#194: A MARKET COMPLEX

micksonmatch
December 05, 2024

It is hard to believe it has taken me 193 newsletters before I bothered adding a logo or watermark to my images, what a marketing rookie.

S2N Spotlight

In 2014 I started writing a book about the stock market from a crowd psychology point of view, which I called The Market Complex. I wrote the first chapter and posted it on a website I was blogging on for the sh1ts and giggles. I just read what I wrote 10 years ago and loved every word of it, but I guess that’s because I wrote it . I would appreciate those who are curious to read it and let me know what you think; I cannot believe that the website is still on the internet; I had completely forgotten about it.

I have so much more to say on this subject and wish I had the financial independence to spend the time writing this book. Perhaps it was my destiny to wait until the current market complex we are experiencing passes and make it the focus of my book. The black sheep below is me trying to find a way out of this crowd.

In 1912 Carl Jung wrote a fantastic book called Transformations and Symbols of the Libido. Jung referred to psychic energy as libido. With new highs happening in so many different markets at a frequency too high to mention, we are not only swimming in a sea of liquidity but an ocean of psychic energy.

If I have learned one thing about a complex, it is that it is unpredictable. What is also good to know is that energy in whatever form suffers from finity. This too shall pass. The genius about psychotherapy is that bringing awareness from the unconscious to the conscious is more than half the battle. Those of you who are able to see that the markets in their current form are not normal will do much better than those who think this is business as usual.

S2N Observations

I had this vision of creating a snail trail of the S&P 500 and Bitcoin’s risk-adjusted 1-year returns (monthly data used). The green dot is where we start, and the red dot is where we end. I need to train my brain to get more used to this analysis to see if it adds value. The top left quadrant is where you want your returns to be, as they are high with low volatility. The worst place to be is the bottom right. It is not surprising to see the S&P 500 better positioned than Bitcoin.

Someone just activated an 11-year-old wallet with 2,700 #Bitcoin worth $254 MILLION. They HODL’ed from $600 to $96,000, which is super impressive. 11 years ago they spent $1,620,000, which is a pretty sizeable amount of money. To use crypto language, those are “diamond hands.”

I was just wondering what the daily streak performance looked like for a few symbols I follow.