Lots of Crashing

No doubt you have noticed.  There are trillions of dollars being wiped off the asset accounts of investors world wide.  It’s not just Apple that is being decimated, but stocks like Facebook too.  Meanwhile in crypto land, Bitcoin is on another leg down.

Who’d have thunk that trade wars and tariffs aren’t good for public markets?  Wish I was short.  It wasn’t an easy short but those that have been short are finally rolling in a bear market.

Crypto’s have broken too.  Big.

I have had more than one crypto bull tell me the “reversion to the mean” strategy of trading crypto.  We have gone from outright bullishness to HODL to I don’t know what today. But it looks like reversion to the mean isn’t a number between $6000 and $20,000.  It might be $100.  It’s really hard to know what the mean is.  My guess is all the crypto hedge funds that raised capital over the past couple of years won’t be covering their management fees.

If you are a dip buyer, you got your ass handed to you.

Even Seed stage valuations are starting to soften.  With the cryptocrash and the ICO market drying up, entrepreneurs are more amenable to more realistic valuations of companies.  Part of that is the cryptocrash, but part of it is also the Fed raising rates, the stock market erasing all of it’s gains and just the fear level rising as people rediscover risk.

Thanksgiving dinner might need a little Alka Seltzer to digest properly.

For those that want to blame Trump, he deserves what he gets regarding tariffs.  But, he doesn’t deserve the full blame. For those that want to blame a Democratic House, they deserve what they get for running and electing a cadre of representatives that truly believe in Socialism as a way forward.  Hint, that’s not good for capitalistic markets either.  For those that want to blame the Fed for not talking the market back up, it wasn’t good strategy for the last ten years and it’s not good strategy now.  Interest rates need to normalize to pull out the excesses that have built up unbeknownst to us.  We will see them in the rear view mirror as they deflate and we might be seeing that with crypto now.

The truth is, sometimes markets go up and sometimes they go down.  The only thing we know for sure is that all public information gets priced in immediately.  It’s just that some markets aren’t as liquid as others and so the ride down isn’t very smooth.

For what it’s worth if I gaze into my crystal ball, I don’t think we have hit bottom yet.  I am not selling since I invest for the long term.  I have the full faith and confidence that once the rough patch ends, you’ll see a face ripping rally.  But, you have to see the whites of the eyes in the panic stricken and we haven’t seen that yet.  But, it’s coming.