Posted by DigiNomad on 14th of Feb 2024 at 04:11 pm
I have been saying that a hot CPI would be a headfake down then
up because stocks mostly love inflation AND higher rates (seems
like no one believes the second part). Asset inflation is what
we're looking for, right? Well, a hot CPI and more spending
bills announced almost daily are the perfect recipe to dilute the
dollar, which decreases purchasing power, which means it takes more
dollars to buy the same assets (e.g. QQQ costs more today than it
did yesterday, without an increase in underlying value).
The day we surprise on the downside with inflation will be
the head fake up, then down.
Posted by icecoldjones on 14th of Feb 2024 at 04:19 pm
That does make a ton of sense Digi, it seems like everyone's
reaction the day of data is that rate cuts might get pushed back
and then it just releases the rubberband the next day or 2 as
inflation is good for stocks, like you said. It's overreaction and
then correction and I'm left holding the bag again...
Posted by DigiNomad on 14th of Feb 2024 at 04:26 pm
There are plenty of technical reasons to be cautious right now.
But caution due to a hotter than expected CPI print is not a good
fundamental reason for caution when
the whole game is picking the asset that will inflate the
fastest
yep, but that's just one part of the equation and you still
cannot just buy what you think will inflate the fastest and
throw caution into the wind throwing out technicals and not have a
strategy and an exit plan stop if your assets/assets do not inflate
like you think. Anything can and will happen with the markets, the
economy, it may play out like you think, or it may not, or take
some weird twist, happen faster than you expect, take longer than
you expect etc
basically - you should not just passively invest because you
think all assets are going to ramp higher because of inflation-
technicals and exit plans are synergistic part of the plan, just
like having life insurance when you have a family but you are
healthy and don't think you will ever need it.
plus let me throw another monkey wrench in - what can also
happen is you get all asset prices inflating higher to a point,
then boom the system crashes and you suddenly get the reverse
happen and things shift from super inflation to deflation. That's
always what I've been leaning toward, first an inflationary bubble
then deflation as it crashes
if the strategy is to just buy things because they have to go
up, why should Steve bother even doing all this work, we might as
well close BPT tell people to buy stuff and forget it
I have been saying that
Posted by DigiNomad on 14th of Feb 2024 at 04:11 pm
I have been saying that a hot CPI would be a headfake down then up because stocks mostly love inflation AND higher rates (seems like no one believes the second part). Asset inflation is what we're looking for, right? Well, a hot CPI and more spending bills announced almost daily are the perfect recipe to dilute the dollar, which decreases purchasing power, which means it takes more dollars to buy the same assets (e.g. QQQ costs more today than it did yesterday, without an increase in underlying value).
The day we surprise on the downside with inflation will be the head fake up, then down.
That does make a ton
Posted by icecoldjones on 14th of Feb 2024 at 04:19 pm
That does make a ton of sense Digi, it seems like everyone's reaction the day of data is that rate cuts might get pushed back and then it just releases the rubberband the next day or 2 as inflation is good for stocks, like you said. It's overreaction and then correction and I'm left holding the bag again...
There are plenty of technical
Posted by DigiNomad on 14th of Feb 2024 at 04:26 pm
There are plenty of technical reasons to be cautious right now. But caution due to a hotter than expected CPI print is not a good fundamental reason for caution when the whole game is picking the asset that will inflate the fastest
yep, but that's just one
Posted by matt on 14th of Feb 2024 at 04:39 pm
yep, but that's just one part of the equation and you still cannot just buy what you think will inflate the fastest and throw caution into the wind throwing out technicals and not have a strategy and an exit plan stop if your assets/assets do not inflate like you think. Anything can and will happen with the markets, the economy, it may play out like you think, or it may not, or take some weird twist, happen faster than you expect, take longer than you expect etc
basically - you should not just passively invest because you think all assets are going to ramp higher because of inflation- technicals and exit plans are synergistic part of the plan, just like having life insurance when you have a family but you are healthy and don't think you will ever need it.
plus let me throw another monkey wrench in - what can also happen is you get all asset prices inflating higher to a point, then boom the system crashes and you suddenly get the reverse happen and things shift from super inflation to deflation. That's always what I've been leaning toward, first an inflationary bubble then deflation as it crashes
if the strategy is to just buy things because they have to go up, why should Steve bother even doing all this work, we might as well close BPT tell people to buy stuff and forget it
Like I said below: There are
Posted by DigiNomad on 14th of Feb 2024 at 04:46 pm
Like I said below:
There are plenty of technical reasons to be cautious right now.
The day we surprise on the downside with inflation will be the head fake up, then down.
Between the two I think I covered the same bases you mention.