rates. When inflation wakes, central banks lift the price of time, and everything else reprices around that decision. Patience, timing, and discipline—virtues in life—become tools in portfolios. Patience to wait for signals, timing to act when dials align, discipline to avoid improvising when the room is loud. If you can map the drivers of inflation, you can map the cost of capital; if you can map that, you can price assets without begging headlines for permission.

Energy: The Master Thermostat

Energy is the most visible throttle. A $10 move in crude oil can shift USA petrol roughly $0.25 per gallon, with a pass‑through that takes weeks, not hours. Petrol wears a small CPI weight, but fuel touches freight, chemicals, airfares, plastics—the ripples multiply. Watch crack spreads (what refineries earn turning crude into products) to gauge pressure before it reaches the pump. Electricity sits quieter but bites longer; power prices fold into data centres, factories, and homes with long contracts and slow resets.

For markets, energy is both input and signal. Rising oil with softening growth hardens real yields and compresses multiples; rising oil with firm growth fattens cash flows for producers and enablers—pipes, field services, grid hardware. The investor’s move is not to chant “higher oil = bad” but to ask which part of the curve is moving, how long it can last, and who can pass on costs without losing customers.

Wages: Sticky, Human, Decisive

Wages are the durable core of service inflation. When pay rises faster than productivity, unit labour costs climb, and firms either absorb the hit or lift prices. A world where wage growth runs 4–5% while productivity adds 1.5–2% points to 2–3% cost pressure before you even open the doors. Hospitality, healthcare, and repair services feel this most; their “product” is time, and time doesn’t scale like code.

The useful dials are simple. Quits rates tell you whether workers feel brave; a falling quits rate cools wage pressure. Job openings per unemployed person show bargaining power; when it eases, pay growth follows with a lag. In equities, rising labour share compresses low‑margin business models that cannot automate. It also rewards firms that invested in process, software, and tools that let fewer hands do more. This is where productivity is not a speech; it’s a margin defence you can read in the numbers.

Supply Chains: Friction, Choke Points, and Lags

We learned the hard way that logistics is not background. Container rates can triple in a month when routes choke—canals restricted, war zones widened, ports clogged. Supplier delivery times and order backlogs in purchasing managers’ surveys give you early warning. When delivery times shorten and inventories rebuild, goods disinflation follows; when ships reroute and warehouses thin, the goods impulse can flip violently.

Goods inflation travels with shorter legs than services. It spikes and fades. The trick is to separate transient spikes from structural shortages. Chips were scarce; then capex roared; then supply returned. If you own importers, retailers, and hardware names, freight and delivery metrics become your body language reads. Not anecdotes—data. You do not need to predict the Red Sea; you need to observe the rates and shorten your reaction time.

Policy Shocks: When Rulebooks Move the Price of Time

Fiscal and monetary choices can dwarf all else. Pandemic‑era cheques and backstops were a fire hose; deficits that shrink are a hose turned down; programmes that return—tax credits, industrial policy, tariffs—can reignite specific price clusters. Monetary policy changes the cost of waiting. With USA policy peaking above 5% and balance‑sheet runoff draining reserves, term premiums and discount rates rose; ease those settings and valuation math shifts back.

Policy shocks also change expectations. Announce a tariff and firms pull forward orders; tease student‑debt relief and consumption smooths; promise rate cuts and housing peeks out. Expectations are not fluff; they alter behaviour in advance. Portfolios should treat policy like weather: not controllable, very real, and sometimes the only thing that matters that week.

Expectations and Second Rounds

Inflation is not just cost; it’s story. If households expect next year’s prices to rise 5%, they behave differently than if they expect 2%. That behaviour becomes price pressure or relief. Rents show this cleanly. Market rents cooled long before official shelter measures did, because the CPI shelter component is built from slow‑moving panels. You could see the turn in new leases months ahead and trade it—homebuilders firming, REITs stabilising, long bonds breathing—while the headline lagged.

Second‑round effects are where inflation lingers. Wages up → services prices up → wages catch up again. Breaking that spiral requires productivity or patience. For investors, the patience is explicit—allow time for lags—and the productivity is tangible—own the companies that build time‑savers for others.

The Investor’s Map: Five Dials, One Decision

Practical inflation watching is five dials and a diary. Energy curve (crude, products, power). Wage pressure (quits, openings, unit labour costs). Supply chain stress (container rates, delivery times). Policy path (rate expectations, balance‑sheet runoff, fiscal impulse). Expectations (survey medians, market breakevens). Read them together, not alone. A softer dollar and tightening credit spreads say risk can breathe even if energy ticked up; widening spreads with firm real yields say respect gravity even if a headline cools.

Asset pricing follows. If those dials lean disinflationary and growth survives, 10‑year yields toward 3.5–4.0% and an S&P earnings line in the USD $240–$260 zone justify high‑teens to ~20× multiples. If inflation re‑heats and real yields rise, bring that multiple towards mid‑teens and prefer cash generators over promises.

