Category Archives: Liquidity

Cared to Rewire?

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Hey.

From this point onwards…

…it all boils down to…

…stamina.

Theories for market success have been out there, in abundance, since eternity.

Everybody can read how the richest man in Babylon…

…got rich.

Or how compounding works.

Position-sizing.

Entry quantum.

Margin of safety.

Profit run.

Multibaggers.

Engines of income generation.

Entry into the territory of wealth.

Generational wealth-creation. Etc.

Yes. Everybody can read. Or listen. Or both.

Question is…

…how many can follow through?

Of those who set out, how many can remain grounded and focused when the heat is turned up, like now?

Most importantly, how many can finish?

I would estimate that a low single digit percentage walks the talk to successful culmination.

Why?

You see, heat does something critical.

Once it is turned up, it burns out all nervous systems that haven’t been rewired.

Given that we are not born with nervous systems programmed towards market success, we need to rewire them over the years and over the knocks. Once fully rewired, our nervous systems can withstand, pivot, and generate wealth over prolonged strife.

As this crisis continues, more and more players will start to cave in.

Capitulation at lows.

Others will stop all activity owing to fear, but might not sell. They’ve frozen. Better than capitulation.

There will be some who cash out with the intent of getting in lower, cannot then find the courage when the lows come, and then join their frozen compatriots as the reversal arrives and accelerates.

Still others, with funds safely picked away in fixed deposits, will be afraid to bring them over to Equity. Fine. They are behaving as per their risk-pr0file. At least they are in control of their behaviour.

Rewired market entities will be acting. They know what to buy. Markets give ample time to study, and all kinds of preparation will have been done, like, yesterday. These folks will have started buying upon the arrival of their levels. Clockwork. Small entry quanta. Position-sized as per their risk profile. Programmed to keep entering for a long period. That’s how they will have positioned themselves and their liquidities. These entities will show stamina and will outlast everyone to still be buying at market bottoms and slightly beyond. They will emerge with the lowest buying averages, and will make the quickest multiples upon reversal, after which some will pull their principles out, while others will ride their holdings to multibaggers.

Who do you want to be?

It’s ok if you don’t identify with any of these categories. Find your passion elsewhere.

Or, self-PhD to a rewired market mindframe, sooner than later. Preferably – now. This crisis could even just be beginning. No one knows. Since no one also knows how long it will last, for all you know, you could still get a year or two’s great buying ahead.

Wishing you lucrative investing.

Constants

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Waldermort…

…overplayed his hand.

Thought he had the nuts…

…and bet the farm.

Turns out…

…that the adversary’s hole cards…

…plus the flop, turn and river…

…are leading to a full house.

As opposed to Waldy’s…

…ordinary nut flush.

Waldy is oversmart and a half.

Backfires at times.

This one has backfired at the worst possible time.

Only one result.

Waldy loses…

…everything.

Reserve status.

Serious player status.

Reputation, if there was any.

Loyalty, which was abundant from former allies, but is now…

…not even zero, but minus.

What more can one lose?

Whatever one can. It’s lost.

When this is over, a new methodology of doing everything business and financial will have emerged.

Meanwhile, a few constants remain.

There are areas in the world, where there is growth.

And will be, for the next 25 years.

Like India.

Semblance of stability?

Yes.

Integrity?

Yes.

Win-win attitude?

Yes.

Loyalty?

Yes.

Balance?

Yes.

Clout?

Yes.

Consumption.

Yes.

Period.

Buy India during this fall.

As long as the fall lasts. One year. Two years. Three years. No one knows.

What one also doesn’t know is whether India will give this buying opportunity again.

So, buy India.

Even if it means that you get fully invested during current fall.

That’ll be just great.

Recognition

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Hey.

Don’t cry for me.

I’m doing well.

At times I’m down, when I seek recognition in the outer world, from people, from a country, from an institution, etc.

Since these sources have nuances, I get disappointed at times.

Over the years, have been learning to find recognition elsewhere.

I’ll just share with you where. Before that, let’s speak about every human’s need for…

…recognition.

We have it. Let’s not sweep it under the rug, or deny / ignore it.

Since it’s there, we need to deal with it.

When recognition comes from a worldly source, it is fickle at best. It inflates us, and makes us look for next-level stuff. And…

… it is fleeting.

A tool for manipulation.

Addictive.

Not leading to lasting happiness.

Not aligning with my core values committed to pursuits of good health, happiness, long-term contentment, and efforts towards no regrets.

Therefore – avoidable.

Stopped looking for it in humans or human-related paraphernalia, physical or institutional.

