Hi Everyone,
I spent a decent portion of my early career (and my own money) trying to fight the prevailing trend. The seduction of catching a bottom, or calling a top was just too much for my young mind to pass up. Sometimes, the market just didn’t make sense. In 2009, as the market attempted to bounce in March, the global economy was in ruins. The banks had started to fail, recession was the talk of the town, and commercial real estate was the next shoe to drop (sound familiar?). As the market continued higher, I was certain the trap door was going to fall out of the bottom once again, just as it had done twice in 2008. But it didn’t. It continued to climb the proverbial wall of worry, closing higher by 23% for the year, and almost 70% higher than the intraday low in March 2009. The experience of trying to trade a market I wanted, instead of the one that was in front of my face was invaluable, sowing the seeds for our playbook in 2020, which helped us navigate the COVID crisis.
That early experience set the stage for everything that came after (including Second Level Capital). Learning how to take emotion out of analysis. Trading the market as it is. Being less concerned about missing out on the next move, knowing there will always be another entry. Ebbs and flows in the business cycle are always for different reasons, but the human nature embedded in our own fear and greed remain the same. Learning how to quantify these emotions to produce potential opportunities is likely to be our main focus for the foreseeable future.
While we remain cautious there will be a pullback in the next month or two, there is ZERO evidence it is imminent. Could be today, could be next week, could be after the S&P 500 makes a new all-time high. No one knows. No one. There are a few pieces of data that have caught our eyes, suggesting this may not be the greatest time to put new capital to work, but we will continue monitoring and if anything presents itself, we will reach out.
That’s it for this month, and a special happy birthday shout out to Second Level Capital. It’s been 5 years, this month. Can’t believe it, and we can’t thank all of you enough.
Stay Cool,
Adam