No trading skills, No trading success.
Discipline = Follow your rules
Confidence = Reduce your risk
Patience = Think very long term
Execution = Think in probabilities
Persistence = "There's always another opportunity"
Break your limits.
When the Fed spiked interest rates from ~0 to ~5% over the past year, it had 3 main effects:
1. Undercut value of bonds, especially long-dated bonds.
2. Made lending more expensive, particularly for large purchases like real estate that have to be financed.
3. Increased government borrowing costs.
These effects are just math and have to play out through the financial system. I think they will roughly correspond to the 3 stages of the financial crisis we’re in:
1. Small/regional bank crisis precipitated by unrealized losses on long-dated bonds.
2. CRE crisis precipitated by credit markets seizing up for new loans and impairment of existing CRE loan portfolios (which are also unrealized losses).
3. Government debt crisis precipitated by spike in debt service costs at federal level, budget deficits at state and local level, and sovereign debt issues at international level.
We’re seeing the first stage play out now. The second and third stages are yet to come.
Disclaimer: magnitudes are hard to calculate, and I make no predictions about the price of any asset. A lot depends on how government including the Fed reacts. I do not make trading recommendations.
There’s a real chance that the Biden administration drained the SPR for short-term political benefit and will leave office without ever refilling it.
At least the world is super peaceful right now and there’s no reason we might need our own oil reserves…
Build in private
Date in private
Love in private
Win in private
Hustle in private
Rebuild in private
Be happy in private
Remember to keep it private to make it permanent.
Things you need to master a tough mindset:
1. Communication
2. Time management
3. Consistency
4. Honesty
5. Networking
6. Self-confidence
7. Positive self talk