My recognition has been coming in something more natural.

Numbers.

At times in health numbers.

At other times in financial numbers.

In universal numbers.

Don’t have numbers to measure happiness and contentment. Can feel or not feel them though, and that’s a good enough marker. Regrets can be numbered, and eliminated down to zero. That’s wonderful.

Since I’ve chosen numbers to be my source of recognition, my entire focus in the endeavour to feel recognized focuses on health, financial and universal numbers.

Numbers speak to me. If they are recognizing my efforts, they don’t hide it, and I can read their message fast. When they don’t like my efforts, they are outspoken, and I get their drift, hopefully even faster. Even a preliminary health number out of whack? Springing into action to get it back on track, for example.

Downside?

Constant measuring and monitoring causes stress.

Yes, numbers can be stressful, since they trigger stress hormones, especially when they are out of whack.

Remedy?

Quality sleep.

Recovery.

Healthy intake.

Creation of good causes.

Befriending…

…numbers.

Finding a way to not get stressed at unusual numbers.

Like now. When financial worlds are crumbling, what keeps one numerically motivated? It’s the pursuit of a low buying average multiplying upon recovery. Since one has planned and kept oneself liquid for exactly this scenario, crumbling financial worlds are feeling comfortable, because the plan is being implemented. No other reason.

Or like recently. My HbA1C was out of whack. Hadn’t been monitoring for a while. No one’s looking – ok let’s binge…

The upside of constant monitoring is that one sees the effects of a binge immediately, and that alone causes one not to want to binge – the fear of seeing the effects of one’s stepping out of line.

Bottomline – monitoring has upsides, and downsides. The biggest upside is the wooden cane of the teacher, waiting to hit you, should you step out of line. The biggest downside is stressful obsession.

In the middle, there’s a path that brings happiness, contentment – and – recognition, even when one has chosen for oneself that these entities come from…

… numbers.

Magic

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Sure, …

… nobody said this was a bottom already.

No signs of a bottom.

For all you know, the real correction just started.

So, everyone is asking, …

… why in the world a buyer is buying …

… now.

Confused? No need to be.

First up, please understand, that money enters the market in a planned fashion when position sizing rules are in place.

Oh, there’s one more safety rule.

In a day, only so much goes in, in total.

Let’s say what you are referring to as a bottom comes within, hmm, two days, one day, four hours, one hour… ,

… whenever it comes.

Do you actually believe and / or have the guts to get fully invested in that minuscule time-frame?

Let me answer that for you. NO.

Why am I so clear on this?

Moving big money in one shot when the whole world’s pajamas are falling, and watching it possibly become half in a few days will most likely lead to neurosis and / or psychosis.

It is mentally digestible to keep buying at levels as per the entry quantum allowed by one’s position-sizing algorithm.

Though the overall market or index or sector benchmark might not be signalling a bottom, individual stocks hover around correction levels, threatening to recover from there.

We let them hover.

If they are not declining further from a correction level after a bit, we pick up one lot.

What’s the lot?

It’s a function of one’s networth at that point.

What function?

You decide. Yes. Your decide your own position size at each point thus, as per a mathematical calculation. You can decide to programme this function, for example, in a manner that you go in more when you are winning and go in less when you are losing. Or vice-versa. As per your personality and risk-profile. You call the shots. You are the master of your money and journey.

As time goes by, and as the correction deepens, you have lots of lots in. Ideally, you get fully invested before recovery. Compared with trying to move in fully at the exact bottom, well you might get lucky with the latter option, but it will burn your nerves, and resulting psychosis can last longer than when rational decisions will need to be taken. Not worth it. Position-size, entry quantum, going in bit by bit – this is what our nervous system can handle well without getting damaged. Markets change within months, perhaps weeks, and…

… when the magic happens, you deploy your exit strategy, whatever that is. Be rationally around to do so.

Or, simply, don’t do anything except watching the magic, …

… of a low buying average develop into a multiple.

Poise

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Hey.

Story’s changed already.

IT has suddenly become a defensive buy, it seems.

Not perceived as oil dependent.

See how fast that happened.

Five weeks ago one was hearing the RIP bugles for IT, or so the spin-doctors were trying to spin it.

Bottom-line : don’t believe the stories being spun. Have your own…

… high conviction.

And, the opportunity is…

…now.

Make up your mind.

Invest where you see stability and growth. Invest in India.

There are a lot of high conviction ideas in India that can be latched on to.

Fear makes good investments fall too. That is happening now. To take advantage of this effect, one needs to be fearless with high conviction.

