Attack the Week (ATW)

Bubble-Talk is Cheap / Weekly Calendar / Dashboard Scan / Asset Allocation Model Update

Monday Thoughts

Apologies for the slight delay in running this service. I was away for a long weekend and travelling all day yesterday, without the right surroundings to write this piece.

There is, however, little to add to my Friday Thoughts, which was printed just before the payroll report was published.

Better numbers, yes.

A bit weaker under the hood for those who look for details.

And then we move on to those things that actually drive markets these days.

Much of the talk in financial town is about the massive rally in tech stocks and AI. Bubble talk is back in the cafes and at dinner parties. It must be the sign of our times that there are surely no other worries but tech valuations.

But let me be clear: “bubble” is a word people reach for when they feel intellectually cornered.

On proper trading floors — and in the minds of serious investors — the B-word rarely does any real work. Not because excess can’t exist, but because the label doesn’t help you manage risk, sizing, or timing. It’s theatre. It’s comfort. It’s a story you tell yourself so you can feel smarter than price.

In my approach to markets, that word almost doesn’t exist. Why? Because complex adaptive systems are not there to be reasoned with. They just are. Price is an emergent outcome of countless feedback loops, reflexivity, liquidity, narrative, positioning, and plain old human behaviour. You don’t “win” by arguing with that. You win by bringing reason to your own process.

So the only question that matters is embarrassingly simple:

Do you want to participate or not?

And if you do, how?

Bubble talk, behaviourally, is often a buy signal to me. Not because it means price must go up tomorrow, but because it tells me people are trying to explain what is — and they can’t. So they pull out the old label in the absence of a better one. It’s a psychological coping mechanism.

To be clear: I’m not saying bubbles don’t exist. They do.

But they are not neat little balloons you can pop on schedule. They’re complex structures. They can inflate, broaden, rotate, and persist for years before they ultimately deflate — and often in ways that don’t satisfy the neat morality tale people want.

Everything moves in cycles. Our job is to recognise what is from what isn’t. Not to moralise. Not to predict. To observe, to size, to manage, and to extract.

And extraction is the point.

Munger and Buffett wouldn’t buy here, that’s for sure — and that is perfectly consistent with their approach. They want a certain type of certainty, a certain type of valuation, a certain type of business reality they can underwrite.

Others buy hands down because it’s the next new thing. They’re chasing monthly or quarterly returns, league tables, and high-water marks. That’s also a “process,” of sorts — just not one I find survivable over time unless you’re exceptionally disciplined and exceptionally lucky.

As for me — and our approach here — it is to not get carried away.

Filter noise from the signal. Detach from narrative.

And apply a systematic model framework that has no feelings about dinner-party words, headlines, or fashionable fears. Models can be wrong, of course. But at least they’re honest. They show you what the tape is doing without trying to impress anyone.

That’s why I created the dashboard on pa-globalmacro.com — so subscribers can see that unfiltered view and then reflect it against their own decision-making. I genuinely believe I’ve created something truly special there. Not because it predicts the future, but because it improves behaviour in the present. The model has shifted to Nasdaq and tech stocks long before the narratives started, and participated in nearly 17% of the rally (see dashboard below).

My subscription prices now include access to both Substack and the technical analysis site at pa-globalmacro.com. For existing members, nothing changes as they can enjoy the full offering at their current prices forever. Those only interested in the models can subscribe directly on the site.

Let’s now attack the week by reading some of Macro D’s thoughts and his latest trade summary of Macro FX trades of the week. We then review the upcoming calendar, examine the latest dashboard output, and analyse the most recent asset allocation decision of our long-standing PAAM Model.

Let’s go!