Random thoughts

First off, a few comments about recent market action. To no surprise the "revolution" aka "meme" stocks crashed and burned. While there's lots of finger pointing going on, the true culprit are the "revolutionists" themselves for being such naïve fools, not the brokerages, hedge funds or whatever. But I will say this, nobody is pointing any fingers at  Cameron Winklevoss or Elon Musk who were cheerleading this "revolution". God knows how many people jumped in because of them and now they get to hold the bag while Winklevoss and Musk still hold onto their billions 

While the "revolution" was happening there was an acute deleveraging by hedge funds late last week as there was great fear that all short positions would be targeted for squeezes. As such, the market had a sharp but short lived dip and is now hitting all time highs as I type this. Lots of people were bracing for "the big one"  as the VIX spiked to near 40 but once again Mr. Market said no dice. You could hear the collective groans from the permabears and all the rest who have been bracing for a big drop for so long. ST sentiment conditions are back to neutral after having shown some exuberance a couple weeks back. When you have such conditions while the market is grinding to new highs, the market either keeps going higher or any dips that do happen tend to be relatively modest i.e. less than 5%. 

Coming into this year there is a clear consensus call for reflation. That would be bearish for bonds, bullish for the market in general with commodities, deep cyclicals outperforming.  Now as I mentioned in a recent post, you need to be careful to not be contrarian just for contrarians sake and automatically take the opposite view of the consensus. However, with this consensus view the market is clearly going to be vulnerable to a repricing of expectations should reflation fail to take place. I feel much more confident in being bullish when the market is making new highs while the consensus view is one of pessimism or very cautious optimism. That's a low hanging fruit type situation. Right now I would say the fruit is high hanging - not out of reach, but more difficult and dangerous to pick, so be alert.

Switching gears now to talk about some personal stuff. It's been about 7 years since the Greenstar fiasco whereby I took a devastating loss.  I was naive and foolish for putting myself in a position to get badly hurt like that especially given all my years of experience. I was ashamed of myself.  It was one of the lowest points in my life. I would say that the only time I felt worse was when this girl I knew who I had a huge crush on in high school found a boyfriend just as I was getting the courage to make a move on her. I remember how my heart just sank to the floor when I first found out and the agonizing weeks that followed. To this day I still carry that scar. There's 2 main ways people deal with huge setbacks like this. One way is to be consumed by the misery whereby your loss of confidence and sense of self-worth becomes permanent. The other way is to learn from the setback and to fight back with everything you got . Doing so can not only make up for the set back but put you in an ever strong position than ever before. I've always been one to fight and bounce back from major setbacks, but there's no guarantee that if you have a big set back you will be able to recover from it. In some situations you simply can't no matter how hard you try. Luck can be a big factor. 

The loss I incurred from Greenstar led to a series of events which actually ended up making me better off than had I not experienced the loss.  In fact, I'm easily in the best spot I've ever been in. I remember the dark place I was in after the full effect of the Greenstar loss sunk in mentally. I wrote about it here http://bulls-bears-pigs.blogspot.com/2014/11/still-alive.html.  I felt like I was walking around with a big hole in my chest.  I had to essentially rejoin the workforce to get a "regular job", one that was well below my qualifications. It was a 45-60 minute drive each way to work too but I knew I had to start somewhere. From there I climbed my way up which also had its own ups and downs. I was really, really fortunate. I was lucky to have met the right people and be given great opportunities. Of course, I made the best of those opportunities and so I'll give myself some credit  but without this good fortune, things would not have turned out  as good as it did.  There's a good book I read a few years ago called Outliers which describes what made super successful people so successful. The basic conclusion is that their success was due to part skill, part hard work and part luck such as being born at the right place or the right time or to the right family which allowed them to get unique opportunities. Without having the opportunity one's potential can easily go to waste. Of course, you have to try your best to create opportunities but it's often the case that you can't and you get them by luck. 

I admit that I am one lucky SOB to be where I am right now. especially during this pandemic. I just need to make sure now that I don't become complacent or reckless. As such, I have a sticky note taped to my desk which says "DFIU" as a reminder. Can you guess what it stands for?