An Epic Day On Twitter

Twitter had one of its greatest days on Thursday over the fight between Elon and Trump. Ditto Bluesky. It was both hysterical and horrifying at the same time. Don't worry, this will not be an attempt at political analysis. There was a fight that played out publicly on Social Media, that's it from me. 

But this sort of high stakes argument is certainly not a normal thing for markets to try to sort through. Hopefully you'll grant me that much. After I hit the publish button on this post, I 've got two tabs from Barron's open to read about this news. One article includes the word disassembly and the other includes the word damaging. 

Many times this year, I've seen the following picture on Twitter and elsewhere. 

The meaning of course is that in environment like we have now, and we can throw in things like Fart Coin (that is a real meme coin BTW), all the important tenets or building blocks for how to invest have become much less important for the time being. Maybe we should qualify that to separate the short term (voting machine) from the long term (weighing machine). 

So it is that the current situation makes the capital markets not reliably analyzable. I have used that term at least one other time since April 2. Indiscriminate selling is absolutely the worst thing that a long term investor can do. 

If sequence of return risk is relevant to your situation, then that needs to be addressed regardless of what is going on in markets. Someone who is a long way from retiring doesn't really need to worry about sequence of return risk but someone retiring soon does and that would be true even if things were going great right now. 

Whatever your idea of a robust portfolio is, now is probably a good time to make sure you have robustness built in, while the market is kind of high if you haven't already done so. If you read this site regularly, you know my preference for small positions to several different alts, all of which should either go up or be flat when equities drop realizing that not all of them will work every time. Lately, even managed futures has shown some signs of life.

Dialing up a portfolio's beta to look more like the market or dialing it down to look less like the market has smaller consequences for being wrong versus the poor bastard who sold in early April and has watched the market rally for the last two months. Markets very frequently go up when they shouldn't. I feel like markets shouldn't be rallying but they are. The upmove can still be captured even with defensive holdings which is what the 75/50 (75% of the upside with only 50% of the downside) is all about and probably very helpful when markets are not reliable analyzable. 

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