The Pomp Letter - Redneck Rich Financial Markets
To investors, The last few weeks have been filled with fear, uncertainty, and doubt in financial markets once the Fed made it clear that the anticipated interest rate cuts would not be coming as quickly or aggressively as most market participants were hoping for. But don’t let market sentiment fool you. The good times are still rolling. In a Wall Street Journal article this morning titled “Investors Are Striking Gold All Over,” Gregory Zuckerman and Gunjan Banerji highlight how well asset prices have performed over the last 6 months.
If you were to add bitcoin’s price to this chart, which is up more than 80% in the last 6 months, it would be the best performing asset on the list by a wide margin. But here is what is the most interesting part to me — if you look at the Dow Industrial Average, you see that COVID and the 2022 rate hikes barely created blips in a longer trend that has seen the index surge parabolically since the Global Financial Crisis. When you hear people talk about a “regime change” in financial markets, the data is becoming overwhelming. Investors have benefitted from one of the longest bull markets in history. The scale and speed of this is hard to comprehend until you zoom out and see the difference with any time period before 2008-2009. While this bull market has raged on, some investors have preached about assets being overvalued. They have called for a deflating of asset prices. They have predicted doom and gloom. The story for these individuals or organizations has long been that markets are broken and eventually we will see a return to prior trends and values. But that hasn’t happened. Instead, asset prices have merely accelerated even faster and further, regardless of what the critics preached. Historical trends and valuations haven’t mattered nearly as much as the pessimists wanted you to believe. The best investment strategy was literally to get long and chill. Unfortunately they don’t teach that in finance classes. The reason I bring this up is because the pessimists have been wrong for almost 15 years now. The Dow Jones shouldn’t be at a new all-time high with interest rates over 5%, but that is exactly what has happened. You can be right or you can make money. Be very careful about trying to win the intellectual debates. Your portfolio doesn’t care about the number of likes you get on your social media posts. It only cares if you were correctly positioned to benefit from the structural changes that have occurred in the market. This doesn’t mean that you should indiscriminately buy every stock or asset you hear about. Gamestop went up quite a bit in the last few days, but it has dropped 20% in the last 24 hours. The market still has some semblance of reality. Laws of supply and demand still rule the day. When I was growing up in North Carolina, there was something called “redneck rich.” Urban dictionary defines it as “when your truck costs more than your house or owning an expensive truck for which you are too poor to buy gas.” There are even songs about it. This one starts with “I ain’t Elon Musk, but I got a quarter-inch socket trying to make a rocket out of this truck.” I feel like markets are becoming redneck rich. The average American is struggling to pay increasing home and food prices, but the $500 they put in their Robinhood account continues to grow in value. The sophisticated math geeks on Wall Street keep saying their models predict a big crash right around the corner, yet the everyday person keeps buying a few stocks and watching them go up. Redneck rich is all about having money to get the things you find important. Maybe the equivalent in financial markets is being able to have a small enough brain where you don’t need models — you just get long and chill. That is my new strategy. Be redneck rich in markets. Don’t overthink it. Don’t fight the trend. Just let the Fed and politicians debase the currency and increase asset prices over time. They will make you rich, regardless of whether you are a redneck or not :) Hope you all have a great end to your week. I’ll talk to everyone on Monday. -Anthony Pompliano Kenny DeGiglio is the Co-Founder of Dream Startup Job and Crypto Academy. In this conversation, we discuss tips and tricks for landing a job in crypto, remote work vs in-office, US-based vs. international firms, compensation, bear vs. bull market, Dream Startup Job, an overview of Crypto Academy, and the benefits of going through the training program. Listen on iTunes: Click here Listen on Spotify: Click here How To Get A Job In Bitcoin & CryptoPodcast Sponsors
You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren’t finding this valuable. Nothing in this email is intended to serve as financial advice. Do your own research. You're currently a free subscriber to The Pomp Letter. For the full experience, upgrade your subscription. |
Older messages
Podcast app setup
Friday, May 17, 2024
Open this on your phone and click the button below: Add to podcast app
This Stock Continues To Appear Highly Undervalued
Friday, May 17, 2024
Listen now (6 mins) | To investors, The Sohn Conference, where investors pitch their best investment idea, was hosted on April 3rd. The next day, I wrote to this group and said that I would have
The AI Bots Are Going To Need Money
Tuesday, May 14, 2024
Listen now (4 mins) | To investors, OpenAI announced GPT-4o yesterday. The demos were incredible, including real-time language translation, a clean verbal interface where users can speak to the model,
Crypto Is Being Politicized Which Should Not Be Surprising
Monday, May 13, 2024
Listen now (6 mins) | Today's letter is brought to you by Consensus 2024! Consensus 2024 is happening May 29-31 in Austin, Texas. This year marks the tenth annual Consensus, making it the largest
Podcast app setup
Sunday, May 12, 2024
Open this on your phone and click the button below: Add to podcast app
You Might Also Like
How to sign your first client this week
Saturday, September 28, 2024
The Ultimate Formula
You’re using AI wrong
Saturday, September 28, 2024
Most businesses still aren't taking advantage of AI technology. They're either using it wrong, or not at all. Let's fix that. Join me and my team for a brand-new webinar on Tuesday, October
The Death of Feedback
Saturday, September 28, 2024
Does It Even Work Anymore For All But the Best? To view this email as a web page, click here saastr daily newsletter Feedback: Does It Even Work Anymore For All But the Best? By Jason Lemkin Friday,
ESG perception vs. reality
Saturday, September 28, 2024
Also: The world's top startup hubs; All-new research on evergreen funds and middle market consumer retail; Private debt funds are gaining traction... Don't want to receive these emails? Manage
‘We Really Need To Think of Ourselves as Performers’
Saturday, September 28, 2024
We spoke to author and consultant Cody Royle about his four craft areas for coaches, training our concentration levels and treating coaching as performance.
How we got +300% people to read our content
Saturday, September 28, 2024
Every business - big or small - needs an e-sign tool in their stack. But they cost so much. Get this lifetime deal on the best Docusign / PandaDoc Alternative (https://www.rockethub.com/deal/flexisign/
Chinese AI Expeditions over the West Ocean
Friday, September 27, 2024
A Short Summary of Chinese AI Global Expansion (March - September 2024)
🔍 I’ll Find Untapped Revenue On Your Website.
Friday, September 27, 2024
There's $100K+ sitting on your site….
Mat’s Top 16 Companies In The YC S24 Batch
Friday, September 27, 2024
Out of 250+ Companies, Here Are My Favorites (And Why They Still May Fail)
World of Warcraft glitch results in player item loss -- maybe web3 gaming has an answer?
Friday, September 27, 2024
PlayToEarn Newsletter #246 - Your weekly web3 gaming news