I'd Rather Be A Bull
How Do I Get There
It’s coming up on almost the two year mark of my first “look out here comes the bear” post. Although early, I didn’t make many friends and for good reason; the herd was on the bullish side and all newly minted Robinhood using “investors” knew all they had to do was “click ‘n buy” then wait for a higher price to sell. Those “were the days my friend” and most thought they would never end; except those with experience dating back to the 1970s. We knew better but no one listened; they are now which is why I’d rather be a bull.
If I was bullish the number of investors hitting my posts would double. Criticism of the macroeconomic and geopolitical spectrums would disappear, the oceans would cease rising and the world would live in peace. Since that ain’t going to happen, or at least not all at once, let’s examine what it would take, from a macroeconomic outlook to change my perspective from bearishness to becoming bullish.
In essence this is the way I evaluate the overall “direction” in establishing how I look for trades, you know the spikes or “wicks” spoken of in a couple past articles. I don’t trade much. My philosophy is to assess the overall macroeconomic world then look for aberrations. In other words, since being currently bearish, I’d look for a day when the markets, or whatever I’m looking at, go in the opposite direction to my analysis. Using the technical side of the equation, primarily Volume Profile coupled with short term Footprint reversal charts, I look for when the buying is extinguished, the rally is done then enter on the opposite side. It’s risk averse in nature since most exaggerated trades have a tendency to revert to the mean. Mathematically everything does so its a good rule to follow. I call this Position Trading and currently I am putting together a course to teach it to you. It’s much more of a challenge to structure a course to teach from rather than it just being a strategy I employ; thanks for your patience.
In the interim, today’s dissertation deals with a few of the macroeconomic indicators I analyze and what they would need to reflect to turn me from being a bear into a bull.
Geopolitics - Since the world is not yet controlled by the AI forces we’ve invented the world we live in is still controlled by the people we elect who make decisions and rules we abide with. I’ll try not to get started on a political rant but without a doubt, a change or different expectation as to “who” is running the United States and the other key regions of the world is a quintessential part of my analysis. Not being a fan of any “political swamp”, a fervent advocate of “term limits” and truly a Libertarian at heart, “what’s” currently in control is not of my liking. A change in how the world is run, or at least an indication that change is on its way is going to be a necessary criteria of my turning into a bull.
Money Flow - Perhaps the most important macroeconomic function taught to me by Allan Meltzer was the flow of actual capital, internally in the United States and throughout the economically developed world. Balance was key, understanding an interaction between (1) cash; (2) credit; and (3) government spending existed made my analysis simple. In today’s world the plans set forth by the “powers that be” more so deal with correcting prior mistakes, almost fifteen years of them. There really isn’t a plan at this time other than correcting the problems we’ve created. For me to turn bullish I’m going to need to see the leadership in place competent enough to put together a long-term plan not just determine the best “bandaid” to use to get us from problem to problem.
Indicators - From Warren Buffett all the way back to when Graham & Dodd ruled investment philosophies worldwide, there existed quantifiable economic metrics that when followed produced consistent, replicable results. “It’s just the math” is a saying I quite often use and it’s true. Analysts, far more expert and capable than me, are out there and produce advisory publications that need to be followed. The last few years has brought an investment vehicle back into the mainstream that in the prior twenty or so years had been extinguished; debt. As a “bear”, I sensed the markets and the investments therein were going to head south. The logical part of any investment strategy is to limit risk and avoid losses. There was an easy choice to be made; “buy bonds”. When that side of the investment equation reverts back to overall returns from growth stocks and dividends exceeding risk less purchases in government bonds becoming bullish will become an easy choice to make.
Expectations - People and their actions rule the investment arena. For years, all the newly minted experts had to do was buy and wait. Then the “meme” stocks and the proliferation of commentary on social media about how traders were up 100% or more in short periods of time took over. What happened to them when that bubble burst? Reality is a wonderful world to live in. Investors being able to witness first hand losing money is key to learning. It’s started but there’s still too much hype associated with “making a killing” either with the next 10X bagger or day, scalp or swing trading yourself into aa occupation most of you can do from your bedroom in your pajamas. When these types of newly minted “investors”, a term I use lightly, begin to perceive the “reality” that a 10% return is pretty good I’ll turn back to the bullish side.
Yeah, I’d like to turn bullish but there’s a few too many cursory reasons recited above that keep me on the bearish side of the equation; but that’s changing. It’s changing in part due to what The Ticker EDU has in mind. From telling you what tools I use and how I use them to putting courses together about Position Trading, the exact how’s and why’s of trading “my way”, the use of options and more leading up to “my picks”. It’s all on the way intended to help you be the best damn investor and trader you can possibly be. Again, Rome wasn’t built in a day so thanks and stay tuned.
With respect to the “markets” the “swamp” is doing their “kick the debt limit can” down the street until there becomes a crisis to solve. Maybe this time McCarthy will have a big enough set of “kanuchies” to let the government default for real. I’m sure Yellin will find money somewhere to keep the spigot turned on for a couple weeks or more so at least the interest on our far too large debt gets paid. It ‘s time for the “far too long in office” politicians to face the music for problems they’ve created. I could ramble and rant on this for pages and pages; just stay out of my bedroom, keep away from how I choose to raise my children and quit spending money you don’t have. Now that’s not too hard, is it?
Hope you enjoyed this post. I’m just a young 68 years old; my Dad became a broker when I was 13. It’s time for me to ‘give back’ to all of you what’s in my head. It’s not always pretty but it’s based on history . . . and history, unchecked, repeats itself.
Everyone learns at their own pace. If you pick everything up the first time through, great but if not email me at david@thetickeredu.com so we can further help. Thanks again go out to Danny www.mrtopstep.com . . . check him out; he’s worth your “click” and thanks to all of you who have adopted what is being created and presented; we’re humbled by the response and referrals. Again, let me know what you want to learn, I’m all ears.
Yes, those were the days my friend . . . hope you enjoy this one-hit-wonder . . . have a good weekend; catch up to you with “The Week That Was & What’s Next” on Sunday night. Thanks for helping it “rise up the charts” and recommending it to others.