New World Order

Everything, everywhere, all at once

Usually, I would say there is nothing new under the sun; there are no new paradigms. Status quo is always your best guess. So, just relax and keep at your processes. Take just one ridiculously easy step to make sure you get started at all. Then take just one more. As you were.

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But as it always does, the cycle turns. In effect, it’s more of the same, just one more cycle. For everyone under 100 years old, however, it seems new, since it hasn’t happened in about a century. So fuck the status quo for now. The new is the same.

According to The Generation Theory, as well as the Fourth Turning idea, once every 85 years the paradigm shifts markedly – not to something completely new, but to a regime reminiscent of the ways things were 85 years ago.

Money. War. Institutions

The last time there was a Fourth Turning, we experienced a stock market crash in 1929-1932, a total war in 1939-1945, a new currency regime starting with Bretton Woods in 1944, the formation of the UN in 1945, as well as The European Coal and Steel Community (ECSC), a.k.a. the European Union, in 1952.

All of this seems set to repeat itself.  New war, new hegemony, new money, new governing bodies, new alliances, new politics. 

 

Plus ca change…

The details need not be exact, but nobody relevant today has any first hand memories of the 1930s and 1940s. If you turned ten in 1952, you’d be 80 today – most unlikely to be particularly influential. Hence, for all practical purposes, the WWII, UN, BW and the foundations of the EU are all lost to the history books. Hence, the mistakes are due for a retake.

I think most of the 2020s will be tumultous. Financially, economically, politically, and not least geopolitically. There will be war, pestilence, famine and death. All the riders of the apocalypse are actually already in the bag; just take alook at Ukraine, food shortages and the pandemic. But there will most likely be more.

Ukraine is not the war, it’s just a battle. The real war, the total war of the Fourth Turning is about the next long term superpower(s) and the New World Order for the rest of the 21st century: physical and digital. Who will control the most important physical resources in terms of energy, metals and food? Who will control the media, the narrative? Who will control the money? Who will control the heavens (space)? Who will decide what’s accepted behavior, what’s allowed?

Politics: First Trump, then AOC

I think Trump will win the 2024 presidency, due to the Biden administration being perceived as too weak in the face of strongman Putin’s brinkmanship politics, and Xi Jinpings exaltation as supreme and glorious leader until his passing. Since Trump can’t run in 2028, and since the US economy and its global status have been run into the ground by the end of his term, Accidentally Occasional Cortex will run in and win the 2028 election. She will for good and bad usher in a new era of socialism for the more and more marginalized USA. Maybe she’ll even serve more than two terms (!) We’ll see. In any case, she won’t fire off any nukes, no matter how rich and powerful China becomes. She’ll be too occupied levelling the playing field within US borders to fight external wars.

The long bear goodnight until February 14, 2023

The bear market will last longer than most expect, and the central banks will be more hawkish than most anticipate – willing to sacrifice the working class and shareholders alike in order to tame stubborn inflation. The ultimate nominal bottom might very well be reached already in November 2022, but could also be the result of a final capitulation “puke” a full year later before the usual election stimulus cycle takes the reigns. My best guess is the final puke comes around the turn of the year to 2023, maybe when Q4 earnings and 2023 outlooks are published – or slightly after when the reports are fully digested,  i.e., in January or February 2023.

As always, there will be vicious bear market rallies along the way. Be ready during earnings seasons and around FOMC rate decision announcements. CPI announcements might be key as well. Tread carefully. Don’t be a hero. Don’t use leverage. Focus on value.

We’re actually due a rally right about now, I think (timestamp: July 15, 2022). I would have thought relatively decent corporate Q2 earnings reports would’ve already triggered a rally, but so far too high inflation numbers have weighed more on traders’ sentiment.

Anyway, I’m tilted slightly longer than average in my hedge fund Antiloop’s L/S Equity strategy. Waiting for Godot. Rally anytime now. Ready here…

I’m long cheap “value” and short expensive “tech” and “hype” stocks. Not very sophisticated, but nor is the market. Just short everything ARK owns, and be wary of the rallies, and you should be fine. I’m buying long term real assets such as mining stocks, oil majors (Conoco, Chevron), gold miners (AEM, NEM), and fallen tech angels like SPOT, GOOG, INTC, MU and META. I also like car manufacturers and Nordic banks, plus select take-over targets lika Elekta (medtech) and salmon farmers (Austevoll).

