Leverage

You can get contradictory views on almost every aspect of investing. For every willing seller, there has to be a willing buyer.

I liked this from Stanley Druckenmiller, a ‘guru’:

[In March 2008.] I learned a lot at Soros, but not what I thought I would learn. I did not learn what makes the yen go up or down, or what makes the stock market go up or down. Soros’s great gift was how to use leverage, and how much money to have down based on the risk/reward and your sense of conviction. His view on the yen or the euro was better than random, but not much. And yet he was still one of the great money managers ever because he knew how to bet his convictions. — Stanley Druckenmiller

But Charlie Munger, no slouch himself, has the opposite view to Druck & Soros:

“My partner Charlie says there is only three ways a smart person can go broke: liquor, ladies, and leverage. Now the truth is, the first two he just added because they started with ‘L’ – It’s leverage.” — Warren Buffett

I guess the difference is that Soros/Druckenmiller are traders, and Buffett/Munger are investors.

Soros has said some deeply insightful things. I’ve read his book on reflexivity, a long time ago, but I found it trite. Maybe I should try again.

Einhorn picks

Einhorn’s picks seem fairly conventional. It’s interesting that he is going for a gold miner ETF, rather than a specific miner, like Berkshire Hathaway, which is going all in on $GOLD (Barrick Gold Corp).

Bubble stocks

$AAPL is insane.
Yes, you knew, but … seriously? To me this is dot com bubble all over again, but like back then, plenty of people saw it coming, rather fewer made any money out of the crash.

Dollar

The dollar is not falling against everything. NZD is an interesting exception.

Inflation

US CPI was out last Friday. Even when demand collapsed, it still went up, quite steeply. It’s hard to read a lot into a single number, and of course supply was in deep shock, but everyone (well, the gold bugs, anyway) see this as a sign that inflation is about to take off. That and the fact that the Fed seems set on average inflation targeting, which means that they’ll let it run hot for a good long time before trying to take away the punchbowl (to mix two dead metaphors).

SPX hits all-time high

Twitter (at least my timeline) greeted this with a groan. Lots saying they’ll short it. At some point it must surely crash heavily, but for the moment it seems a safer bet to short money against something ‘real’. Not investment advice.