Margins, Pricing Power, and Who Wins Where

Inflation does not hate all firms equally. Companies with pricing power, low variable costs, and short contract cycles adjust quickly. So do businesses that sell must‑haves, not nice‑to‑haves—medical devices with reimbursement, maintenance software with high switching costs, critical components in energy or datacentre build‑outs. Firms with long fixed‑price contracts, thin gross margins, and heavy labour intensity suffer. You do not need a theory; you need a checklist: gross margin stability, opex growth slower than sales, clean cash conversion. If these hold while input costs bite, you own resilience.

Trading the Turns Without Heroics

Inflation regimes do not flip by tweet; they turn when dials sing. For entries after fear, ask for a modest choir: multi‑day high‑yield spread compression, a softer USD, a re‑steepening volatility curve, and breadth that widens beyond a handful of names. Then act in stages—one‑third on confirmation, one‑third after a retest holds, one‑third when earnings validate. During volatility spikes (VIX > mid‑20s), consider selling cash‑secured puts on fortresses you want to own; let fear pay you USD to wait. Reinvest a slice of that premium in 18–36 month calls on the index or the name to buy time for the thesis. Size positions so a wrong week stings, not breaks.

For defence, watch for the opposite choir: narrowing breadth, a flat or frowning vol curve into strength, spreads that refuse to tighten, and energy lifting while real yields firm. Trim, hedge, or sit in cash. Waiting is a position; price it.

Case Notes: A Short Memory Aid

2021–22 was the template for a supply‑led shock made worse by cheques and broken logistics. Goods surged; services followed; wages chased. Energy spiked; freight screamed; the USD firmed; policy tightened hard. The winners were energy producers, some shippers, and firms with deep pricing power; long‑duration promises paid in the distant future were marked down ruthlessly as discount rates climbed.

2023–24 showed the unwind: goods cooled as capacity returned; market rents fell even as measured shelter stayed high; wages eased from peak while productivity flickered back. Spreads narrowed, the USD softened in patches, and the market paid more for each dollar of earnings again. If 2025 keeps walking that path, the map is patience for disinflation and select growth. If shocks return—war, tariffs, surprise fiscal taps—dust off the earlier playbook.

Contradictions Worth Owning

The energy transition is inflationary and deflationary at once. Building grids, mines, and fabs lifts demand for concrete, copper, transformers. Better efficiency and software squeeze energy use per unit of output. Globalisation and its partial reversal do the same dance: friend‑shoring pushes costs up now and resilience down the line; AI lowers some service costs even as it gulps power. Hold both truths without flinching. Portfolios that survive own the builders of the new (power equipment, semis, logistics software) and the sellers of time (productivity tools, automation), while demanding valuation that respects the bond market’s verdict.

The Final Loop

Energy, wages, supply chains, policy shocks—the components look like separate chapters. They’re one story about pressure and time. Households feel it as a receipt. Investors translate it into discount rates, earnings lines, and cash that can cross a hard week without running. If you learn to read how those pieces move together, you stop arguing with price and start hearing what it’s saying early enough to act.

The small detonation is this: the real skill is not predicting the next print but recognising when the system has changed key. The factors driving inflation rates are the same factors that decide whether you get paid to hold risk this month. Map them, write your “if‑then” rules, and let the tape confirm your bias before you spend it. That is how you turn a messy subject into clean decisions—and let time turn those decisions into USD that still buys what you hoped it would.

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Housing alerts real estate market cycles

Posted on September 11, 2024 by Alan Solomon

Understanding Housing Alerts and Real Estate Market Cycles

Housing alerts are notifications or signals that indicate significant changes in the real estate market, such as fluctuations in property prices, changes in interest rates, or shifts in buyer demand. These alerts can serve as valuable tools for investors, helping them make informed decisions based on current conditions. Understanding how these alerts relate to real estate market cycles is crucial for anyone looking to invest wisely in the housing sector.

Real estate market cycles typically consist of four distinct phases: recovery, expansion, hyper-supply, and recession. Each phase presents unique opportunities and challenges for investors. Recognizing these cycles and the signals that accompany them can enhance an investor’s ability to capitalize on favourable market conditions while mitigating risks during downturns.

The Role of Mass Psychology in Real Estate Investing

Mass psychology significantly influences the behaviour of investors in the real estate market. The collective sentiment of buyers and sellers can lead to irrational decisions driven by fear, greed, or euphoria. For example, during the expansion phase of a market cycle, optimism can lead to increased buying activity, driving prices higher. Conversely, during a recession, fear can cause panic selling, further depressing prices.

George Soros, a renowned investor, emphasizes that market trends often reflect the psychology of participants rather than purely objective factors. He states, “It is not whether you are right or wrong that is important, but how much money you make when you are right and how much you lose when you are wrong.” This statement highlights the impact of emotional decision-making on investment outcomes, particularly in real estate, where market sentiment can shift rapidly.

Cognitive Biases Affecting Real Estate Investors

Cognitive biases can distort an investor’s judgment and lead to poor decisions in real estate. One prevalent bias is the anchoring bias, where investors give too much weight to initial information, such as previous home prices. For instance, if a homeowner bought a property at a high price during a market peak, they might refuse to sell it for less, even when market conditions have changed. This refusal can lead to missed opportunities as they hold onto an asset that may not regain its former value.

