The Wolf Den #591 - The Price Of Inaction
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In This Issue:
The Price Of Inaction
Bitcoin Thoughts And Analysis
Legacy Markets
Come To Las Vegas
A Credit Suisse Collapse?
Coinbase Went Down?
The Fed's Closed Door Meeting
The Importance Of Crypto Oracles With Mike Cahill, Pyth Network
My Recommended Platforms And Tools
The Price Of Inaction
We often deliberate over the the consequences of our actions, but rarely consider the implications of inaction.
Let’s use baseball as an example.
When a player steps up to the plate, their performance either brings the team closer to victory or further from a win. Even doing nothing as a batter has an impact on the game's final outcome. Choosing not to swing at a bad pitch can earn the batter a free base on a walk, but failing to swing at a good pitch can lead to a strikeout. For the baseball player, both action and inaction carry immediate consequences.
When an investor steps up to bat, the rules and expectations change drastically. Failing to swing at pitches comes at no immediate cost. Even a swing and a miss with proper risk management can result in a setback so insignificant that it is barely noticeable. An investor can show up every day, dig their feet in the sand, watch the pitches fly by, and still be successful.
But eventually, an investor must swing. For the investor, action brings immediate consequences, whereas inaction has delayed implications.
Let’s dig in.
A ball player can succeed without getting a hit, but an investor is required to swing. In the game of investing, there are no umpires to grant you a free base as a reward for inaction. There’s also no game clock and the rules of the game and the opponents are constantly evolving. Investors must consider the cost of inflation and an ever-changing macro environment when they are deciding whether to swing.
The cost of fiat debasement adds up over time.
Warren Buffet is a huge baseball fan and often draws metaphors between the sport and investing.
“The stock market is a no-called-strike game. You don’t have to swing at everything – you can wait for your pitch.”
“What’s nice about investing is you don’t have to swing at pitches. You can wait for the pitch you want.”
It’s all about finding the balance between action and inaction. The best investors find comfort in watching pitches fly by, patiently waiting to attack when the time is right. Inflation doesn’t make them flinch and the defensive lineup does not affect their decision making. Simply put, they swing when the time is right.
We can’t all be professional ball players or investors, but we can all swing when the opportunity is right. Singles and doubles add up over time. And if you are ready when the right pitch comes screaming down the pipe, you can swing for the fences. It will be worth the wait.
Bitcoin Thoughts And Analysis
MONTHLY CHART
MONTHLY CHART
I have not shared a newsletter since the monthly close, so this is the perfect time to take a look.
I have posted this monthly ascending channel countless times, so it's not worth diving too deeply into the analysis. What is notable is that the new monthly candle opened very, very close to support. This has held for a decade, so we can certainly view this as a key moment.
We have an entire month to see where the candle closes, but now is certainly the time to start paying closer attention to larger time frames.
Lower time frames are simply showing the same sideways chop that we have been experiencing for months.
Legacy Markets
Key events this week:
US construction spending, ISM Manufacturing, light vehicle sales, Monday
Fed’s Raphael Bostic, John Williams speak at events, Monday
Euro-area and EU finance ministers meet, Monday
Eurozone PPI, Tuesday
US factory orders, durable goods, Tuesday
Fed’s John Williams, Lorie Logan, Loretta Mester, Mary Daly speak at events, Tuesday
Eurozone services PMIs, Wednesday
OPEC+ meeting begins, Wednesday
Fed’s Raphael Bostic speaks, Wednesday
Eurozone retail sales, Thursday
US initial jobless claims, Thursday
Fed’s Charles Evans, Lisa Cook, Loretta Mester speak at events, Thursday
US unemployment, wholesale inventories, nonfarm payrolls, Friday
BOE Deputy Governor Dave Ramsden speaks at event, Friday
Fed’s John Williams speaks at event, Friday
Stocks
Futures on the S&P 500 rose 0.6% as of 8:07 a.m. New York time
Futures on the Nasdaq 100 rose 0.3%
Futures on the Dow Jones Industrial Average rose 0.8%
The Stoxx Europe 600 was little changed
The MSCI World index fell 0.1%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.4% to $0.9763
The British pound rose 0.4% to $1.1214
The Japanese yen was little changed at 144.88 per dollar
Cryptocurrencies
Bitcoin was little changed at $19,225.42
Ether fell 0.5% to $1,296.43
Bonds
The yield on 10-year Treasuries declined 12 basis points to 3.71%
Germany’s 10-year yield declined 10 basis points to 2.01%
Britain’s 10-year yield declined 14 basis points to 3.95%
Commodities
West Texas Intermediate crude rose 4.4% to $82.99 a barrel
Gold futures rose 0.1% to $1,674.10 an ounce
Come To Las Vegas
I have failed to share this in the newsletter, and it is already happening next week! If you happen to be close to Las Vegas, then come hang out with myself and an epic list of guests. I am hosting an entire stage for 4 days.
Since most of you can't make it, we intend to livestream the entire thing for FREE!
If you choose to join, you can get 20% off on your ticket using my code: WOLF20.
Register here: http://web3expo.live/
A Credit Suisse Collapse?
This week’s doom porn is a rumor that Credit Suisse Group AG is on the brink of collapse and poised to pull the rug out from under global investment banking.
I am by no means an expert on Credit Suisse, nor do I have all of the relevant information, but the situation looks rocky. CS stock has been in a free fall since ‘07, and the stability of the bank is now coming into question as a result of public announcements that they are restructuring the bank. This particular panic, however, is the result of a recent statement made by the CEO and the public obsession with taking information out of context. The CEO used the statement, “critical moment” to describe their restructuring, and bears interpreted it to mean the bank is on the brink of collapse.
You decide.
Either way, the global outlook is bleak and central banks are pushing markets and financial entities to their limits. Look no further than collapsing currencies, bonds, and inflation for all the evidence you need that something could very well collapse.
For now, I am chalking this up as a rumor until we have further information.
Coinbase Went Down?
The exchange says the issue has been identified and it is working toward a solution.
I haven't been able to make a joke about Coinbase going down in a while, but they did experience a serious bug over the weekend that caused a stir. On Sunday morning, all transactions on the platform were halted as a result of an internal issue causing all interactions with US bank accounts to fail. By the time you read this, everything should be fine, but it's the little things like this that continue to raise eyebrows about the security of assets on crypto exchanges.
The Fed's Closed Door Meeting
October 03, 2022 -- Closed Board Meeting
The Fed is not having an emergency meeting as social media pundits would lead you to believe. Rather, they are having a "Closed Board Meeting," which regularly happens throughout the year. The last time one of these expedited meetings happened was on September 12th.
Get a grip, people!
The matter being discussed is, "the advance and discount rates to be charged by the Federal Reserve Banks." The Fed is not secretly meeting to turn on the money printer or buy Bitcoin. The theories circulating are absurd.
The Importance Of Crypto Oracles With Mike Cahill, Pyth Network
Mike Cahill is the Director of the Pyth Data Association, founded by Pyth Network, a decentralized oracle for financial data. I sat down with Mike at Mainnet and discussed decentralized oracles, on-chain data, and competition with more traditional financial data providers like Bloomberg.
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.
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