How does one build high conviction in a stock?

Repeated shareholder-friendliness shown by a management.

Clean balance-sheet.

Abundance of free cashflow.

Debt-free-ness.

Longevity.

Vision.

Margin of safety.

That’s it.

Oh, one more thing.

Don’t force the market.

Let it make you enter.

Be poised with a funded GTT order in place before market open.

Keep doing this throughout the fall, as margin of safety deepens. One can do this if one has created enough liquidity during good times, and if one keeps entering with small entry quanta proportional to one’s networth.

Idea is to enter with and into high conviction multiple times, each time lowering the buying average.

With that, one sets oneself up for a fast multiple when markets recover.

It’s boiling down to…

…poise.

Mindset

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How long is this lasting?

Everyone’s asking.

I have another question, …

…since no one knows the answer to that above question.

My question is, …

… as far as your market strategy is concerned, …

… why are you even asking?

Just implement your strategy na.

Asking means you don’t know what to do.

Which brings us to some more observations.

‘Don’t know what to do’ state of affairs is digestible, …

… if this is your first time.

First time as in first time facing such conditions.

Conditions?

Panic. Confusion. Sell and ask later mindset. Gullibility. Mass hypnosis. Massive spin-doctoring. Etc.

If you’ve seen such stuff before and haven’t devised a plan for next time round, you are not excused, but please do so now.

If you’ve been through all this more than twice, and still don’t have a plan for situations like this one now, well, maybe you should rethink your market foray. Are you in the right space? Are you doing it out of compulsion? Keeping up with some Joneses? Whatever applies. Rethink. Shape in, put a strategy in place for market crashes, or, shape out, meaning, do something else where your expertise is challenged, and emerges forth naturally.

It boils down to rewiring.

What boils down to rewiring?

One’s behaviour during a crash.

Not panicking? Coolly implementing set strategy? Liquid enough, exactly for such situations? Not looking over your shoulder to see what strategy someone else is implementing? Not asking others for opinions? Implementing your own, mapped course of action without regret?

Great. That’s a fantastic mindset to have earned.

Such a mindset is going to take you places when mass psychologies reverse.

Wait and watch.

Soil-Conditions

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Hey.

The king wears…

…no clothes, …

…and doesn’t have an idea…

…as to what the adversary is wearing.

The latter, however, is aware of the former’s wardrobe malfunction.

Maniac versus potential fanatics, which is capable of a rational reaction?

Neither?

Probably.

It might seem though, perhaps correctly, that the former is exhibiting fanaticism.

Everything is a lie.

Over-reaction : huge.

Underlying cause : none visible, yet. Actually, adversary will now scramble to create underlying cause, even if it didn’t exist. Its leader is eliminated. One can’t expect reasonable reactions from a nation now one in anger. Anger as in, how dare you? Our guy might have been a demon, but who the hell are you to eliminate him and incite us to take over our own land. We might or might not want that, but WHO THE HELL ARE YOU? WHO ASKED YOU?

Status : the hornet’s nest has been disturbed. Deed is done. This blunder might well undo the king, unless he has planned to print his way through, which then will accelerate undoing his economy, which in turn will also undo the king. All arrows are promoting towards king – exiting stage – soon.

In this turmoil, world pays tax. Oil shock is upon us.

If one was in the adversary’s boots, one would have also sealed off Hormuz. What’s the surprise? Meaning, if one is surprised, where were your think tanks? Are they low IQ? Stupid? Non-existent? Probably a mix of all three, if that is possible. I’ll tell you why there is surprise. One grossly underestimated the adversary, who was in a state of preparedness to be able to seal off Hormuz in less than ten hours. That’s why there is surprise. Wars are won and lost because of the element of surprise.

Meanwhile, oil shock means mostly all components of the stock markets go down. Fall gains momentum. As value buyers, we are on high alert.

One is not rejoicing about what’s happening. War is terrible. Brings destruction to all involved. Acknowledged.

What’s happening is a stone cold implementation of entry strategy.

Staggered.

With small quanta. [Each quantum a function of one’s networth at that moment. Algorithm of that function to be decided by oneself.]

Wherever and whenever value is seen.

For as long as it’s seen, …

…or till liquidity gets exhausted.

When one enters at deep value, one has already made money.

It’s just that the world will stamp its approval during times of euphoria, which is when the money will show, as in the sapling having grown into a plant, or a tree.

That’s fine with us.

We absolutely ok with just keeping on planting sapling after sapling in the right soil conditions.