Warren Buffett often advises investors to remain rational and avoid emotional attachments to their investments. He suggests that a disciplined approach, grounded in factual analysis, can help mitigate the effects of cognitive biases. By focusing on data and market alerts, investors can make more informed decisions, especially when navigating the various phases of real estate market cycles.

Technical Analysis in Real Estate Investing

Technical analysis involves studying historical price movements and trends to forecast future price behaviour. In real estate, this can include analyzing housing price trends, rental yields, and vacancy rates. Investors who understand these technical indicators can better anticipate shifts in market cycles.

William O’Neil, the founder of Investor’s Business Daily, pioneered techniques that have been successfully applied in stock and real estate investing. His CAN SLIM strategy emphasizes the importance of understanding price patterns and market trends. For real estate investors, this means recognizing when prices are likely to rise or fall based on past performance and current market alerts.

Examples of Housing Alerts Impacting Market Cycles

One clear example of housing alerts influencing market cycles is the 2008 financial crisis. Leading up to the crisis, numerous alerts indicated increasing levels of mortgage delinquencies and declining home values. However, many investors ignored these signals, caught up in the prevailing optimism surrounding housing prices. When the market collapsed, those who had heeded the alerts and sold their properties or refrained from buying faced far less financial devastation.

On the other hand, the recovery phase that followed the crisis showcased the effectiveness of monitoring housing alerts. As the market began to stabilize in 2012, alerts indicating rising home prices and decreasing inventory motivated savvy investors to enter the market. Those who capitalized on this information experienced significant returns as property values increased in the following years.

Economic Indicators and Market Cycles

Economic indicators play a critical role in shaping real estate market cycles. Factors such as interest rates, unemployment rates, and inflation can significantly impact housing demand and property values. For instance, when interest rates are low, borrowing becomes cheaper, encouraging more people to purchase homes. This increased demand can lead to an expansion phase in the market cycle.

Ray Dalio, founder of Bridgewater Associates, stresses the importance of understanding macroeconomic factors in investment decisions. He advocates for a thorough analysis of economic indicators, as they often provide valuable context for recognizing shifts in market cycles. Investors who pay attention to these economic signals are better equipped to make informed decisions regarding housing alerts and potential investment opportunities.

Long-Term Strategies Versus Short-Term Trading in Real Estate

Investing in real estate often involves a choice between long-term strategies and short-term trading. Long-term investors, such as John Bogle, advocate for a buy-and-hold approach, focusing on properties with strong fundamentals. By holding onto investments through various market cycles, these investors can benefit from appreciation and rental income over time.

On the flip side, short-term investors may seek to capitalize on fluctuations within market cycles. Jim Simons, known for his quantitative trading strategies, has achieved remarkable success by analyzing data patterns. Real estate investors can also apply similar techniques to identify short-term opportunities based on housing alerts and market trends.

The Importance of Diversification in Real Estate Investment

Diversification is a critical strategy for managing risk in real estate investing. Investing in various property types or geographic regions can reduce their exposure to any single market event. This principle is echoed by Peter Lynch, who famously stated, “Know what you own, and know why you own it.” A diversified portfolio can provide stability during market downturns and help investors navigate the cycles more effectively.

Carl Icahn, a well-known activist investor, also emphasizes the importance of diversification. He advises investors to consider various sectors and asset classes, allowing for greater resilience during market fluctuations. By diversifying their investments, individuals can better manage risks associated with real estate market cycles and housing alerts.

Technological Tools for Monitoring Housing Alerts

In today’s digital age, technology plays a significant role in monitoring housing alerts and analyzing real estate market cycles. Numerous online platforms and tools provide real-time data on housing prices, rental rates, and economic indicators. By leveraging these tools, investors can stay informed and respond quickly to market changes.

Jesse Livermore, a legendary trader, once noted the importance of timing in investing. While his strategies were developed in an earlier era, the principle remains relevant. Modern investors can use technology to enhance their timing and decision-making, ensuring they act on housing alerts and market signals promptly.

Conclusion: Navigating Housing Alerts and Real Estate Market Cycles

In conclusion, understanding housing alerts and real estate market cycles is essential for investors seeking to optimize their strategies. By recognizing the impact of mass psychology, cognitive biases, and economic indicators, investors can make informed decisions that align with market conditions. The teachings of renowned experts like Warren Buffett, Benjamin Graham, and George Soros offer valuable guidance for navigating these complexities.

Ultimately, investors can position themselves for success in the real estate market by honing their skills in recognizing housing alerts and understanding market cycles. As conditions continue to change, those who remain informed and disciplined will be best equipped to seize opportunities and achieve long-term financial growth.

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Volatility of the stock market: Adapt or Lose

Posted on April 17, 2023 by Alan Solomon

The aptitude for identifying opportunity within disorder presents a highly valuable skill that can empower individuals to prosper in tumultuous times, particularly in the mercurial stock market. Although seemingly paradoxical, historical evidence suggests that periods of turbulence often beget monumental advancements. Indeed, some of the most distinguished individuals in history have been those who perceived opportunities, where others solely observed chaos and desolation.

Exhibiting Equanimity and Adaptability in the Stock Market

A critical factor in discovering opportunity amid the capricious stock market lies in maintaining composure and clear-headedness. Amidst the widespread panic, it is prudent to remain poised and rationally assess the situation. This approach enables well-informed decisions, facilitating positive advancement even in the face of market turbulence. Additionally, embracing calculated risks and venturing beyond one’s comfort zone is essential for capitalizing on available opportunities.

