Melt Up or Down?
David Hunter vs. Harry Dent
First of all, thank you to everyone who has donated to help my friend Solomon out. I sincerely appreciate it. We’re almost at the goal. If you’d like to donate, feel free to do so via the instructions in this edition of the newsletter.
On to my thoughts for today…
A few months back, I wrote an edition of the newsletter in which I touched on David Hunter’s “melt-up” thesis. If you didn’t read it and listen to the episode of podcast that I included in it, I suggest doing so.
TL;DR - Instead of the market just bleeding out another 50-60%, asset prices skyrocket to new all-time highs before a once-in-a-100-years crash.
And if you’re thinking “Why does Frank listen to these lunatic analysts?” consider 1. Frank is a bit of a crazy person himself and 2. MSM outlets like CNN are starting to throw the melt-up idea out there, as well.
And so the melt up may still happen. (Not financial advice.) Let’s take a look at some major trends that are still intact.
The Invesco QQQ Trust - the ETF that tracks the Nasdaq 100 Index - is still above the 200 Week SMA, which is a sign we have yet to break a major uptrend.
Same for the SPY.
And BTC remains just below the 200 Week SMA.
If these major trends break, then maybe we just melt down. I really don’t know.
I have a gut feeling I’m missing some big pieces of the equation in my mental models. Plus, no one really knows what will happen if WWIII breaks out - or if we all melt to death.
Also, I haven’t lived or cared about markets long enough to really have a decent idea of how these cycles and phenomena work.
I don’t say that to put myself down, but rather to contextualize my thoughts. If you have any thoughts that you’d like to share about where we’re at in markets, please do so in the comments.
Also, my lack of knowledge and experience is part of the reason why I repeatedly stress that I’m not a financial advisor and that nothing in these newsletters is financial advice.
Anyway, if we are headed for a melt down, it may look something like what Harvard MBA holding and accomplished businessman Harvey Dent Harry Dent shares in the conversation below.
(I really hate the tiles for these videos.)
Seems like a smart guy that Harry Dent. (No TL;DR for you. Stop being lazy.)
As I shared in this edition of the newsletter - the aptly titled “I Don’t Know” - back in February, I’ve never had less of an idea where we go from here.
For this reason, I’ll share with you what I’ve recently shared with family and close friends, and that is: stay safe.
If you feel overexposed to the market, you probably are.
Given all of the uncertainty in markets and in the world, the only thought that I’m comfortable sharing about money right now is don’t try to be a hero.
Maybe we do melt up. And maybe you’ll miss it. Even if you do miss it, you can always buy when/if prices crash, as both Mr. Dent and Mr. Hunter claim they will.
Whatever happens, life will go on and you’ll probably be happier you played things on the safe(ish) side one way or another.
And maybe we don’t crash in the near future. Maybe we’ll just do a weird, prolonged stagflation-y thing. Even in that environment, best to play it safe…ish - whatever that means to you.
Just wanted to get these thoughts out there.
Some Commentary
In other news, just a few hours ago, I provided some commentary on behalf of Finder to this article in The Street.
In the article, I shared my thoughts on how I actually supported the SEC’s actions in bringing a mega crypto scammer to justice. Yes, I actually do support some of the SEC’s actions regarding crypto.
Nance
Seems innocent to me. Always good for a laugh that Nance.
Finder’s Crypto Newsletter
Finder puts out a cool, concise and free newsletter daily. I suggest subscribing.
(They don’t tell me to include that in my newsletter. I’m including it because I actually read it every morning, just like someone who maybe doesn’t work for the company.)
And that’s all. Thanks for reading. Big hug.
Best,
Frank
Twitter: @frankcorva
Currently Listening To: “Remembering My Dreams”, by Griff
