Keith, thank you for this excellent analogy on the usefulness of the Fed in today’s day-n-age.
Asking the Fed to deal with inflation is like asking a barber with scissors in his hand if you need a haircut. — Keith Fitz-Gerald
It took us a tweet thread to get that point across:
What shall ye olde Fed’s proclamation be on the morrow? Hold ’em or raise ’em? A little or a lot? It feels like this could be a very important decision for the future of many things.
— Green Garage Investing (@GreenGarageInv) March 21, 2023
According to The Fed’s proclamation inflation is 6%. According to Truflation.com’s more data-driven and dynamic approach, inflation is 4.03% AND clearly on a downward trajectory. We think the cabal that runs the Fed might want to RETHINK unnecessarily raising interest rates at this unprecedented rate before breaking the economy and causing much larger scale pain and suffering. This is supply chain resiliency strengthening and energy transformation inflation, NOT circa 1980 demographics inflation. Buy some news tools, Jerome.
Keith has a way with words. See how succinctly he explains why long-term investing is the winning strategy for all retail investors who have better things to do than stare at stock charts all day long.
“Why all the selling yesterday?
My email lit up after yesterday’s Fed announcement and the ensuing selloff.
…What the fruitloops just happened?
…But I thought the end of hikes was a good thing?
There’s actually a very simple explanation.
The whipsaw is a textbook example of market mechanics.
Big, leveraged traders swept prices higher to take out all the breakout entries that had been placed ahead of the Fed in anticipation of a pause or a cut while simultaneously dragging in the FOMO/MOMO money.
Remember, Wall Street can see your orders and pays for order flow.
Once that was done and they’d cleared the shelf, so to speak, they orchestrated a rug pull with the specific goal of taking out the trailing stops and busting those who had let go of their hedges.
Next, they’ll grind to burn the premium. My guess is that they’ll draw in some of the bottom fishers first because, well, you never waste a crisis. I think the green lasts a few bars at most; in fact, it may be gone by the time you read this.
Fortunately, there is a solution—and it’s one savvy investors in the OBA Family know all too well.
The way you win is to take away Wall Street’s advantage by NOT playing their games in the first place.
This isn’t rocket science.
Zoom out
Use tactics that take away their advantage
Adopt a different time scale“
More KFG →
Don’t believe Keith, here is what ChatGPT has to say about Wall St manipulating retail investors:
“Wall Street investors, who have access to large amounts of capital and advanced trading technology, can use their resources to manipulate the stock market against retail investors. One way they can do this is through a technique called front running, where they use their advanced technology to place trades ahead of retail investors, taking advantage of price movements before they occur. Another technique is called spoofing, where investors place fake orders to create the illusion of demand or supply, which can influence the market price.
In addition, Wall Street investors can use their influence to spread false information about a company or stock, which can cause retail investors to buy or sell based on incorrect information. They can also engage in insider trading, where they use non-public information to make trades before the information is made public, giving them an unfair advantage over retail investors.
Overall, Wall Street investors have the resources and knowledge to manipulate the stock market against retail investors, which can make it difficult for retail investors to compete on a level playing field.”
AI image prompt: why is long-term investing best for retail investors who want to maximize the compounding of their money