Another salient consideration is adaptability in the face of stock market fluctuations. Rapid acclimatization grants a distinct advantage amidst uncertainty and perpetual change. Instead of resisting alterations, individuals should be amenable to new experiences, requiring a cognitive shift and relinquishing entrenched habits and thought patterns. This adaptability is indispensable for achieving success amidst volatility.

Transforming Adversity into Opportunity in the Stock Market

The most accomplished investors throughout history have successfully transmuted adversity into opportunity, utilizing challenges as catalysts for success. Emulating their example by remaining composed, and adaptable, and seizing opportunities in the volatile stock market is a viable strategy.

The Efficacy of the Contrarian Strategy in the Stock Market

The Contrarian Strategy, alternatively known as the Overreaction Hypothesis, posits that investors may profit by deviating from collective sentiment.

Conclusion

The Contrarian Strategy, also known as the Overreaction Hypothesis, emphasizes that investors can profit by going against the crowd, aligning with the principles of Volatility Trading Strategies. These strategies capitalize on market fluctuations and extreme sentiments to identify investment opportunities. Mastering the art of recognizing opportunities amidst market volatility and chaos is a crucial skill that enables investors to flourish during challenging times. By maintaining equanimity, exhibiting adaptability, and incorporating the Contrarian Strategy into their investment approach, investors can harness market volatility to yield higher long-term returns.

Mass Psychology plays a significant role in market volatility, with collective panic and elevated fear levels driving markets to become increasingly volatile. By combining an understanding of Mass Psychology with market volatility, investors can seize opportunities at favorable prices and capitalize on prospects that others might disregard.

Numerous successful investors have employed this approach, purchasing when others are divesting and liquidating when others are acquiring. By deviating from the consensus, these investors have consistently generated substantial returns over extended periods.

Ultimately, embracing chaos and volatility as opportunities for growth rather than obstacles is key to thriving in the capricious stock market. By fostering mental resilience, adaptability, and strategic thinking, investors can transform adversity into a springboard for success, positioning themselves advantageously in the ever-evolving financial landscape.

War of Attrition

Posted on April 17, 2023 by Alan Solomon

Investing in the stock market can be a game of patience and perseverance, often likened to a war of attrition. In this war, investors must have the fortitude to withstand market fluctuations, remain focused on their long-term goals, and resist the urge to make impulsive decisions based on short-term market movements.

The term “war of attrition” originates from military history, where it refers to a prolonged conflict characterised by continuous small-scale battles designed to wear down the enemy. In the world of investing, this war of attrition can be seen in the daily fluctuations of the stock market, with investors constantly fighting to maintain their positions and fend off market downturns.

To win this war, investors must be prepared to make strategic decisions and take calculated risks. They must have a clear understanding of their investment objectives, risk tolerance, and the market in which they are investing. Additionally, they must have a disciplined approach to their investment strategy and resist the temptation to deviate from it in response to market volatility.

One key strategy for winning this war is to focus on long-term investments rather than trying to time the market or make quick profits. By investing in a diversified portfolio of quality companies and holding those investments over time, investors can ride out short-term market fluctuations and benefit from the long-term growth potential of the market.

Another strategy is to remain patient and avoid making rash decisions based on short-term market movements. The market is inherently volatile, and investors who panic and sell during a downturn risk missing out on potential gains when the market eventually rebounds.

Ultimately, the war of attrition in investing is a battle between fear and greed. Fear can cause investors to sell in a panic, while greed can lead them to make impulsive decisions based on the promise of quick profits. Investors who remain focused on their long-term goals, maintain a disciplined approach, and avoid succumbing to fear and greed are the ones who are most likely to come out on top in this war.

Investing in the markets is a war of attrition that requires patience, discipline, and a long-term perspective. By understanding the market, maintaining a diversified portfolio, and staying focused on their goals, investors can successfully navigate the ups and downs of the market and emerge victorious in the end.

Why the Crowd always losses?

Posted on February 27, 2023 by Alan Solomon

One of the key factors contributing to the crowd’s losses in the stock market is the influence of emotions. A growing body of research in behavioural finance has shown that emotions, such as fear and greed, can have a significant impact on investment decisions. For example, when the market drops, fear and panic can lead investors to sell their holdings and lock in their losses. Conversely, when the market rises, greed can drive investors to pour money into the market, often buying at the top and missing out on future gains. This emotional cycle can result in poor investment decisions and has been shown to be one of the key reasons why the crowd often loses in the stock market.

In addition to emotions, misinformation and groupthink also play a role in the crowd’s losses in the stock market. A recent study by the University of California, Los Angeles, found that many investors rely on financial advisors who may not have their best interests at heart. This can lead to poor investment decisions and missed opportunities for growth. Furthermore, the media often sensationalizes market events, which can lead to widespread confusion and misunderstandings among investors.