Hot-Iron Action

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Cockiness, …

…over-confidence in oneself, …

…under-estimation of adversaries, …

… rule the world as if king forever, no matter what, …

… irrespective of domestic and international horrors committed, …

… when an entity exhibits such characteristics, …

… implosion is not far away.

Right. Entity implodes.

Now what?

You’ll get value. Buy it.

Use a small entry quantum.

Buy repeatedly. As value deepens.

Buy as much as you can, so that your buying average gets lower and lower. Needless to say you are buying high-conviction underlyings. Ideally, you are then fully invested during the ensuing mayhem and before some kind of normalcy resumes.

However, when there’s blood on the streets, it’s very difficult to buy. Fear rules. Everyone you know is advising you different things. Your own pants are threatening to slip. One of the best independent indicators to green-signal buying is when every square inch of your body and mind squirms at the thought of buying. Can you teach yourself top buy during such times?

It doesn’t come automatically. We are not born with it. We have to rewire. We need to see such times, more than once, watch others do it right, and learn. Going against the crowd needs courage and self-belief. Comes with time.

How does one identify contrarian times?

At such times, close people will have a world full of advice to offer. It doesn’t matter if one has been doing something for multiple decades, they ‘know’ it better and will ‘teach’ one how to do it properly. If one can recognize such moments, one knows that contrarian times prevail. Why such behaviour? People around us become enthused. Perhaps owing to ‘developments’, the ‘this time it’s different snare’, or owing to some mania that has caught their fancy, or something or the other that has deranged rational thinking. You need to recognize those times when such derangements prevail.

Like now.

And this will continue. Am sensing a huge derangement. Noticing large irrationalities in thinking. Lots of advice flowing in. Noted. This is the time. Identified. Big chunk done.

Fine.

Now, we act.

No second-guessing once identification is done.

We remain active till there’s time to act.

What if…

…after the mid-term election in the US there’s no opportunity to invest in value for a while? Longish while?

Might as well do so when value is available.

Right. Let’s go.

Staples

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At the start of the Russia-Ukraine conflict, …

…and well into it,…

…as per media reports, …

…the matter should have been over / resolved / won…

…way, way, …

…way back.

Guess which media’s reports were reaching us.

Were they reporting correctly? Or brainwashing?

You tell me.

Is that particular conflict over?

You tell me.

Who is emerging from the conflict?

You tell me.

Which media’s reports are reaching us wrt current war outbreak?

You tell me. If you don’t, let me tell you. Same spin-doctors as always.

Only, this time around, one has gotten more selective in what one believes.

Ya, ya, this current conflict is all but won, it’s only a matter of days, sure, adversary will be on the table for talks etc. etc. Meanwhile…

…we mentally prepare for another…

…Vietnam.

Afghanistan.

Iraq.

Russia-Ukraine.

Prepare as in length, devastation, impact, whole shebang.

Only one thing is true.

NO ONE KNOWS.

Amongst other things, the word ‘narrative’ has become a by-word for…

…lies…

…so it might be a better ploy to…

…not believe.

Also meanwhile, we keep doing our staples.

What are these?

Our outlined course of action, should such a situation arise as the one that has.

What’s our mental programming?

That this can go anywhere.

How long do we keep going?

Till it lasts, or till we exhaust our ammunition, if this lasts beyond.

Ammunition? Are we fighting?

Not a war. Just usual markets. In the markets, liquidity is ammunition. One wishes to be fully invested, thus this strategy has been devised for exactly such scenarios.

Simple as that?

Ya, simple as staples.

Yawn

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Mass hypnosis…

…sweeps psychology…

…into a space where common sense…

…goes out of the window.

Such is the power of a pseudo ideology vis-à-vis a public that is now constantly in fight or flight mode.

Since CoViD.

Vaccinations.

Constant pursuit of growth at any cost.

Next story.

Next story.

Next story.

Let’s spin them a yarn.

Not any yarn.

A yarn that looks very realistic. Cut to ten years ahead, and the yarn probably alters current reality to a yet uncertain level. However…

…it’s not true NOW, in the shape it’s being spun and sold.

Masses are lapping it up. No need for implementation proof, no need for some years of field testing, perhaps at least five, antibiotics take ten in the actual world, no need for anything, no discounting for blunders, just spin it and we’ll lap it up. Ok.

Please do so. We, on the other hand, shall take huge advantage of your mass gullibility, masses. That’s why we remain liquid, for exactly these mass hypnoses.

Yes, we are buyers for Indian IT.

We’ll be buying till the bottom and slightly beyond.

We are fearless. Over more than two decades, we have created conditions for ourselves, mentally, in our environments, financially, which have thrown fear out of the equation.

