"The greatest of all success rules is this: do unto others as you would if you were the others."

The Golden Rule is more than a principle of ethical behavior; it is a dynamic force that can work good in the lives of untold numbers of people. When you make it a practice to treat others as though you were the others, you spread goodwill among people who, in turn, may be moved to do the same. By their actions, they influence still more people, who generate goodwill among even more people. This force for goodwill increases exponentially and will return to you from totally new sources. The benefit you receive from a good deed performed today by a total stranger may have been a chain reaction from long ago when you observed the Golden Rule in your own dealings with another.

Bitcoin - an inflection point.

Now, bulls are thinking did we buy the top, and bears are thinking if they should sell it here. Enjoy the ride!

Fishing.

 I often forget how important the empty days are, how important it may be sometimes not to expect to produce anything, even a few lines in a journal. A day when one has not pushed oneself to the limit seems a damaged, damaging day, a sinful day. Not so! The most valuable thing one can do for the psyche, from time to time, is to let it rest, let it be, wander, live in the everchanging moment of eternal Now.

Debt will continue to be sold until reaches a level that is considered sustainable. That is a long way from here. Enjoy the ride!

"Beware of him who tries to poison your mind against another under the pretense of helping you. The chances are a thousand to one he is trying to help himself."

 South African poet and painter Breyten Breytenback tells of a black man named Freedom who was the property of a one-legged slave owner in the days before the abolition of slavery. Whenever the owner bought a new pair of shoes, he gave the left one, which he couldn’t use, to Freedom. Eventually, wearing two left shoes deformed Freedom’s right foot, and he was permanently crippled by the “generosity” of his master. Don’t be fooled by people who attempt to further their own interests under the guise of helping you. Listen to advice from others, thank them for their interest, and make up your own mind about what is best. Follow their advice if it fits with your plan for your life, but don’t hesitate to discard it if it doesn’t. In all the world, there is only one individual who knows what is best for you, and that person is you.

The most important decision you make is to be in a good mood.

 

Tumbling stock markets show that investors are increasingly concerned about Fed rate hikes, the war, and rising energy prices.

Since 1970, each time the oil price increased by close to 100% from a year ago, the U.S. economy entered a recession. However, oil prices are now less of a burden compared to the past, as the U.S. is a net exporter of oil. Thus, rising prices do not necessarily point to a recession ahead.

Odds of a recession have certainly increased in recent weeks and any further escalation of the war between Russia and Ukraine would represent a significant drag on growth. For investors it makes sense to remain defensive. Not being fully invested in stocks, holding significant amounts of cash, keeping gold as the ultimate safe haven, and adding oil stocks as a geopolitical hedge should help to reduce portfolio volatility in uncertain times.

 

When this goes, the game is over!

Market environment dictates how much and how active we should be trading, not strategy signals. If you don’t know your market environment and what fits you and your strategy best….then you don’t have a true strategy.

"There are at least six different market types. You should understand how your system will perform in each of them."

a. Bull volatile

b. Bull quiet

c. Sideways volatile

d. Sideways quiet

e. Bear quiet (almost doesn’t exist)

f. Bear volatile 

ARKK -

In this environment every trade starts as a scalp, right or right out, if it works morphs into swing and then into position.

Yesterday the Nasdaq had the largest distribution day since this correction started. We have not seen volume consistent with capitulation and put volume did not pick up meaningfully, which is a sign of complacency.

Historian Dan Carlin recently wrote: For all its evil, war sometimes has a tiny silver lining. It can clarify the mind and reboot our ethical compass. It puts less serious things in perspective. It nudges us towards our neighbor and reminds us that our needs and interests are intertwined. It reignites our compassion.

"Inflation has a long tail. It tends to persist for at least a couple of years after it starts to spike. The 1970s were illustrative of this. This suggests that crippling double digit inflation will perniciously persist worldwide until at least 2024. The real rate of inflation in the U.S. is not 7.5% but somewhere above 20%"

Buying the invasion worked wonders in the past. Will it be different this time?

Volatile days for commodity investors will be ahead. The financial atomic bomb in form of a Russian exclusion from SWIFT could cause additional trouble. The odds are high that Russia would stop oil, gas and wheat exports into the EU as soon as the SWIFT exclusion would be ratified. As Russia is the single most important supplier for the EU - this could lead, once again, to lots of trouble for energy and grain prices.

"On Ukraine, Russia, NATO, and WW 3"

Putin follows a Stalinesque ideology given his upbringing. He views the fall of the USSR as the "greatest geopolitical catastrophe of the 20th century." Putin wants Russia to be the global dominant force with the annexation that only begins with Ukraine.

Ukraine has been a legitimate country since 1991 when the USSR fell as recognized in the Lisbon Protocol along with the 1991 law "On Legal Succession of Ukraine". Russia has no entitlement over Ukraine. If history is any guide, Chamberlain's appeasement towards Hitler allowed him to annex the Sudetenland led to WW 2. Such authoritarian aggressors cannot be appeased.

At present, the US, EU, and UK are appeasing Putin by limiting the sanctions. With record debt, soaring inflation, and hampered GDPs, the concerns of major allies about the cost of energy and fuel remain high leaving many sanctions against Russia off the table. Such nations continue to buy from Russia as to them, the price of blood of innocents is less important than euros or points at the polls. At the very least, barring Russia from SWIFT would be a good move yet has yet to happen.

No NATO country can risk a casualty caused by Russia as this would trigger NATO's Article 5 in which all NATO allies jointly enter into a war which could lead to WW 3. So Ukraine stands on its own with Putin already having calculated ways to work around sanctions; he now favors bitcoin. Russia’s own advance preparation, in particular its build up of more than $600 billion in international reserves, will also help it weather the sanctions. Putin warned: “The United States will not be left out, with its ordinary citizens feeling the consequences of the price increase in full.” Putin has said that while the US may have more global power, Russia has nuclear weapons.

Even if Russia ends its attempts to annex Ukraine, they are likely to leave a Vichy government and a permanent military presence in the country to use that as leverage against NATO. If the sanctions imposed on Russia are ineffective, then no tool outside war will compel them to slow down their aggression given Putin's mindset. Georgia and other countries are at risk.

The only fundamental factor that really matters in the stocks market is "The Law of Supply and Demand".

 RTY - 100 w-ma@1942

"War, Power, Diversion and Inflation"

"Never change things by fighting the existing reality.........to change something build a new model that makes the existing model obsolete."

Food for thought.

"~2/3 of stocks underperform the index, ~50% have no ROR, ~25% go to zero. It’s these big outliers that really make [all] the performance. The power law of investing, 5-10% of stocks generate all the returns."