The herd mentality, a common phenomenon in the stock market, is also a factor that contributes to the crowd’s losses. This refers to the tendency of investors to follow the crowd, even if it is not in their best interest. Research has shown that the herd mentality often leads to buying high and selling low, as investors follow the crowd instead of their own instincts and analysis. This is particularly problematic when it comes to “hot” stocks or market sectors, which can quickly become overcrowded and lead to a market correction.

In contrast, contrarian investors take a different approach to the stock market. They are willing to go against the crowd and invest in stocks that are out of favour or undervalued. A recent study by the University of Chicago Booth School of Business found that contrarian investors outperformed the market by 2.5% per year over a 20-year period. This is due to their willingness to rely on a thorough analysis of a company’s financials and growth prospects, rather than being swayed by emotions or groupthink.

Furthermore, contrarian investors are patient and willing to hold onto their investments for the long term. A study by Vanguard found that a long-term investment approach can result in higher returns and lower volatility, compared to a short-term investment strategy. This long-term focus allows contrarian investors to ride out market corrections and reap the benefits of a well-diversified portfolio over time.

In conclusion, the crowd often loses in the stock market due to the influence of emotions, misinformation, and groupthink. These factors lead to poor investment decisions and missed opportunities for growth. In contrast, contrarian investors, who rely on informed analysis and a long-term focus, have been shown to outperform the market. The key to success in the stock market is to have a well-diversified portfolio, be patient, disciplined, and informed in your investment decisions, and avoid being swayed by emotions, misinformation, or groupthink.

Popular Media Lies To You: Don’t Listen To Experts As They Know Nothing

Posted on March 2, 2021 by Alberto Mancini

What should traders have learned from the Nov-Dec 2018 crash?

There is only one answer really; fear pays poorly. We sent out an inordinate amount of updates during the crash phase, as we did through every crash like phase the market has experienced over the past several years. The reason we did this, was to prove in real time that giving into fear is a waste of time, money and good health. Once again the so-called crash of 2018 will have to be labelled as the crash that never was.

One day the market will experience something that will fall under the “crash” category that all the experts have been warning since the inception of this bull. For that to occur, bullish sentiment will have to soar to the extreme ranges and remain in that zone for an extended period.

This Stock Market Bull is unlike other bulls

Long before this pullback, we stated that this bull market would soar to heights that would surprise even the most ardent of bulls, and that prediction has mostly come to pass. Some of the most ardent of bulls started to keel over as early as 2016, and the last strong correction virtually knocked all of them out. So where did they err? Over-reliance on old systems; the paradigm has changed, the players have changed, and as a result, the perceptions have changed. When it comes to the markets; the main driving force is emotions (perceptions); everything else on its top day is secondary at best.

Media Lies To The Masses; Trying To Convince Them That Nothing has changed

This bull market is unlike any other; before 2009, one could have relied on extensive technical studies to more or less call the top of a market give or take a few months; after 2009, the game plan changed and 99% of these traders/experts failed to factor this into the equation. Technical analysis as a standalone tool would not work as well as did before 2009 and in many cases would lead to a faulty conclusion. Long story short, there are still too many people pessimistic (experts, your average Joes and everything in between) and until they start to embrace this market, most pullbacks ranging from mild to wild will falsely be mistaken for the big one.

The results speak for themselves; the majority of our holdings were in the red during the pullback, but now they are in the black, proving that one should buy when there is blood flowing in the streets. It is a catchy and easy phrase to spit out but very hard to implement, because when push comes to shove, the masses will opt for being shoved.

V readings are still at ultra-high levels

We have alluded to the fact that there is a pattern between extreme weather and market action. Extreme weather usually pushes many people to act in wildly unpredictable ways. Look at animals when there is a sign of impending danger they act strangely, humans are not that different. The only real difference is that humans are not aware of this and tend to blame other factors for this irrational behaviour; this behaviour is reflected in and out of the markets. Violent crimes and or bizarre crimes usually surge during these periods. However, one of the best places to see this type of action is in the markets and the action over the past three months is clear evidence of this.

We have spotted what could turn out to be a new trend between the V-indicator and the Trend Indicator. Our hypothesis:

“Higher (V-Readings) readings, are more likely to ensure that the least probable outcome will come to pass in regards to the markets.”

For example, the least probable outcome from Dec 2018 to Jan 2019 was for the markets to mount a strong rally, but that is precisely what took place. This pattern, if it continues, will provide another level (secondary) of confirmation that this bull market is destined to trend a lot higher than the most ardent of bulls could ever dream of.

Follow the trend for it is your friend, the rest is just hot air and noise

Courtesy of Tactical Investor

Random views on Popular Media Lies

Forget fake news, investors should realize the markets are fake, says asset manager

The global rally in financial markets is unsustainable because it only seems to respond to changes in the real economy when it fits a certain narrative, according to the CIO of investment firm Fasanara Capital.

“I call it fake markets… you know, these days they talk about fake news (but) these are fake markets in a way right?” Francesco Filia, CIO of Fasanara Capital, told CNBC on Wednesday.

Filia argued financial markets had become “complacent” and “insensitive” to fundamental changes in the economy. He suggested while markets appeared to surge higher on so-called good data, a mirrored response lower on negative sentiment had not been evident.

