Fake news and real facts

By | October 8, 2018

Fake news and real facts

The past week we may have witnessed a major inflection point in financial markets. However, predict future is a darn hard task and we never imagined we have the high quality crystal ball to do that, so we won’t predict the future.

We can examine some facts and some “fake news” to make our own judgement if we have seen or within a few weeks of the eventual peak in this cycle.

“Fake News” a.k.a noises

There are always noises in the market that distract you and get into your decision making. If you can spend as little time as possible on these things, you are likely to be less affected psychologically when it comes to a major decision point. And another added benefit would be that you are less consumed by these distractions so a lot more energy can be spent on more productive activities (for example, running or some fundamental research)

What are the examples of fake news or noises?

  1. Congress’ hearing of supreme judge candidate
  2. Donald Trump’s 20-ish accuser claiming they have recordings or tapes of the President’s past conversations
  3. Elon Musk tweeted again!
  4. DJT tweeted again!
  5. California passed a law to force companies have at least 1 or 2 or 3 women on the board before 2019, 2020, 2021! (God will know how the woman who becomes the first female board member after this law passed feels)
  6. US and China exchanged tough talks and cancelling military visits
  7. Russian spies
  8. Vision Fund
  9. Someone (plug a famous fund manager’s name) think the market is overvalued, undervalued or fair-valued
  10. Ray Dalio believes something is right/wrong/neutral now
  11. S&P 500 (or DOW or any stocks) passed some important technical resistance/support/pattern
  12. Some stock has surged options trading or near term volume

Real Facts (Redundant Adjective?)

Some events, probably not covered extensively by the market, are real facts and need our attention

  1. Interests in “Short Vol” trade reached peak again, after the volatile movement earlier this year that resulted several derivative products went busted.
  2. Almost many people thinks that the market is still going to climb higher without any worries on the current headwinds
  3. Your taxi driver, your younger friends who still live with their parents, your barber and your neighbors talk a lot about stocks and they have their own ideas of getting reach
  4. # of people asking you how can they refinance their home to pull some proceeds and invest into Real Estate or stock market
  5. Near term and long term US treasury yield (when was last time 10-year treasury yield stood at 3.25%)? A lot of fund managers (who has less than 10 years of experience in the market) don’t have memory of dealing with 5% 10-year treasury yield
  6. Inflation
  7. Public companies’ actual earning growth
  8. What kind of instruments are crushed (bitcoin) and what kind of stocks are bid to the sky (Marijuana Stocks)
  9. Chinese economy is looking really shaky now (high leverage with much slower growth is never a great combination)
  10. US Core Commercial Real Estate are really expensive
  11. Manhattan’s new 30,000 units Luxury Condo supply over next 3 years (unprecedented)
  12. A lot more Home Owners’ sold their home way below asking price now

Do yourself a favor, don’t overly consume your energy and time on some rumors or gossips or stories that are not reliable or relevant. Life is too short. Focus on the real deal. You only have 24 hours a day.

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