Your Power to Revoke Distress

January 9, 2021

If you are distressed by anything external, the pain is not due to the thing itself, but to your estimate of it; and this you have the power to revoke at any moment.”

There's a lot of noise out there.

It's poison.

The glorified gossip columns and cartoon networks keep proving to be the equivalent of sugar and trans fat packed fast food.

Don't be mentally obese.

Stick to price.

It's better for the portfolio.

It's better for the soul.

It's a Bull Market you know...

I'm not sure if you've noticed, but owning stocks and spending our time looking for stocks to buy has been a much better idea than shorting stocks and spending your time looking for stocks to sell.

It's not even close.

Just think back at all the people who told us to do the opposite every day, every week and every month since the Spring.

Gross.

Glad we laughed them off and focused on Price. I don't know where the hell we'd be without it.

Now, as we enter 2021 we want to continue implementing this strategy of buying breakouts, not shorting them. We want to buy the stocks and sectors that money is rotating into, not shorting those. We want to acknowledge the expansion of breadth and increased participation in stocks around the world, not blind fold ourselves and pretend it's not happening.

New. All. Time. Highs.

Do you want to see what Risk Appetite looks like?

This is it:

Keep an eye on these 4 indicators. If they start rolling over and the defensive trades catch a bid, then we can start to position ourselves differently. In the meantime, why would we stop doing what's working to do something else?

And do you know what's not working?

They say it's a hedge against inflation, but it seems to be a better hedge against making money, if you ask me.

Gold is not just struggling vs Stocks, but it's in absolute freefall relative to the rest of the commodities space.

Bonds also broke down to new lows this week as interest rates spiked. The U.S. 10-yr Yield was finally able to exceed that 1% and I think it continues higher towards 1.4%.

All of the Intermarket relationships are pointing to that as well, particularly Regional Banks stocks over REITs and Copper outshining Gold:

It makes sense for Bonds and Gold to struggle so much in this environment.

When they start outperforming, then we can look to stocks and see what's wrong with them.

But that's just not happening right now. It hasn't been either.

So we're buying these stocks. They're my favorites.

Q1 2021 Playbook

We're putting the finishing touches on our first Quarterly Playbook of the year.

This might be my favorite one to ever put together. We've got some new features we're going to show off and the fact that we're kicking off a new year makes it all that much better.

2020 was our best year ever, by a long shot. And even with that, I'm confident that we're going to crush last year. Watch!

Premium Members look out for the Q1 Playbook to drop any minute!

Shout out to Jim O'Shaughnessy, Marcus Aurelius and Trader Ferg for the inspiration today.