“I think this kind of market environment is both unstable and unsustainable… at some point, something is going to happen that is going to all of a sudden wake up markets as to this overvaluation,” Filia said.
European bourses were trading lower on Wednesday after European Central Bank President Mario Draghi appeared to hint the ECB would be prepared to scale back its monetary policy amid improving economic prospects for Europe.

Meanwhile, in the U.S., the broader S&P 500 index posted its biggest one-day drop in about six weeks overnight and closed at its lowest point since the end of May. Wall Street’s losses appeared to accelerate on news that the U.S. Senate had delayed voting on a health care reform bill. Full Story

Why robot traders haven’t replaced all the humans at the New York Stock Exchange—yet?

As in so many other industries, robots have been marching into Wall Street for years. That’s especially the case in stock trading, where algorithms now do the majority of buying and selling. Instead of a boisterous trading floor, these days many US equity transactions happen in a data center in suburban New Jersey. One place where human traders are safe, though, is the New York Stock Exchange, which has roots going back two centuries. The stock exchange has made sure its human presence is protected, for now.

NYSE’s several hundred traders and brokers are the face Wall Street, and form a crucial part of the NYSE brand, which is perhaps the best known in the financial industry. The stock exchange packs a marketing punch few, if any, businesses can match. But given that computers dominate stock trading just about everywhere else around the world—and play a pretty big role at NYSE, too—it’s reasonable to ask whether the people milling around the trading floor at 11 Wall Street in Manhattan are worth keeping around. Critics argue that it’s a façade for television cameras, a kind of capitalist Disneyland.

“If you were going to start from scratch, trading would be fully automated,” said Larry Tabb, founder of research and consulting firm Tabb Group. ”That said, I think the human role does provide assistance in trading.” Full Story

Stock Market Fake Risk, Fake Return? Market Crash?

With seemingly everyone from the blogosphere to the Tweeter-in-chief chiming in on fake news, have investors considered their risk/return profile may also be “fake”? When it comes to investing, who or what can we trust, is the market rigged, and why does it matter?

For eight years in a row now, an investment in the S&P 500 has yielded positive returns. In recent years, expressions like “investors buy the dips” and “low volatility” have become associated with this rally.
In the “old days”, investors used to construct portfolios that, at least in theory, provided a risk/return profile that they were comfortable with. For better or worse, I allege those “old days” are over. To be prepared for what’s ahead, let’s debunk some myths.

The system is rigged
For those that say the system is rigged, I concur. In my assessment, central banks are largely responsible for a compression of “risk premia.” All else equal, quantitative easing and its variants around the globe have made assets from equities to bonds appear less risky than they are. This is at the very core of central banks efforts to entice investors to take risks, as risk taking is key to making an economy grow. In practice, central banks have foremost pushed up financial assets, but have largely disappointed in generating real investments. As a result, those holding financial assets have disproportionally benefited. Full Story

Fiat Money – The main driver behind boom & Bust Cycles

Posted on March 1, 2021 by Alberto Mancini

Fiat Money The Root Of All Things Bad

Fiat Money: The mother of all evils is fiat. Without Fiat, none of the above developments would have taken off. As money can be created out of thin air, those in the know have unlimited mechanisms to increase their wealth easily. The devastating boom and bust cycles the markets experience are not natural; they are created. Each cycle is pushed to the MAX in order to create more of an opportunity for those in the know how. Now if you control the money, you can purchase all the main media outlets. When you control the media and the money supply you are king of the hill; less than 10% of the populace is strong enough to resist from falling for what they have directed to see.

The left and the right are being directed;

They are both being played, and none is the wiser. This technique is used everywhere. The strategy employed is to provide the masses with two to three options to give them the illusion of choice but all the choices lead to the same outcome, and that is what they fail to see. When one takes an extreme position it does not matter whether you are swinging to the right or to the left, you are being controlled and it’s impossible for that person to see anything else besides the data they have been fed.

So how does this all tie up; all those events we briefly mentioned are being used and will be used to polarise the crowd even more? What is immoral today is moral tomorrow; what changed? The only thing that changed was the perception. So if you program children young enough with the perception you want, you can make them accept almost anything as moral, and that is what the public education system is all about. Remember nothing is free and what appears to be free usually ends up costing you 10X more down the line. One wise man I knew would often use this sentence when anyone made references to free stuff. He would say I am not rich enough to accept free things.

Fiat Money is behind everything

As Fiat is behind everything, and the money supply continues to go ballistic, we can expect levels of polarisation to soar to levels that are unimaginable today. With an unlimited supply of money and a vast understanding of the topic of Mass psychology, there is almost nothing in place to stop the top players from pushing these trends to their limit. The only defence is not to allow your emotions to do the talking, sit down and imagine its reality TV minus the Boob tube.

We have gone on record for several years on end, stating that market crashes are nothing but buying opportunities and today we provided a brief glimpse into the reasoning behind this stance. There is no way the Fed is going to allow the markets to crash and burn. They will create the illusion of a crash, and the masses will react in the way they have been programmed to react; dump the baby with the bathwater. The conniving top players will come in and scoop everything. What separates a correction from a crash? Your entry point; the early bird gets the worm, and the late bird has to contend with the bullet. That is why mass psychology states that one should sell when the masses are euphoric and buy when the masses are panicking or in a state of uncertainty.