When the final puke comes, I expect central bankers and politicians to pivot like never before. In the US either Biden during the Democrat presidential campaign, or Trump right after winning in 2024. The mother of all stimulus will drive stocks, inflation, gold, mining stocks, real estate, interest rates and so on. It’s hard to pinpoint any losers except ordinary workers, left behind by robots and asset holders. And then the deluge, the crash of crashes. The crash to end all crashes around 2027-28, which hands AOC a landslide victory on a platinum plate.

Preppers be prepping

The details don’t matter. Neither does the order of events. The message is one of turmoil, of fast moving markets, of opportunities abound. Where will you live (country, city/countryside)? What money will you use (gold, silver, Bitcoin, Ether, Monero)? Where will you keep your wealth (land, real estate, gold, stocks, bonds, crypto, art, farmland)? How will you make a living? What skills will you hone? What education will you get? What network will you prove your worth to? How will you go from your conventional position today to an unconventional position just ten years from now? There is a risk in moving too early, and another in moving too late.

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The emergence of things from relations

TIP: Get it together and finally get a Revolut card (click ‘Revolut‘). It’s the only card I use, owing to the free foreign exchange transactions, not to mention how easy it is to invest/speculate/get exposure to both ordinary fiat currencies and a lot of different crypto assets. The fees are non-existent or negligible, just as the spread between buying and selling is. 


The Components Fallacy – wholes are not made of parts
I’ve been thinking about emergence and entropy lately; what they are and how they are related. Information theory, intelligence and consciousness also sprung to mind in the same context. They all seem to be different aspects of the same thing.

Let’s start with emergence, the idea that the whole can be greater than its parts, or at least that the whole, for example a gas cloud in a box can be understood as good or better in terms of a few macro data (pressure and temperature) than making calculations for every single gas molecule.

 

What is dead may never live


Emergence can be weak (it’s simply convenient to talk about chairs and tables, rather than their constituent elementary particles and wave functions) or strong (the whole is greater than its parts; water molecules aren’t wet; particles have no consciousness. The wetness and the consciousness  emerge as something new from the particles’ dance. Actually, quite like a dance or a song, really can’t be reduced to steps or notes, but are flowing wholes of the relationsships between their constituent components.

The dance doesn’t exist anywhere in its particles, only in the living process, betweens and relations. A simple machine has parts, it is its parts. But a living thing is not its parts; it’s not the same anymore after turned off, if stopped. Often it can’t even be started again. Hence dances, songs, life are not at all like machines built from components. Processes are something different altogether, non-reductionistic, only existing as wholes. Back to the topic of going from the bottom and up, i.e., emergence, rather than vice versa:

We can talk about objects like chairs and tables without knowing or caring about particles and quantum mechanics. In that respect, emergence works, it is real. At least for us people. However it might very well be real to us just because the macro level is our everyday level. That is the only level we understand. The top level was always going to be our ultimate reference level, the benchmark for what is real, what works.

The bottom level on the contrary is almost unfathomable, not “working” as far as intuition goes. Down there it’s just information, labels like charge, numbers accompanied by rules for how one number interacts with another number. We call it particles, we imagine small marbles zipping around, but they are “just” vibrations or excitations of a field. And the field isn’t tangible, it is itself just dimensionless numbers strewn about– just a way of keeping count, of governing the interaction with other numbers. There just isn’t anything there, with “anything” and “thing” and “there” defined as our everyday experience of tangible stuff being in a particular position, with a particular velocity, momentum and amount of kinetic energy.

The bottom level does by the way work from a scientific point of view. It works extremely well, better in fact than the top, macro, level. The bottom, quantum, level thus seems to be the true description of reality. And our macro world is just a neat result of weak emergence, of averages working, quite surprisingly, well enough for almost any basic application, except electronics, time measurement, particle physics and close-to-the-speed-of-light experiments.

It really is amazing that the everyday macro level does emerge from the beyond weird micro level. Macro things stay in place with absolute dead certainty, while their micro parts can’t be trusted to be neither here nor there. The question I am building up to is whether truly new macro things emerge from the micro level, and whether these emerged entities can effect, govern, the micro level, i.e., not only be the most effective descriptor, but actually writing the script for its parts.

The motions of a flock of birds, as well as the motions of the flock’s individual birds, can be more effectively predicted by modelling the flock than by following a single bird. The flock does indeed seem to have its own life, and be governing the motions if its constiutuent birds.

