EliteZags said:

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yea so is the premise earning interest/dividends on cash positions with some added potential for price appreciation

not cash needed for upcoming downpayments or anything, just sidelined reserves for dip buying, which is it somewhat resistant from broad market pullbacks

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For me, it was being able to see the market stretching to levels of extreme sentiment, while at the same time watching the dollar rise in a pattern that is expected to terminate below the last high from 2022, while watching interest follow a similar path to the dollar. I was willing to buy TLT's in the lower $90's expecting a move to $105 and possibly even higher toward $110-$120 over the next year. My base expectation was for a period of considerable volatility in equities on the horizon during a period where TLT would be rising and rates and the dollar would be falling. The interest/dividend played no part, merely the moderate price increase (which would actually be a solid return now that it's in the low $80's) for a portion of my money that usually just sits idle in my account.

If my expectation turns to reality, please know that the next phase would be a bottoming of the dollar and interest rates, and top in TLT, that would reverse and send rates and the dollar to new highs over the coming years and TLT to new lows, eventually leading to a potential bond market crash.



It all seems inevitable, and we've seen a variation of this before in the 1970's and 80's. We thought we were smarter and better, but it appears we are not. The current regime of fiscal dominance



is a feedback loop that is unavoidable barring a new uber hawk fed chair who raises short term rates to drastic levels, crushing the economy and market in the process, to attempt to end this spiraling cycle sooner. The ONLY solution the current leadership has is as predictable as it can be. They monetize the debt and play games month to month while the train goes on. Lyn lays it all out here. Full Steam Ahead: All Aboard Fiscal Dominance - Lyn Alden

The only thing that would have me pivot is if long term rates exploded higher sooner. And the loss I'll take on TLT by getting stopped out is negligible to me since it's money that wasn't in the market, which would be crashing much harder. I view it is the safest potential loss right now, until which time where cash is the only option.

If you look at SPX and the 10-year yield, I keep wondering if we're somewhere in the 1960's or 70's right now. Where bond yields initially rise strongly following a period of extreme easing. This time period was treacherous for stocks and the economy. Inflation went from picking up, to roaoring, to embedded, to needing extreme hawkish measures to get under control. Every new high in the market was followed by drastic volatile drops. From the 1973 top, it was a decade before the market was back above that top permanently. Try to imagine merely being a buy and hold investor, or a DCA investor, over those 10-15 years. Even with the fiscal dominance feeding assets, the majority of people invested had a completely neutral at best decade of wealth growth. Many were crushed. A portfolio exclusively invested in the S&P at the end of the year in 1979 was at that exact same place it was in 1969, 1973, and 1976.



Not saying this is what is going to happen. But it's the "most" similar time in observable financial history. If you aren't prepared for sweeping volatility that can switch from bull to bear back and forth multiple times over the next 1-2 decades, I think you are doing yourself a disservice. Because as I've mentioned many times, our economic starting point leading into this similar looking scenario is much much worse than the 1960's were seeing as we're beyond war time levels of debt/gdp and we haven't even started the emergency actions phase yet.

This is why I am very long metals, why I have Bitcoin exposure directly (Blackrock holding BTC is not you owning it), and why I'm willing to take profits on stocks when I feel sentiment has reached an extreme. You can win in volatile time periods while the majority are whipsawing back and forth. But it requires a change of philosophy from everything you have been trained to do since 2008, which is to merely buy and hold long term. And if the wrost case comes true, which would be cataclysmic 1929 style crash and depression, it will be MUCH longer than 1-2 decades before your money is anywhere close to where it is today.

Towns03 said:

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WWR

just $78 (of $11,500) away from break even.

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has OA commented on this?

I still own all my shares

BucketofBalls99 said:

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BTC only? Or would IBIT fall into that play as well?

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Sure, it mirros BTC minus the fees.