Take a look at these charts, and a pattern will start to emerge

The shaded areas represent recessions, and a recession usually follows a disaster. After each recession, the currency in circulation continued to soar.

The same thing occurred with M1 money stock, and after each recession, the M1 money stock surged even more. Look at the spike after the 2008 financial crisis.

Moreover, the same can be said of the monetary base, but the move in this chart was explosive after 2008.

In 1790 the national debt was a minuscule $75.4 million, and today we add more than that on a monthly basis. So when experts especially from the “hard money camp” state that the masses will revolt one day. The only part that is true in that sentence is “one day” but that day could be decades away from today because their perception has been altered. They believe that the dollar is good as gold and as long as they believe that, Fiat has no chance of being unseated and nothing is standing in the way of the national debt moving to $100 trillion. If it could move from $75.4 million to almost $21 trillion without the masses revolting; the move from $20 trillion to $100 trillion is paltry by comparison

So what stands out is that the principles of Pavlov have been used wonderfully against the American and now the world populace at large. The masses have accepted that if there is a crisis, the government will find a way to solve it. Indeed they will find a way, but they will pass the bill onto the unsuspecting masses in the form of inflation and taxes; double whammy for inflation is a silent tax.

Therefore we can make the following conclusions

Nations will continue to take on more debt; the US will lead the pack. In order to do this without interference from the masses, disasters and divisions will have to be created. Remember the saying conquer and divide or united we stand but divided we fall. The only ones falling will be the masses. History indicates that the ones that are least able to pay always pay for the lion’s share and they do so for the disasters created by the very people that are sending them the bill. There are no free meals, just illusions of free meals.
If the above premise is correct, then the next conclusion is that the governments will never allow a repeat of the great depression. Today’s society will never accept hardships like that; they will string the people in charge of the nearest tree, but this is precisely the mindset the top players fostered. For in the guise of helping the masses than can fleece the living daylights out of them. Ultimately this informs us that every market crash no matter how bad or strong will prove to be a buying opportunity for it gives these players an excuse to ramp up the money supply

A disaster needs to be manufactured in order to provide the masses with a solution

You can only provide the masses with a solution if you manufacture a disaster that appears to be so terrible that the masses will accept conditions they would not have accepted before the disaster because they have been led to believe the aftermath will be infinitely worse. It is a win-win situation for the top players; they get their cake and their pie. This is why we do not fear stock market crashes because we understand the game plan and we know that the masses will always be used as cannon fodder.

Having said that, jumping and buying stocks when the markets are crashing is not an easy thing to do. We spent over a decade in coming out with the trend indicator, and we have our custom indicators to inform us of when a trend change is close at hand or when the markets are exhibiting definite signs of a bottom.

What are the average player’s options?

Take time to understand the main principles of Mass Psychology as without that you will give in to fear every time the market’s pullback strongly. Understand that our first reaction is to flee when confronted with any danger, don’t fight that feeling, study it and understand it for it is. When you study it, you will come to see how bad such emotions are and in doing so, you will have moved to the stage where you will have the power to say yes or no when exposed to a similar situation. Read history books; you do not have to learn from your experiences only; you can learn by studying the reactions of other people

Once you have mastered that, find 2-3 technical indicators that appeal to you. They must appeal to you; don’t just choose them because they sound fancy or they are promoted as being the best ones out there. Once you find some appealing technical indicators, study them and look for patterns. Technical analysis is like art; beauty is in the eye of the beholder. Use long-term charts preferably weekly and monthly charts.

Courtesy of Tactical Investor

Random views on FIAT money

Boom and Bust Cycles Are Primarily Due To Fiat Money

Make the Masses focus on other factors so they don’t focus on the Fiat Money Factor
The ploy from the day we got of the Gold Standard has been to redirect the masses attention. The masses are directed to focus on they could buy with all this money. In other words, Fiat money appears to be incredibly valuable, even though it has no intrinsic value.

To cement this illusion, a small segment of the population is paid fantastic salaries and their flamboyant lifestyles are broadcasted for everyone to see. The goal of creating divisions in society is to make one group of individuals wish for the lifestyle that this other group is living. The more divisions you create, the greater the cover; in other words, these divisions are created to ensure that the masses forget the real task at hand. This has worked very well, for almost no one today questions Fiat. Their main agenda today is to make more money so that they can lead a better life; little attention is paid to the fact, that they have to work harder and harder for less and less. The money they are paid is constantly being diluted; this is the true defintion of inflation. An increase in the money supply and not an increase in prices. Rising prices are only the symptom of the disease. Full Story

World FIAT Currencies List

Unlike commodity money which is covered by the value of the precious metal it was created from, usually silver or gold, the value of fiat currency is dependent on the interaction between demand and supply forces. The parties, buyer, and seller, engaged in its exchange will come to an agreement on its value.
Fiat is a Latin word. Translated into English, fiat means “Let it be done”. Fiat Currency is money that does not have intrinsic value but is recognized or accepted as a form of legal tender through government regulation. To read more about fiat currencies click on the following links to jump to the correct sections:
While most money was backed by physical goods or precious metals, fiat currency is contingent on people’s belief and faith in a country’s economy.

