Short market comment

This is basically the same text I used as an answer to a comment on a previous post:

In short: Stocks are currently (March 16, 3pm Central European Time) down by 33% from February 20, 2020. My base case if the corona situation develops in a benign and controlled fashion is another -33% (to a total of -55%). That should take most stocks to fair value, not cheap, and enable fundamentally based investments.

If things turn ugly we could see a third -33% (to a total of -70%), and given the adverse effects on the economy that would still not be cheap, just fair. Worst case scenario is a fourth -33% (for a total drop of 80%) on top of the first 3.

I expect maximum quarantine/lockdowns in most of Europe by end April and maximum US by end of May (with perhaps 50m US citizens infected). Maybe stocks will bottom by then, since everything about this crash is faster, bigger, more frequent than usual. But the recession and financial crises that follow will probably take markets to a lower low further down the line. In any case we should see a bottom for stocks within 12 months from now, as long as we don’t get a second virus attack of a different strain (unlikely but could happen).

as long as we don’t get a second virus attack

Volatility will be much higher than anybody expects, except Hussman. We could see rallies and drops by 20% on single days (circuit breakers prevent more than -20% and close the market for the rest of the day).

If central planners manage to lift markets with a quadrillion in helicopter money, gold will rise even more than stocks. I would take every opportunity to load up on gold and Bitcoin now that they are falling with the rest of the market due to margin calls. I don’t think gold will fall below 1250. And I think it’s an extremely good buying opportunity here at 1475.

And 6 months from now silver might bottom at ridiculous levels and provide the real buying opportunity of the century – or at least the decade. Maybe silver will rise by 1000% from 7 or 10 to around 100 in the coming years. And gold could go to 5 000 or 10 000 USD/oz after the current little correction.

NB, NO recommendations given here. Do your own research. I hold no licences and I never give recommendations to buy or sell financial instruments or anything else.

Code is code

Life: energy first, or information first? Entropy / Energy. Erasing information. Laplace’s demon.

We’re always travelling – we’re always in flux

Nothing can be described, there are no solid truths, since that entails a mind in flux capturing a universe in flux

There’s very limited overlap (if any at all) between symbolic language and what it tries to represent

McKenna: Enlightened ideas can never be communicated

The TAO that can be articulated is not the real TAO

Cratylism: reality can never be captured in language

Creation, life, consciousness, technology, AI, nature of reality, quantum mechanics, TAO, relationsships, economy/society, value creation, trade, money => I want maximum perspective

The best thing that’s ever happened to me

-Vi Reser Alltid

When I was 8 years old my family moved to a fancy part of a mid-sized Swedish city, Västerås, not very far from the capital, Stockholm. There I became bullied for my northern accent, cheap clothes and mental state (my big brother drowned before my eyes the same summer we moved, my parents got divorced [toxically], and I had a slight autism spectrum issue).

It took some time, but being bullied was the best thing that ever happened to me. It didn’t kill me, it made me stronger. With time I became impervious to just about everything, extremely resilient and calm, which helped forge a successful career in finance.

As the 40 ensuing years passed by, I often reflected over my luck in life. Everything seemed to go my way. Sure, I had a few minor setbacks, but I always quickly bounced back up a lot higher than before. Every single year was better than the year before – and they were pretty good from the start.

For example, when I was 18, I dated an incredibly pretty girl, and I received something akin to a small Nobel Prize in mathematics and physics for being the best performing student in middle Sweden over three years, and I was admitted to Sweden’s most prestigious University. From there, everything improved each year in an accelerated fashion: materially, relationship-wise, my subjective experience and so on.

I have very good reasons to assume my particular life configuration, including physical health, brain chemistry, cultural and socio-economic starting point etc., makes me perceive every year as better than the preceding years.

So, whenever I encounter a setback of any kind, I kind of expect a reward in due time. Everything that happens to me is simply regarded as a harbinger of bliss. Which brings us up to date.

Retiring in 2014 definitely was a genius move, the best thing that ever happened to me up till then. Now that retirement is drawing to a close. As fed up as I was with finance in 2014, just as excited I am today about both sharing my knowledge (through the Swedish course in fundamental equity valuation: Finanskursen) and practicing it again as a professional hedge fund manager. You’ll get the details about my getting back to work during the first quarter of 2020.


Per Ardua Ad Astra

However, that wasn’t what I set out to share today, but the following. By midsummer of 2019 by life kept setting new all time highs at a frantic pace. I almost expected to be diagnosed with a brain tumour, like John Travolta in “Phenomenon” (1996). In June I went as far as to say, the last five years, and in particular the last 5 months, have been so good to me, life could throw anything my way, including death, and I still would consider the total package a great deal.

And, boy, did I get what I asked for! Considering my gruelling experiences the last 5 months after that, i.e., since the day after midsummer, which started with my dog passing away, I’m expecting some major breakthroughs coming my way in due course.

Everything I’ve gone through in my life has ultimately proven to be the best thing that’s ever happened to me – perhaps not causally, but with uncanny synchronicity. So, why should my experiences with pain, loneliness and hearthache this fall be any different? Given what I know to be true about my history and my constitution, these experiences are bound to morph from hellish torture into the best things that’s ever happened to me. 

What doesn’t kill you makes you stronger, and I’m still kicking.

Here’s to looking forward immensely to getting to know in which way the twists and turns of summer and fall of 2019 were the best things that ever happened to me, objectively, materially, relationship-wise, perceptionally etc.

Remember, we’re always travelling (Vi Reser Alltid — my motto in Swedish), and that’s a good thing. Being static is being dead.