Similar things occur in songs, dances and consciousness. The next note of a song can be guessed from the song so far, even the very first time you listen to it. But the song in no way affects what notes it is composed of. How about consciousness. Does it emerge from some physical and biological processes, from the dance of molecules and energy? Can it affect it’s own contituent thoughts, affect the movements of the body, thus exercising “free will” upstream on the consciousness’s parts; independent of the physical laws that already govern how particles and fields interact while never creating or destroying any energy in the process?

Energy, by the way, isn’t real either. It too is “just” a useful accounting trick. Energy keeps track of information that enables predictions for interactions, but there aren’t any energy units anywhere. There never were any energy to begin with, and none was ever created. Things have momentum, i.e., mass and velocity. The zip about, crashing into each other, thus changing their respective speeds. Their labels thus change, but the sum of all energy labels always amount to zero. There is no energy, energy just tells us what to expect from an interaction. Energy thus is just a specific kind of information. Just like entropy is information about what we don’t know or can’t know, often called the level of disorder, perhaps the level of what’s not known about interactions.

Everything comes down to relations, dances, interactions:

There are, e.g., electrical charges, labels of plus and minus (but nothing tangible to pin the labels on, the labels are just there, ready to govern charged particles’ interactions).

And there are rules of interaction between quarks.

And then there is that curved space thingamajig, that gives the appearance of masses pulling on each other. A massive object, i.e., something assigned a mass number, bends space in a way that makes it seem as if other massive objects are drawn to it and vice versa. Mass governs (bends) space and time; and space and time govern the interactions of masses. It’s all a dance, there are no things, no particles, no bottom, just interactions, in betweens. The relations govern what is; the very existence of a particle, a thing is dependent on its relation with other nodes. The nodes, the relata is secondary to the relation. No man is an island, the elementary particle version. Where does this dance take place? In space? In time?

Animals experience space, but is it real? Is room a fundamental aspect of reality, or is that also a kind of accounting? In a computer game there is the appearance of space and objects, but from our point of view that space och those objects don’t exist. Where did space even come from to make room for massive objects to bend it? Can you have masses without space and vice versa?

All of the topics of discussion today, space, mass, energy, time seem like accounting tricks. It’s all just information about relations. Without relations there is nothing. Reality, life, consciousness are a song and a dance. There are no things, no units, no relata, just relations, pauses, in betweens, information about relative positions (not in space, just… relative as apart from absolute).

How do relations form without relata? How can anything begin. It’s an amazing feat of science to have made people accept the Big Bang theory as explanatory: Oh, you know everything just suddenly exploded into being from nothing. It was a fluke fluctuation in nothing. Wut? That‘s the foundation of science?!

Okay… let’s accept there is something. We all feel here, real, alive, conscious. That’s undeniable. We have that information.

Our current picture of “being here”, of existence, is that things happen with a likelihood.

Further, nature abhors differences; nature tends toward a smooth chaos with no islands of complexity. Lock a bunch of gas particles in a box and they’ll bump around until they all have more or less the same speed and are evenly distributed. Lock a universe in a box and with time, it seems, it will turn into a uniform sea of radiation, all stuff gone, all patterns gone. The only thing left being a more or less infinitely diluted radiation energy, basically zero everywhere. Maybe that’s an accurate description, maybe not. Our models can’t be relied upon for such long term predictions.

However, that’s of no importance to us.

In the short term, our pressing reality is that eggs tends to break, not the other way round. And still, life and consciousness are moving in the other direction — toward increasing complexity. Wut? How can the governing principle of increasing entropy, of an all-encompassing smoothing out, result in growing islands of increasing complexity, i.e., falling entropy? Further, we seem set to spread among the stars, thus exporting complexity to the rest of the galaxy. How can that be?

Gravity, quantum fluctuations, inflation and evolution worked together to create planets with conscious life-forms. That pesky gravity took an almost uniform cloud of hydrogen and made a trillion galaxies with a trillion different planets in each galaxy, and on at least one planet made conscious humans. The ultimate island of entropy defiance. Right here, entropy is falling, but Earth is radiating high entropy energy ever faster, almost as if life itself was just a tool to hike the speed of increasing entropy in the universe.