Our strategy is one that benefits from ridiculous crowd behaviour. Again and again, we’ve gone against crowds, and emerged with multiples, financially free to take our principals out and deploy these into the next mania, panic, or whatever have you.

And so shall it be this time.

We are liquid enough to keep buying Indian IT, with small entry quanta, right to the mid single digit PE levels. Yes, we have that conviction.

Why?

First up, track record. 40 years of successful navigation through disruption. This disruption is different you say? Replace billable hours with a 1000 times more outcomes coupled with handholding, and revenue streams make billable hours look like dust particles. This one para just breaks the back of the story being sold. Do I think it’s possible? Yes. ‘Necessity is the mother of invention’, and the companies we buy have track records to prove that they are capable of emerging in the avatar that is required.

Then, poise. Zero or quasi zero long term debt. Massive free cash-flow per annum on the balance sheets, i.e., the conditions and means to R&D one’s way through. And, why is the public discounting the last five years that have been laden with exactly such R&D? Why is the public further discounting the level-headed input of Indian IT into AI? Owned billions put in with equilibrium. Indian approach. Borrowed trillions thrown in without looking left and right. Western approach. BIG DIFFERENCE.

Then there’s Buffettology. Tried and tested. Down the ages. Value. Deep discounts. Quality. BUY. HOLD. Beats most growth pursuits without having to look. Time and effort requiring growth pursuits are another story, and those pursuing them also become slaves, as in they don’t own their time. WE DO. WE OWN OUR TIME. HUGE WIN.

We are independent, and this current panic shall enhance our level of independence financially in the medium term, which is when we will pull out our current principals going in now, leaving part of our multiples in the market for further compounding.

Pulled out principals will then be deployed into the next panic.

One can already feel it brewing.

No Pharma required anymore. AI and implants will cure everything.

No Auto sector required anymore, it’s merged with the AI sector, or, better still, Auto is now AI. Forget Auto. Invest in AI. You automatically get Auto. Aviation. Tourism. Banking. Everything.

Etc.

New bottles. One after another.

Same old wine.

This time is always different. Ok, keep it rolling.

We’ll just keep doing our common sense thing each time, which is deploying, making a multiple, and then pulling our principal out.

And repeat.

You miss I hit

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Tried and tested…

…strategies…

…yield results over the long run.

Scamming might work for a while, but that’s about it.

There’s buy low sell high.

Compounding.

Pulling principal off and redeploying.

This is all constant stuff.

However, there’s a new game in town.

It’s called ‘throwing one and all off their tried and tested go to strategies in the hope they will abandon what they’re holding, and then these holdings will be swooped up by Team Malicious’.

Please don’t get roped in.

Don’t react to false panic, FOMO, ‘you’ve got to get a piece of this action’ kinda stuff. Please don’t allow anyone to fool you off your bread and butter game. Also, don’t try any fancy new game which is unfamiliar.

Earlier, one would have said India was scam central, but having seen the stories emerging currently, it’s easy to present the crown to Chief Protagonist + Team Malicious cohorts. These people make Nigerians and Indians look like jokers. One needs to learn how to lobby from these fellows, or perhaps not, since they talk ugly.

Ugly is not our thing. We’re everything they’re not.

We love harmony.

Peace.

Unison.

Flow.

Patterns.

Discernment of errors.

And then we act.

We make money off these.

And a huge error is in the making.

What is it?

‘Treating all people like fools, all the time’.

That’s the biggest mistake, made by the biggest fools.

And we’ll profit off these fools, which, hopefully, …

… should be a good lesson for them.

Reflex

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Uncertainty…

…gives rise to…

…options.

Well, if one is liquid.

If not, one doesn’t have the luxury.

If yes, one has the option to act…

…upon the opportunity being offered.

Or, one can choose not to act. To wait. For an even better opportunity.

These are wonderful options.

How did they come into play?

Because of uncertainty.

This trait makes people nervous.

When the masses are nervous, they sell.

This creates selling pressure, …

…leading to falling prices.

These, after considerable falls, create opportune entries.

That’s where we come in, because we are…

…liquid.

Liquidity doesn’t come for free.

One needs to learn how to create it, and one keeps learning this till liquidity-creation has become a reflex. Our financial behaviour, from this point onwards, out of sheer reflex, just sheer generates…

…liquidity, …

…units, …

…soldiers that fight another day, another battle, to, in the future, bring back home their…

…winnings.

Preparedness

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Wealth transfers…

…don’t happen in the exact same way…

…each time.

