Attack the Week (ATW)

January 11, 2024

Sunday Thoughts

We all feel lost at times. In my time of deepest reflection and pain, I have sought out various readings. One of them is the excellent book “A field guide to getting lost”. It’s an open invitation for readers to consider the significance of being lost as a crucial part of the human experience. It considers the importance of open-mindedness and the ability to embrace the unknown. Getting lost — whether in the wilderness, in thought, or on life's unpredictable journey — is not something to be feared but rather an opportunity for transformation and insight.

Here are my key takeaways and quotes:

• Embrace Uncertainty: "Leave the door open for the unknown, the door into the dark. That’s where the most important things come from, where you yourself came from, and where you will go."

• Conscious Surrender: “To calculate upon the unforeseen is perhaps exactly the paradoxical operation that life most requires of us." Getting lost is a deliberate choice, an act of surrender to the moment and the unknown paths it may lead us down.

• Balance Amidst the Unforeseen: Navigating life involves balancing planned actions with the acceptance that unforeseen events will occur, requiring flexibility and openness.

• Rediscover the Meaning of Being Lost: We should all reclaim the positive aspects of being lost, viewing it as an opportunity for discovery rather than a state to be avoided.

• Acknowledge the Duality of Loss: Recognizing the dual nature of loss — as both the disappearance of the familiar and the emergence of the unfamiliar — can lead to a richer, more nuanced understanding of our experiences and journeys.

I hope that this will help those of you who have or are navigating through new and unknown waters. One thing is for sure: cherish and be grateful for the good times; you never know what’s around the corner.

Source: Dall-E

It’s almost a joke to even attempt a comparison of the lostness of life to what we are going through as investors. Let’s not lose sight of what’s important, although we certainly have similar phases to tackle. The act of feeling lost in one’s investment journey happens to everyone. Maybe it's only a short blip or a prolonged period where we feel disconnected and, therefore, unable to take risks in markets appropriately. Self-doubt creeps in, leaving us helpless and in need of a reboot. The good times don’t come without those experiences. Yet many feel the Yolo-ing times are possibly endless. They aren’t.

The ongoing ramp in AI-related stocks and equities will raise doubts for many value-based investors. David Einhorn’s excellent recent interview is worth listening to, where he opines that “markets are fundamentally broken”.

I am not in the business of saying what is right or wrong in markets. I am merely in the business of observing where we are and where we are likely going. This mental flexibility allows me to hopefully see what markets are about to do, free of any judgment. This ideally keeps me in a zone that will unlikely endure a place of being “lost”, even though, more often than not, it will be hard for me to understand why markets are pricing things the way they are.

My models are part of the necessary toolset that gives me a read and steer to my observations. They are based on the fundamentals of momentum and reversal, the most prevalent forces in complex systems. If you are interested in obtaining the scripts for your TradingView set-up, please get in touch. I have also compiled a handy guide, which will hopefully be useful.

Let’s now look at the week ahead.