I’m Not Predicting, I’m Observing

George Soros has a great line, one that I’ve stolen many times: “I’m not predicting. I’m observing.” We really don’t have a crystal ball, and it really is a dumb idea to pretend that we do. But what’s not dumb is to keep your eyes and ears open, observing both what the world is telling you (playing the cards) and what other market participants are telling you (playing the players), and reacting accordingly. That’s the heart of tactical investing.

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1914 is (still) the New Black

There are decades where nothing happens; and there are weeks where decades happen. – Vladimir Lenin (1870 – 1924)  In 1914, Europe had arrived at a point in which every country except Germany was afraid of the present, and Germany was afraid of the future.  – Sir Edward Grey (1862 – 1933)  Last week’s email, …

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1914 is the New Black

Man in Black: All right. Where is the poison? The battle of wits has begun. It ends when you decide and we both drink, and find out who is right … and who is dead. – “The Princess Bride” (1987)  Time is a game played beautifully by children. – Heraclitus of Ephesus (535 – 475 …

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7 Quick Points on Europe

#1) Here are the most relevant recent notes for an Epsilon Theory perspective on the underlying political and market risks in Europe: “The Red King” (July 14, 2014) and “Now There’s Something You Don’t See Every Day, Chauncey” (Dec. 16, 2014). #2) Markets reacted positively to last Thursday’s announcement because Draghi doubled the amount of QE that he …

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Now There’s Something You Don’t See Every Day, Chauncey

Narrator: Well, today we find our heroes flying along smoothly… Rocket J. Squirrel: Flying along smoothly? Bullwinkle J. Moose: You’re just looking at the picture sideways! Rocket J. Squirrel: Actually it’s like this! Narrator: Oh… OH GOOD HEAVENS! Today we find our heroes plunging straight down toward disaster at supersonic speed! Bullwinkle J. Moose: That’s …

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Hey Spike

The strong do what they can, while the weak suffer what they must. — Thucydides, “The History of the Peloponnesian War” (395 BC) Global growth is really bad! Hooray! That was the verdict of US markets yesterday, as the Fed minutes “revealed” (to use the breathless phrasing of mainstream financial media) a “growing concern” with …

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Finest Worksong

Take your instinct by the reinsYou’d better best to rearrangeWhat we want and what we needHas been confused, been confused– REM, “Finest Worksong” (1987) The politics of dancingThe politics of oooh feeling good– Re-flex, “The Politics of Dancing” (1983) The fault, dear Brutus, is not in our stars, but in ourselves. – William Shakespeare, “Julius …

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