There’s expectation…

…and there’s reality.

Crowd’s expecting a certain behaviour, or pattern, or event etc., but, in reality, the path that wealth finds, towards its transfer, is kind of unique for the moment that it’s taking place.

Like this time.

Everyone’s expecting a crash.

Or a series of crashes.

Media is full of screamers.

All lobbies are vying for all other lobbies to sink.

Meanwhile, quitely, wealth transfers itself.

It holds on the fear of an investor, and jumps on to the greed of another, or should one say courage?

Yes, courage, actually, because the investor entering is disregarding noise and fear. He or she has imbibed the courage to do so. It hasn’t come for free.

This time round, the screaming is going to continue, it seems, for a few years, till full wealth transfer is complete.

Yeah, what if there is no single crash moment, but a long-drawn-out, slow, irritating wealth transfer?

Are you prepared for that?

Courage

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Tariff knife is…

…blunting.

500 will need to come on to have any strategic value.

500 is many things.

Call it a joke. Dream. Litany. Madness. Moronic. Ridiculous to the power of n. Whatever.

It’s still getting headlines.

500 will kill.

Since it’s do or die, all sides are coming out in the open.

Yeah, there’s real activity.

There was a 105 minute state visit yesterday. We know who flew in, and where to, with what mandate, etc.

Before that, the German chancellor, accompanied by a powerful team, came to India too.

French and German teams went to Russia.

BRICS counter is very busy, the busiest it has ever been.

New deals. Alliances. Promises. Protection.

Currency?

Yes. Coming.

This one will bypass being bullied.

New world order.

Process is in spurts and then there’s brief time for whatever equilibrium that can be achieved under the circumstances.

And that, exactly, is our style of transferring out…

…of cash…

…and into…

…assets.

Spurt, balance, spurt, balance and in the middle, somewhere, at any resulting low, we go in.

What assets?

The ones we are comfortable with.

Can the blunt knife still hurt?

Yes, 500 will kill. Businesses, relations, trade…

So what then?

The idea is to make 500 work for oneself.

How?

In the wake of 500, there will be many lows, in many assets. Those are entry points. You need to have the courage to buy.

What if there’s a lower point later?

You buy more there, later. This chronology might continue for a while.

How long?

Till the wealth transfer is complete from the old world order to the new world order.

So how long?

Don’t know. 15 months. 5 years. Anybody’s guess. I’m banking on about 3 years or so.

If your liquidity lasts 15 months, how will you manage to buy for 3 continuous years?

As I said, everything is happening in spurts. There will be pockets where my exit rule will trigger for various entries.

Oh, so your entries will generate liquidity along the way, rule-based.

Yup.

Additionally generated liquidity will lead to more buying, along the way.

True, after taking care of my personal liquidity needs.

Hmmm, that’s something.

Yeah. Keep going. Don’t be afraid. Don’t let the screamers knock you off your game. This one will be won if we don’t blink. Stare the bully in the face. Wear the bully down. At the bully’s core, there is huge fear. That’s the difference between the bully and us. At our core, there is …

…conviction…

…which results in…

…courage.

How to?

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How does one…

…position oneself…

…for what’s coming?

What’s coming?

Yeah.

Meaning the turbulence ahead?

What else. First up, we’re taking turbulence to be the norm, from this point onwards.

All right. Turbulence = norm. Baseline set.

Then, how do we maximally exploit our understanding, …

…simultaneously creating income…

…but then also allowing wealth to accumulate and compound?

Yeah, how do we?

You tell me.

We need to start with an asset class.

Right.

Which asset class?

Again, you tell me.

What we’re comfortable with.

Yes. Beautiful. And then we weaponize the asset class chosen, the one we’re comfortable with.

Weaponize?

Yeah. Otherwise it will be no good for these times. We need to make it time-befitting.

Example?

Let’s say you choose gold, ok? What good are your efforts in gold if after a point governments nationalize it and then confiscate it, paying you a reasonable price at that moment, and then, from that point onwards, in the hands of enough governments, gold turns a 100-bagger, for them, not for you?

Yeah, what good are my efforts in gold then?

No good. You need to trade gold, use some profits as income, and another portion of profits you invest in other asset classes, bought cheap, which the government has issues regulating harshly.

Like? Crypto?

Some think so. That’s their weapon of choice. Personally, I have problems with storing my entire networth on a pen-drive. That alone takes crypto off the table for me.

So where do you go?

Stocks. They come naturally to me.

Stocks can be harshly regulated.

