Almost Always Almost Never

One of the great things about my life, is that I get to read a lot. I read a lot of different sites, I devour news content like almost no one else. I am always trying to read as much as I can.

On Sunday night, it was a bad deal to be reading a lot. Everyone was calling for today to be Black Monday 2.0. Almost every expert, financial guru and really anyone even associated with stock markets knew – they just fucking knew that today would be an absolute write off. They knew it, they sang it from the tree tops, and they tried to pull everyone down the rabbit hole with them.

On Sunday night I put out my thoughts on what was going one, how we likely got here, and what would likely happen going forward. Futures markets were ugly, and the stock markets were headed for the abyss. But, I said we would likely see an intra day rally today – and boy did we ever get a fucking rally!!!! After nose diving 1600 points, the Dow Jones actually went positive 300 points for an intra day swing of almost 2000 points!!! Holy shit. I knew it was bound to happen – the margin calls from over the weekend were sold out at the open, and once markets started bouncing and trading at very technical levels, the computer driven algo’s took over and drove the market up to the resistance point. The Dow did finish the day down 300 points ( yawn ) which is a normal session. Since I am old enough to have lived through, and managed money through the tech wreck, the GFR in 2008, the meltdown in Canadian equities in 2015, and the Covid stock market – I should know. It always happens, but somehow people almost always forget.

But, the reason I wanted to put this post out is to serve as a reminder to people – Be careful who you listen to. I have always said, and I will until the day I die, that you should always get your news from all sides, all angles, and from people who completely disagree and who are at odds. If you only take your news from one side, you risk going into an echo chamber, and your business could suffer. When Canadian markets opened this morning, the Canada 5’s were down 5 bps on the yield. Boy were brokers happy. I am sure there were brokers telling clients that rate drops of the 5 year mortgage was coming – just hold off Mr. Client, because the lenders are going to be dropping rates. Well, if you took a long lunch, your attitude is sure changed now. Canada 5’s finished the day up a whopping 16 bps, for a 20 point move in one day. But, but, but every financial pundit said bad news is good news for bond yields, and since the world is apparently falling apart, bond yields should come down. Always get your news and inform yourself from multiple angles. There have been plenty of people out there like myself that have said time and time again, that just because it is supposed to happen, doesn’t mean it will this time – or at all. Sometime bad news is….just….well….bad news.

Whatever you want to call this strange new economy we live in, the fact remains that through almost any lense you look through, inflation will reign supreme. I don’t care what is going on in the economy, Uncle Tiff is going to have a hard time cutting rates into inflation heating up. Just because the television pundit thinks rates should go down when the economy shits the bed doesn’t mean that happens. Sometimes market react different ways to different things – hell, sometimes they react differently to the same thing. Be well read. Read different commentators that hold opposing view points. Be ready to change your opinion when facts change.

The Canadian bond has wiped out any drop from when the stock market started falling apart 2 weeks ago. That means, the economy is absolute dog shit now AND rates are higher. Not exactly a winning combo if you ask me. If you made your entire business plan on rates dropping because the economy was shitting the bed, you best pull out the legal sized pad of paper and an HB #2 pencil and re write your business plan going forward, but I am sure all the kids these days use fancy Ipads and the like. Things change on a dime, and just because you read something by someone who you really liked, doesn’t make it any more or less likely to come true. Sometimes you have to read up on opinions that you don’t like to ensure you have a contingency plan for your business. I used to call it the ” what if ” plan. I guess now we could call it the Donald Trump plan. Markets will explode or drop based on every word out of Donald’s mouth. So, is your business able to change and grow based on the Donald?

It is getting to the point where your business needs a battle plan. What do you do if rates go up, what do you do if rates go down. What is the plan if rates turn sideways and inflation spikes? What is your marketing plan looking like if house sales drop? What is your business plan if unemployment spikes higher? Having a plan will allow you to react in a calm, professional manner so that you aren’t some jackass on social media claiming Black Monday 2.0 is coming.

In times like we are living through, it is going to be super important to remember that almost all of the people are wrong almost all of the time, and almost never is it a good thing. No matter how educated these people may seem, anyone who claims to know for 100% what will happen tomorrow are guaranteed to be wrong. Almost always!!! Be careful who you listen to, but always listen to as many opinions as possible.

While futures are up nicely as of the 6:00 pm open, I can say with a lot of confidence that this is probably a little calm in the storm, and the volatility is likely far from over. Moves in yields, stocks, commodities and currencies will be violent, it will be frequent, and it will make your head spin. The timing will be hard to pinpoint, and usually when you least expect something is when it happens. Markets go up after a long down period, and they go down after a long up period – those periods may just happen to be the same trading day.

Have a plan, have a back up plan, re work your plan, revise the details of your plan, and execute your plan as best you can, and you will almost always come out head. Those that fail at this simple task will almost never get ahead.