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What If We Don't Know How This Ends?
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I’m in the middle of the keto flu right now so you’ll have to forgive me if I come across as angry, bitter, and resentful.
Okay, if I come across as more angry, bitter, and resentful.
It’s a byproduct of my quest to eat healthier in the run up to my 55th birthday. And yes, though it’s hard to believe, those are human years - no dog math here.
As I’m about to run smack dab into the double-nickels, an age I couldn’t conceive of reaching as a kid, I’ve started doing strange things. Things like obsessing about the weather, checking the sugar content on food labels, and saying “smack dab.”
You’re supposed to grow smarter with age, life’s condition clarified by the wisdom you gain only through experience.
In the market, screen time equals experience and losses are the battle scars that prove you’ve been through the wars.
Yet it’s easy to think you know it all because though the wisdom that comes with age is powerful, it’s prone to arrogance.
“I know how this ends,” is the preamble to binary judgements that far too often end up on the dismissive side of the ledger, blinding you to alternative outcomes.
For months now I’ve been writing about what needs to happen – based on my experience – before we can say a bottom is in. The short answer is things need to get ugly and shit has to break.
But it hasn’t, and for a few weeks now we’ve had a near picture perfect market rally. And some people, smart people, are beginning to make the case that the worst is over.
I’m still on the fence.
I once went to Cabo San Lucas for a weeklong bachelor party. We were the last plane in before they closed the airport due to an oncoming hurricane – and we thought we were lucky.
We were stupid.
For three days straight, insane winds and torrential rain battered our hotel. We were forced to hole up in our rooms and eat box lunches in a time before cell phones and the internet.
Even worse, we ran out of beer.
On day four we entered the eye of the storm, that eerily calm period after the initial damage is done, when experienced locals wait to see how much more is yet to come before blue skies emerge.
As hurricane newbies, we assumed the worst was over.
But storms by their nature lose strength over time and the backside of the hurricane was a cakewalk compared to its introduction.
Still, we would’ve been better off going to Vegas.
Right now, it feels like we’re in the eye of the storm.
Yet I can’t deny that while still sick, the market feels much healthier than it has in a long time as bad news is increasingly shrugged off and intraday price action has shifted to a consistent - though admittedly more tentative and polite - version of BTFD.
So, I’m open to the possibility that the bottom is in.
That’s the secret to aging, keeping an open mind. Finding the balance between a dogmatic insistence that things must play out as they have in the past and a reflexive rejection of how they might play out in the future.
And realizing that you don’t have to know how everything ends.
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It should go without saying - but I’ll say it anyway - all opinions expressed in The Lund Loop are my own personal opinions and don’t reflect the views of my employer, any associated entities, or other organizations I’m associated with.
Nothing written, expressed, or implied here should be looked at as investment advice or an admonition to buy, sell, or trade any security or financial instrument. As always, do your own diligence.