In isolation, if we’re looking at stocks-stocks, yes, I’ll give you that. In a solid framework encapsulated within an income-generation cum wealth-creation mechanism operating with fundamental, evergreen principles like margin of safety, letting profits run, position-sizing and what have you, even stocks can be made to behave like the anti-fragile system they are a part of.

Would that not be valid for any asset classes, then?

Yes, provided the government can’t seize that asset class overnight from you.

Like cash?

True.

Gold?

True.

Silver?

Yeah.

Bonds?

Not sure. Risk of default though.

Real-estate?

Prices of real-estate follow demand and supply, and demand is reciprocally proportional to negative regulation. Governments can crash real-estate. So, yes.

Crypto?

I’m not so sure that crypto is beyond regulation. However, exchanges collapsing regularly are not my scene.

Stocks?

Have we heard of governments seizing stocks? As long as no illegal activity, all debts paid off, clear ownership and succession, I don’t think the government can do that. So stocks of companies, for me, remain in the fray. On top of that, we encapsulate them into a system. The system has an edge. It’s multi-faceted. It generates income, approximately when required, in cash. Otherwise, it creates wealth through compounding. Throw in 20 -30 models like margin of safety, letting most profits run, position-sizing, fine-tuned Fibonacci, income dynamos, etc. etc., and what we’re looking at is a unique entity, which behaves differently when compared to fragile stocks, or even to robust stocks.

So what you’re trying to say is that it all depends how you handle each asset class is what makes that asset class either fragile, robust or anti-fragile.

Exactly.

Is that your word?

Which word?

Anti-fragile.

No. It belongs to Mr. Taleb. In whatever way a word or a concept can belong to a person…

Like governments can crash real-estate, they can also crash stocks. What do you say to that?

Oh, that’s an anti-fragile part of this system, which leaves the user liquid enough to benefit greatly from such crash, seen from a 15 month perspective. User of such system is positioned to take huge advantage of temporary and large price dips. Stocks have a very low ticket size as compared to real-estate, and can be readily swooped up in a crash in bulk, unlike real-estate, which is heavy and is a huge liquidity-enemy.

Where do you stand with your system, personally?

As a whole, I’m working towards making my system with stocks, income-generation and wealth-compounding as antifragile as I possibly can.

What’s the critical mass, above which the system can be considered safe for the new world order?

I’m not sure. It’s all experimental.

So how will you know?

If I make the transition to the new world order whilst preserving a large portion of my portfolio, I’ll know that I’ve succeeded.

Any other method apart from the make or break one suggested by you?

No. Everything else is theory. Surviving reasonably well and then thriving is the only practical method that counts for me.

Thanks.

🙂

Where to?

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Changing world order…

…dedollarization…

…shifting boundaries…

…new havens…

…new strategies?

Confused as to what to do?

Where to with your hard-earned funds?

Don’t panic.

I personally don’t adhere to growth at any price, …

…so if your fund manager has you chasing the Moon …

…in gold, silver, copper, crypto, or any other newly identified haven…

…for a second, stop…

…and reflect.

Remember that word…

…’value’?

Ya, that’s a word we like.

We’re pursuing value.

There’s value in growth.

One can see it in the chart, …

…or one can see it in numbers, what with GARP and all that.

GARP’s good, …

…value’s great, …

…and we add two more words.

Nil burden.

Optimal.

Quasi nil burden?

Will do.

That’s where our money is going.

Hopefully, you’ve gotten our drift, but we believe you have the wherewithal to decide for yourself.

We want three other dynamos to work for us.

Liquidity is created by minor capital gain pursuits.

There’s the steady dividend, which adds to liquidity.

Now comes the kicker.

We pledge some portfolio and create margin. A small income is then made on the margin.

So, to recap, there’s the main-game that’s long-term. That our wealth, created and compounding.

Three side-hustles then generate income on top. That’s it for us.

Yeah, over to you now. Where’s your money headed? In these turbulent times, I’m sure this question must be flashing through your mind.

Potent Pioneers

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Hey.

We define our own roadmap.

Own indicators.

Own rules of action.

Own changes to our rules.

Own interpretations of prevailing market rules.

You get the drift. We have our own way of looking at things.

First up, acting on someone’s opinion leaves us at their beck and call.

Then, there’s the thrill, the kick, of defining a path.

And, lastly, but most definitely not ‘least…ly…(?!?)’, since everything on the path is kind of different, we don’t get slaughtered with the masses.

Also, in our own unique way, we have first mover advantage.

We can do all this, because we’re (almost always) liquid.

Liquidity is ammunition. Just ask a soldier what ammunition is worth in battle.