So, does entropy increase or decrease? And what is entropy? Is it correctly described as Disorder? Information about what could have been but isn’t? Is time an essential variable, or is the tendency toward increasing entropy enough to describe interactions and “The arrow of time”? Time seems more and more emergent, just a neat way of accounting for increasing entropy. Like space being a neat way of predicting how various stuff interacts, rather than being a truly foundational aspect of existence.

The more I think about the foundations of existence, the less I think we are anywhere close to a true description with the standard model of quantum fields acting on a canvas of space-time.

My guess is that we’re on the completely wrong track altogether. Information may be the foundation of super strings that explain quarks and atoms all the way up to water molecules. But the wetness of water isn’t “emergent”, it too is just a handy notion for us conscious macro beings; a variable to consider for our fitness equation (Donald D Hoffman), i.e., how to most effectively manage our interactions with other fitness point seekers in the cosmic game of Pokémon Go.

I think Existence is consciousness all the way down. Nothing is material, there is no real space, energy or time, just a “game” for consciousnesses vying for fitness points.

Even that doesn’t even begin to consider how the game started, how the relations got going, how something whole and non-existent got going not to mention divided into parts. If we did, however, begin as a divine sine wave, eclipsing itself with a perfectly opposite wave phase, before exploding into Hilbert space or something; the boredom of being conscious with nothing and nobody to do, would surely have made us look for ways to divide into separate parts. We seem to have succeeded. And thus the whole split into parts with less substance together than the whole.

Does it matter?

Does it matter if we are evolved meat sacks in a Big Bang universe, or avatars in our own cosmic game?

Not really, but I still think it’s worthwhile, important really, to realize we really know exactly nothing.

Nothing adds up. Our puny imagination just keeps assigning notions, reductionist labels to ultimately meaningless hypothesized components, when what we are is a set of relations that can’t be reduced to lifeless parts.

To be perfectly clear, we aren’t parts. We aren’t composed of lifeless marbles that magically (through emergence) spring into something greater. I have no idea of what we are, what is happening, how anything began, how it ends, and so on. I do know nothing is what it seems to us.

The capacity for surprises is endless, even just judging from a human materialist perspective.

Does matter matter? Well it does for us right now. However, the matter with things is that they aren’t. Matter, like space, energy, time and entropy, most likely is just a notion we conscious macro beings find handy for our little game.

Welcome to the real world.

Best,

Mike

Så lär du dig aktieanalys i 12 enkla steg med Finanskursen

Jag har jobbat med professionell aktieanalys och förvaltning sedan 1994

Innan dess läste jag till en Master i finans på Handelshögskolan i Stockholm med start 1990. Jag har alltså ägnat mig åt aktiemarknaden i 32 år nu. Just nu är jag förvaltare på hedgefonden Antiloop tillsammans med en handfull kollegor, bland annat Martin Sandquist som grundade hedgefonden Lynx. Vi jobbade parallellt med varandra i nästan 15 år på varsin hedgefond i Brummergruppen. Min hette Futuris.

Min investeringsmetod är främst baserad på ett företags faktiska värdeskapande

Det betyder att jag vill kunna se hur mina investerade hundra kronor köper mig rätten till ett resultat i företaget som med hög sannolikhet motsvarar klart mer än hundra kronor inom några år. Metoden skiljer sig från att till exempel köpa aktier enbart baserat på utseendet på en kursgraf.

—–

“Om jag inte med hög sannolikhet i genomsnitt varje år får tillbaka minst 110 kr på en investerad hundralapp så är det ingen bra idé. Då handlar det mer om spekulation än investering”

—–

För några år sedan började jag sammanfatta min metod för att analysera och investera

Det resulterade i 12-veckorsprogrammet Finanskursen. Nästa omgång börjar söndagen den 1 maj. Men om du är intresserad av att gå kursen är det bäst att göra en tidig ansökan innan den 17 april för att vara säker på att få en plats. Det är alltid många som är intresserade av att lära sig aktieanalys och hittills har över 400 personer gått programmet. Nu senast i vinter höll jag dessutom kursen i form av tolv entimmeslektioner på engelska för London Business School.

 

Gör en tidig ansökan till Finanskursen senast den 17 april

 

Du hittar all information om kursen på hemsidan

Där kan du göra en tidig ansökan. Det kostar förstås ingenting och du förbinder dig heller inte vid något. Och skulle du ångra dig efter att ha påbörjat kursen har du full returrätt i 20 dagar helt utan att ange några särskilda skäl. Av över 400 som påbörjat programmet är det bara några enstaka som har hoppat av. De har själva spontant uppgett att det främst berodde på oförutsedd tidsbrist. I ett enda fall var det en mycket ung person som sa att svårighetsgraden var för hög.

