The Inevitability of It All

Just one more quick note whilst I'm away from the office.

As you've noticed, November has delivered quite the bumpy ride for markets... The mid-term-election-hedging unwind that sent stocks to the moon on Wednesday, the re-hedging of the risk that the AI spending craze may be ending sooner than the spenders themselves anticipate on Thursday, call it a relative breather on Friday, a rip your face off rally yesterday on prospects for a peace agreement with Iran, and a noticeable selloff today on a hot CPI print.

So, yeah, I'm not kidding when I say we should expect a plenty-bumpy ride going forward.

For this morning, let's breathe a bit, then let’s zoom out and think about it all the way we, frankly, should always be thinking about it all:

The thing about investing in financial markets -- well, I should say, the thingS that lead to successful investing in financial markets -- are as follows:

1. Having a time horizon that allows short-term players to do their short-term thing to asset prices, without reacting.

2. Having the perspective that allows you to calmly allow/observe number one... I.e., being comfortable with the inevitability of it all.

3. Having a working thesis for each position you hold.

4. Diversifying your portfolio in a manner that compliments your longer-term global/macro thesis while maintaining positions that don't always agree with one another, even over longer stretches... I.e., suffice to say that having a bunch of positions that all capture the same theme doesn't offer a lick of diversification.

5. Being a passionate student of the longer-term structural societal trends that dictate go-forward regulatory, spending and policy decisions... I.e., those constraints and incentives I keep talking about.

6. Forever maintaining an open/humble mind... I.e., embracing the fact that, as hard as you may study/try, you simply can't know the future... Which of course keeps you humble, and therefore focused on anything/everything that ultimately matters.

It's times like these when I'm compelled to take you above the fray, or, at times, the frenzy, and into the bigger picture thinking that -- over time -- makes all the difference!

I'll be back at it this weekend... So there'll be a deeper macro dive/update hitting your inbox before Monday.

Have a great rest of your week!

Marty