Liquidity didn’t come to us just like that.

We learnt (from many a beating) how to accumulate it.

Now we’ve learnt, …

… and we’re liquid, …

… and we’ve developed our own unique system …

… with its own unique edge.

This makes us…

… potent…

… pioneers.

Noise Diaries

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When something is a given, ….

…one just sheer deals with it.

And that something just got so much louder.

For example, social media is screaming with that something, i.e. …

… noise.

However, noise…

… has value.

One needs to know what’s being floated among the masses.

Furthermore, it’s helpful to gauge the decibel level.

If we look at the current scenario, everyone and their Aunty are yelling “Craaassshhhhhh…!” Dollar, bonds, gold silver, stocks, real-estate…

…everything’s supposed to “Craaassshhhhhhh!”

Fine.

Keep shouting.

At least we get an idea about the script and the concerned noise-level.

Is it supposed to scare us?

Yes.

Are we scared?

NO.

Why not?

Because we’re busy doing exactly what they don’t want us to.

Firstly, who’s ‘they’?

The floaters of the script. You were asking, ya, secondly?

Secondly, what do ‘they’ now NOT want us to do?

Buy cheap, like they are. They want us to let go and sell to them.

Wow.

Ya, it’s the biggest wealth-transfer in the History of mankind, currently unfolding.

Are you then not afraid of a crash, if you are buying now?

No.

Why not?

I’m liquid. If there’s a crash I’ll continue buying, into the crash. My entry quantum is aptly small and a function of my networth, thus allowing me entries for three to five years, upon any signs of reasonable value. Held over the years and bought with a clear head, in a growth market, assets will yield stellar returns.

So you’re saying you’ll cover the crash?

Yes. Timelines move very fast nowadays. Markets, when at all efficient, have become super-efficient, as if trying to prove a point to the level of overkill. When not efficient, they bubble or crash. Super-speed in times of efficiency is a huge bonus for us.

How?

Crashes play out within a shortish time-span. Buying through the crash is over fast. It’s not that when there’s a fire the crash is going to happen after five years. It will happen way sooner than later.

So is that enough time to get your money in, especially with a small entry quantum?

No. That’s why it’s important for small entry quantum cum long-term players like us, crash in, crash out, to keep buying amidst any signs of cheapness caused by fear-mongers creating all this…

…noise!

Exactly! 🙂

Strategy

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Reserve currency’s buying power is…

…waning.

Many others, too, have pointed out, that…

…assets…

…quoted in the reserve currency…

…are getting expensive.

Across the board.

If something is happening across the board, is the entire board showing an anomaly, or is it the underlying entity, here the reserve currency, that is behaving differently?

Going for the latter. Gut. Common sense. Fundamentals. Printing. Geopolitical balance of scales.

Diagnosis stands. The only bubble in town is a reserve-currency-bubble.

Doesn’t stop here.

Central governments across the world blindly price, or, rather, mis-price their own currencies in response to movements in the reserve currency. Many governments artificially support levels of their own currencies which are not realistic. Net net, asset markets worldwide are rising. It seems that buying powers of fiat currencies in general is falling. Masses seem to be losing confidence in fiat currencies.

Where does this leave you, financially?

Are you very liquid?

Hmmm, liquidity is losing value. How about moving some of your liquidity into assets of your choice. Look for value, and act where you find it.

However, stay liquid to a comfortable extent, and let some value of that particular liquidity be lost. It’s ok. You’ll make it up and more, in the event of a correction, where you’ll be tanking up on assets of your choice.

There will always be a correction. Period. You need to be at least somewhat liquid, come a correction, and it will.

So, this is what needs to be done.

Identify extra, and movable liquidity.

Look for value.

See if you are comfortable with the asset class offering value.

If yes, move any extra liquidity into the asset offering value, bit by bit.

Thaw?

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What does this even mean, …

… in today’s financial context?

Great, there’s some kind of a thaw on the horizon.

It’s only happening because one leader refused to be bullied.

Now, others are at least voicing themselves.

Had no one stood up, bully would have continued to arm-twist the world.

Is this a healthy situation?

Specificallly, in the context of one new tantrum almost everyday, there seems to be something big brewing.

Markets, in their efforts to behave ‘efficiently’, factored in a possible ‘thaw’, and one is barely getting entries now, for lack of margin of safety.

Fine.

No action is also considered action. No action is supreme.

Since one can feel it in one’s bones that something big is brewing, …

… will choose to save entry capital for the times to come.

Whatever’s brewing, should it come to pass, …

… will create the conditions for more entries, …

… will create margin of safety.