M2 money supply reaches its peak corresponding with a decline in the stock market. Coincidence? No. In April 2020 I posted the same chart with the words
"#MMT Everything"
Gov't Free money backstopped the risk to investors fueling a massive Stock Market Rally and Inflation.
Euphoria on Steroids.
Most made the mistake of reading market Euphoria as evidence that markets have superior knowledge and can predict future trends.
Permabulls and "Buy the dippers" felt vindicated that their strategy always works. Then 2022 came along and reality
changed their false perception.
Personally, I was highly doubtful of the 34-day bear market during the worst economic crisis since 1929. Despite facing criticism for my defiance,
I continued to hold my skeptical stance throughout the entire period of market growth. Even when the market reached its peak, I went short
and repeatedly warned others of the potential for a market downturn. However, my caution was met with ridicule and disbelief.
As a testament to my skepticism, I would like to share a video from January 21, 2022, which captures my thoughts and concerns during that time.
Every time there was a bear market rally, the permabulls and those who subscribed to the "buy the dip" strategy would tell me that I was mistaken.
They would argue that "markets don't care about economics." Even today, I still hear similar statements. This persistent presence of permabulls and
buy-the-dippers, eager to return to the era of government-backed investment risk, is a warning sign for me that the market has not yet reached its bottom.
It suggests that some investors are still too optimistic and may not fully understand the complexities and risks involved in the stock market.
In light of this, it is important to approach investment decisions with caution, carefully considering a variety of factors and indicators, rather than
relying on market euphoria or past performance as an indicator of future success.
I am very well aware that I risk being a permabear or at least being perceived that way by missing "the bottom." The truth is I am not concerned about
a bottom. I am concerned that my dynamic analysis of macroeconomics and charting gives me the green light that the worse is behind us. If it happens
to coincide with a bottom great! If not, so be it. I am only concerned with making money not being right and picking bottoms.
I leave you with this video from Feb 2022
"#MMT Everything"
Gov't Free money backstopped the risk to investors fueling a massive Stock Market Rally and Inflation.
Euphoria on Steroids.
Most made the mistake of reading market Euphoria as evidence that markets have superior knowledge and can predict future trends.
Permabulls and "Buy the dippers" felt vindicated that their strategy always works. Then 2022 came along and reality
changed their false perception.
Personally, I was highly doubtful of the 34-day bear market during the worst economic crisis since 1929. Despite facing criticism for my defiance,
I continued to hold my skeptical stance throughout the entire period of market growth. Even when the market reached its peak, I went short
and repeatedly warned others of the potential for a market downturn. However, my caution was met with ridicule and disbelief.
As a testament to my skepticism, I would like to share a video from January 21, 2022, which captures my thoughts and concerns during that time.
Every time there was a bear market rally, the permabulls and those who subscribed to the "buy the dip" strategy would tell me that I was mistaken.
They would argue that "markets don't care about economics." Even today, I still hear similar statements. This persistent presence of permabulls and
buy-the-dippers, eager to return to the era of government-backed investment risk, is a warning sign for me that the market has not yet reached its bottom.
It suggests that some investors are still too optimistic and may not fully understand the complexities and risks involved in the stock market.
In light of this, it is important to approach investment decisions with caution, carefully considering a variety of factors and indicators, rather than
relying on market euphoria or past performance as an indicator of future success.
I am very well aware that I risk being a permabear or at least being perceived that way by missing "the bottom." The truth is I am not concerned about
a bottom. I am concerned that my dynamic analysis of macroeconomics and charting gives me the green light that the worse is behind us. If it happens
to coincide with a bottom great! If not, so be it. I am only concerned with making money not being right and picking bottoms.
I leave you with this video from Feb 2022
Comment:
Despite this recent move higher in 7 stocks, nothing has changed for the overall market.
Comment:
The markets are starting to reflect what the money supply has been signaling. No surprise to us though right? If it is, click follow and like the post so you can learn more. :)
Real Macro Economic Investing
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Money contraction will cause prices to fall.
Basic arithmetic.