Do you ever take time out of your day to sit in a quiet place, free of noise and distraction, to just think? If you don’t you should make it a habit to do so. It is a form of meditation, a pit row if you will for that race car in your head that was designed to be more of a 4 cylinder. With regard to markets, I find this quiet time to be extremely helpful. In my day to day I am deep in the woods, helping customers, analyzing markets, running Black Scholes calculations, building spreadsheets, executing trades, and puzzling over if a stock or option can squeak out just a little bit more of a gain (or loss).
I sat quietly this morning for 20 mins with my eyes closed and just let the thoughts flow about the state of the markets, where we’ve been and where I think we may be headed. Some questions and points from that quiet time are as follows:
Have we come too far too fast? Maybe, but I feel like the rout in equities in Q4 2018 was a setup, designed to kick participants off the ride. If that is the case, we can go much, much higher.
Are the technical setups in Gold and Silver alluding to a nasty summer for stocks?
Is individual stock selection even worth one’s time or is it better spent allocating the bulk of your money to index funds with little to no cost. The vast majority don’t beat the indexes over any significant period of time on a risk adjusted basis, net of fees anyway.
What if I started a whole new method of analyzing markets? Could there ever be such a thing? Fundamentals, technicals and quantitative measures of analysis are known to everyone. Are there any other possible methods of market analysis we haven’t thought about yet?
What is going to happen to cryptocurrency markets 2, 5, 20 years from now? Will our grand kids know what a Bitcoin is?
How many working professionals even bother to login to their 401k accounts quarterly, annually? Most outside of the finance profession say they hardly even look at their statements let alone the funds they are in. How many are in money market funds or short term reserves just by default? How much money really is on the sidelines?
Is Tesla a $1000 stock or a $10 dollar stock?
And so on and so forth.
These are the kinds of things that rattle around in my head daily.
What is on your mind?
Trent J. Smalley, CMT