18 ms·

The structural, hard data has foretold the path of inflation over the past 3 years with a high level of accuracy. Ignore the noise/headlines and you'll have a p

The structural, hard data has foretold the path of inflation over the past 3 years with a high level of accuracy. Ignore the noise/headlines and you'll have a pretty clear view of the state of the economy. People who bet on sentiment and not the actual data have been wrong... though sentiment can drive real data to a certain extent, of course

danielmarkbruce 3y ago
I hope you made a truck load of money with said foretelling data.
- adam_arthur 3y ago
  Yes, predicting correctly does pay. Currently 80% long with cost basis mostly around last October/SVB lows in primarily REITs and financials/lenders. Market will likely rally over next few months (smaller caps), until the reality sets in on sticky inflation. If Fed sees through the short-term data and signals this, then market will pull back soon, otherwise will happen later in the year. Inflation falling back to 2% and staying there with 6% wage gains and rallying markets/commodities is a fantasy. A quite obvious one to predict, yes, if you study the history of monetary policy for more than a few minutes. There is always the possibility of a trapdoor recession though. By some measures household accumulated savings are close to depleting, student loans resuming... and consumer credit measures are looking weaker. We have a stimulus impulse thats fading competing against a structurally strong economy. Which one will win in the end? If the signs start pointing in that direction, then it will be time to pivot to a recession trade. You just have to be there first
  - lotsofpulp 3y ago
    > Yes, predicting correctly does pay. Predicting correctly and not telling others pays more.
    - adam_arthur 3y ago
      It only matters if people change what they do in response to the prediction, which very few if any will in this case

18 ms·

The structural, hard data has foretold the path of inflation over the past 3 years with a high level of accuracy. Ignore the noise/headlines and you'll have a p

by adam_arthur 3y ago

danielmarkbruce 3y ago
I hope you made a truck load of money with said foretelling data.
- adam_arthur 3y ago
  Yes, predicting correctly does pay. Currently 80% long with cost basis mostly around last October/SVB lows in primarily REITs and financials/lenders. Market will likely rally over next few months (smaller caps), until the reality sets in on sticky inflation. If Fed sees through the short-term data and signals this, then market will pull back soon, otherwise will happen later in the year. Inflation falling back to 2% and staying there with 6% wage gains and rallying markets/commodities is a fantasy. A quite obvious one to predict, yes, if you study the history of monetary policy for more than a few minutes. There is always the possibility of a trapdoor recession though. By some measures household accumulated savings are close to depleting, student loans resuming... and consumer credit measures are looking weaker. We have a stimulus impulse thats fading competing against a structurally strong economy. Which one will win in the end? If the signs start pointing in that direction, then it will be time to pivot to a recession trade. You just have to be there first
  - lotsofpulp 3y ago
    > Yes, predicting correctly does pay. Predicting correctly and not telling others pays more.
    - adam_arthur 3y ago
      It only matters if people change what they do in response to the prediction, which very few if any will in this case