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Issue #838: Fundamentals, who needs them?

Issue #838: Fundamentals, who needs them?

Oct 5, 2020
Marty's Ƀent

Issue #838: Fundamentals, who needs them?

Here's a great thread that was dropped over the weekend by our good friend James O'Beirne and has flown under the radar that I think you freaks should check out. In it, James clearly lays out the case that the act of investing, particularly in stocks and bonds, has become completely detached from reality. Fundamentals do not matter in this brave new world. Only the promise of a greater fool matters.

And guess what, freaks? The Fed, via its promise to backstop markets and failed companies at all costs, has all but guaranteed there will always be a greater fool in the markets looking to scoop up assets and ride the wave of capital flows that will undoubtedly artificially inflate the value of stocks and bonds. Actually, they have guaranteed this. Individuals are no longer deploying capital into these assets because they believe the US economy will grow over the duration of the bonds' maturation or that companies will provide goods and services in a way that make them profitable to a point that they will drive returns to investors via higher stock prices reflecting the health of the companies' finances or dividends. In this brave new world, asset allocation and expected returns are driven solely by unnatural market intervention.

The question that remains is; how long can this go on? How long can TikTok traders and Davey Day Trader disciples get their nut off before all of this hits a head? At what point does the Fed's policy begin to have less of an effect on the markets? How long can this go on? Your Uncle Marty has no idea. But the exploding debt in this country doesn't give him much hope that this will continue unabated without serious structural damage being wrought on the markets in the form of distortions caused by a massive misallocation of capital spurred on by unnatural incentives created by the Federal Reserve. For this reason, I feel very comfortable parking my capital an asset that cannot be manipulated in such a wanton fashion. Despite what the haters say, and there are many, I find comfort by parking my capital in Bitcoin.

Final thought...

One time, right after college, I locked myself out of my apartment and spent an hour trying to scale the facade of my building as my future wife sobbed on the side walk.


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