Kursen går ut på att lära sig se om en aktie är tillräckligt billig för att motivera en investering

(eller så dyr att man tydligt bör undvika den tills vidare). I absolut kortast tänkbara drag kan man koka ner analysen till att beräkna hur lång tid det tar innan bolagets årsvinst uppgår till minst en tiondel av bolagets börsvärde. Lite längre uttryckt kallar jag det för att identifiera en aktie som är BRUM: Billig, låg Risk Uthållig, Medvind

  • tillräckligt Billig
  • med hänsyn till graden av Risk i form av prognososäkerhet
  • har en Uthållig affärsmodell och konkurrensfördelar
  • investeringsidén har Medvind (eller begränsad motvind) i form av den generella ekonomiska omgivningen (makroanalys) och aktiens trend och kursmönster (teknisk analys)

Typiskt sett ska det finnas en rejäl säkerhetsmarginal

…mellan företagets sannolika vinster å ena sidan och vad som krävs å den andra sidan, för att investeringen ska ge positiv avkastning. Prognoserna ska heller helst inte bygga på att dramatiska förändringar måste ske i omvärlden eller för företagets egna utvecklingstrender eller värderingsnivåer. Däremot är ett gott tålamod och psykologisk motståndskraft mot grupptänk viktiga egenskaper för en värdeinvesterare. Att aktier kan bli billiga beror per definition på att andra inte har märkt det. Det kan ibland dröja flera år innan andra inser vad man själv har förstått.

12 enkla steg för att bli en bättre investerare

I Finanskursen visar jag bland annat 12 steg för att analysera och investera i aktier, inklusive uppföljning, utvärdering, redovisning och strategiuppdatering:

  1. Filtrera fram investeringsalternativ baserat på vanliga nyckeltal och andra variabler som passar din investeringsstrategi
  2. Prognostisera fundamentala räkenskapsdata, värderingsnivåer och aktiekurser genom att extrapolera historiska intervall och trender
  3. Modellera tillväxttakter baserat på t.ex. förändringstakter, andraderivator, S-kurvor och marknadsmättnad
  4. Analysera affärsmodeller & ekosystem, konkurrenssituation
  5. Läsa & Förstå Årsredovisningar, grundläggande redovisning, skuldanalys, fordringar & räkningar
  6. Värdera tillgångar på absolut basis med DCF-analys och tumregler för värderingsmultiplar
  7. Rangordna investeringsalternativ baserat på risknivå och årlig avkastningspotential
  8. Tajma och vikta investeringar baserat på medvind/motvind från teknisk analys och makro
  9. Konstruera en portfölj av aktier baserat på Risk/Reward-kvoterna, samt med viss inspiration från MELUDI-ramverket för rätt val av bransch, och undvikande av för högt korrelerade innehav
  10. Optimera och underhålla portföljens nivå av risk & potential genom periodisk rebalansering
  11. Anteckna & Utvärdera investeringsargumenten och investeringsresultaten för att kunna uppdatera din investeringsstrategi och din anteckningsrutin
  12. Redovisa din analys och investeringsrekommendation i en kort och koncis välstrukturerad text

Finanskursen ger dig dessutom en mängd andra verktyg och analysresurser

Finanskursen innehåller mycket mer, till exempel mitt ramverk TAOS med en investerares tolv viktigaste karaktärsdrag där just Tålamod framhålls som centralt; och RANGEr-metoden för aktiekursprognoser och beräkning av riskjusterad potential. Bland allt extramaterial finns en samling länkar till rekommenderade böcker, podcasts, databaser och internetresurser för att göra bättre analyser. Då blir man också en mer effektiv investerare som investerar med säkerhetsmarginal.

Och framför allt undviker enkla misstag. Gör man det tar uppsidan över tid hand om sig själv på aktiemarknaden.

Låter det här som något du är intresserad av att behärska så finns all information om nästa omgång av Finanskursen här. Gör en Tidig Ansökan innan den 17 april eller konkurrera med resten de sista två veckorna. Jag hoppas vi ses den 1 maj.

Alla investeringsprocesser biter sig själva i svansen som den mytologiska Ouroboros