Many of today’s paper money is considered fiat money. They do not carry user value. The function of the paper money is to facilitate a payment. A government would produce coins out of precious metals and manufacture paper currency that would have an equivalent value in terms of a physical good. In the case of fiat currency, it cannot be redeemed. Neither can fiat currency be converted.

Fiat currency because popular and widely used in the 20th century particularly during the period of 1968 and 1973 when the Bretton Woods Agreement was terminated and the United States no longer allowed the U.S. Dollar to be converted to gold. Full Story

Billionaire Tim Draper: Only Criminals Will Use Fiat Money, As Cryptos Will Hit Mainstream in Next Few Years

Legendary billionaire venture capitalist, Tim Draper has predicted that in the next five years, fiat currencies will only be used by those involved in illicit activities.

According to the well-known bitcoin (BTC) bull, cryptocurrencies will achieve mainstream adoption within the next few years – while fiat money will mostly be used by criminals. Draper’s comments came during an interview (on February 18th) with Fox Business in which he told the financial news outlet that cryptocurrency transactions can be tracked easily through block explorers.

Draper, who acquired 30,000 bitcoins during a US Marshals Service auction (after they had been seized from Silk Road’s black markets), remarked:
“The criminals will still want to operate with cash, because they catch everybody who is trying to use Bitcoin.”

Last year in August, an agent working for the US Drug Enforcement Administration (DEA) had said that it was easier for her department to monitor cryptocurrency transactions – when compared to illegal deals conducted using fiat money. The agent had explained that block explorers provide advanced tools which allow government agencies to accurately track crypto transactions on the blockchain.

During his latest interview, Draper also mentioned that he thinks the fiat money in his bank account is not as secure as his cryptocurrency holdings. According to the business tycoon:
“My bank is constantly under a hack attack.”

Full Story

The Simple Question That Isn’t

The Bridge from Idea to Tape

Working Definition: Logic as Process, Not Pose

Evidence Over Anecdote

Probabilities, Pay‑offs, and Time

Mapping Interactions, Not Lines

Design Rules That Outlive Mood

Sizing and Survival

Timing Without Theatre

Case Notes: How Logic Felt in Real Time

Intuition, Rehabilitated

The Final Loop: The Question, Answered Cleanly

The Year That Asks For A Clean Map

From Life To Tape: Patience, Timing, Revision

Rates: The Gravity Under Valuations

Earnings: The Engine That Drowns Scepticism

Margins: The Quiet Battle For 2025

The Dollar, Liquidity, And Multiples

Breadth: Leadership Or Fragility

Three States, One Playbook

Signals That Decide The Year

Positioning With Rules, Not Nerves

Margins Of Safety You Can See

Microstructure: When The Floor Thins

The Next Leg Is A Behaviour

The Final Loop

Building Wealth with No Money: Skills, Systems, and Smart Cashflow from Zero

The Bridge: From Skill to Cashflow to Capital

Asset One: Scarce Skills That Bill

Asset Two: Systems That Don’t Flake

Asset Three: Networks That Actually Pay

From Cashflow to Capital: Turning USD into Engines

Time Arbitrage, Attention Arbitrage

Risk Controls for the Broke (and the Proud)

The Market as Teacher: Cycles in Work and Tape

Playbooks Under USD $1,000

Behaviours That Compound, Quietly

Mindset: Calm, Not Cute

The Final Loop

The Price That Moves the Room

From Receipts to Risk: The Quiet Bridge

Energy: The Master Thermostat

Wages: Sticky, Human, Decisive

Supply Chains: Friction, Choke Points, and Lags

Policy Shocks: When Rulebooks Move the Price of Time

Expectations and Second Rounds

The Investor’s Map: Five Dials, One Decision

Margins, Pricing Power, and Who Wins Where

Trading the Turns Without Heroics

Case Notes: A Short Memory Aid

Contradictions Worth Owning

The Final Loop

Understanding Housing Alerts and Real Estate Market Cycles

The Role of Mass Psychology in Real Estate Investing

Cognitive Biases Affecting Real Estate Investors

Technical Analysis in Real Estate Investing

Examples of Housing Alerts Impacting Market Cycles

Economic Indicators and Market Cycles

Long-Term Strategies Versus Short-Term Trading in Real Estate

The Importance of Diversification in Real Estate Investment

Technological Tools for Monitoring Housing Alerts

Conclusion: Navigating Housing Alerts and Real Estate Market Cycles

Exhibiting Equanimity and Adaptability in the Stock Market

Transforming Adversity into Opportunity in the Stock Market

The Efficacy of the Contrarian Strategy in the Stock Market

Conclusion

Other Articles of Interest

Other Articles of Interest

Other Articles of Interest

What should traders have learned from the Nov-Dec 2018 crash?

This Stock Market Bull is unlike other bulls

Media Lies To The Masses; Trying To Convince Them That Nothing has changed

V readings are still at ultra-high levels

Random views on Popular Media Lies

Forget fake news, investors should realize the markets are fake, says asset manager

Why robot traders haven’t replaced all the humans at the New York Stock Exchange—yet?

Stock Market Fake Risk, Fake Return? Market Crash?

Other Articles of Interest

Fiat Money The Root Of All Things Bad

The left and the right are being directed;