Feels like I’m getting to the end of my Thursday finance series!
Things I’ve noticed in May 2022:
- Stablecoin instability
- Pain at the retail level
- Step-down price adjustments of stable businesses with mkt cap >$1 billion (disappearance of margin trade on reliable dividends, perhaps)
- Buyer of my sale was 95% debt financed with a payment of 3x the gross rent I was receiving
- Market down 19%, as I write
What I haven’t seen:
- Widespread pain
- Institutional capital destruction
- Anything, anywhere, that looks cheap
Given the money creation of this cycle, those are key words to watch:
- Capital Destruction
Until those arrive, I’m going to be patient and live my life.
The Great Recession of 2008/2009 first got my attention with trouble in the interbank lending market (Early Summer 2008), this was after ~20% market decline.
There was a long way for the bear market to go, and its effect on real asset prices had years to run.
Great deals were available 2010-2012 => the equivalent of 2-4 years from “now”
Same thing in the UK Recession of 1990, my first out of school.
- If we’re in a blip then rebalancing will be just fine
- If we’re in for something more serious then it takes time to develop AND it takes years for price expectations to adjust
Live a life where you don’t need to be right.
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