THE 2020 STOCK MARKET:

After the fastest crash in history, we've seen a massive run up and the most bullish price action in years.

With bears calling for a recession and bulls calling for a full recovery, who will win the battle?

Let's dive into the facts below

Right now:

- Stocks are at record valuations
- Earnings are at records lows
- Companies have record debt + leverage
- Coronavirus cases are steadily growing nationwide

If you remove the Fed, it's hard to imagine a bull case.
It's all about liquidity.

Berkshire Hathaway $BRK.A is holding record cash. The last times they held this much cash preceded -50% market crashes ('00, '08).

Companies like $MSFT, $AAPL, $GOOG, $FB are following suit. Companies are positioned defensively, for good reason. Now is the time to be risk-off.

Top companies including ­Disney, Apple & ExxonMobil raised $1tn in 5 months to fill "war chests" related to coronavirus fear.

US companies have borrowed nearly a year's worth of cash in just 5 months. A whopping 85% increase. During the same period last year, they raised $540B.

The Fed's balance sheet has topped $7 trillion for the first time. Expected to continue, it's on pace to surpass $10 trillion by end of 2020.

There's a direct correlation between the Fed balance sheet & performance of #stocks. As long as there's cheap money, stocks are a buy.

Say it with me: Printing money does NOT solve structural issues. History has proven this many times.

Years of low interest rates, zero inflation, and negative yields have led to the greatest asset price distortion the world has ever seen. Eventually, there will be a reckoning.

A lot of rich people were caught off guard by coronavirus. Market crashed +people lost billions.

Many are in disbelief the economy is heading into recession. It seems like a coordinated effort to pump market as high as possible so they can exit near ATH prices we saw in Feb.

You don't have to be a "bull" or "bear" to make money. When investing, all that matters is survival and knowing when to go big.

Holding onto a bias can lead to devastating losses. Accept them as learning experiences. Being wrong is okay. But staying wrong is a sin.

Always have an invalidation for your ideas.

If you've been bearish $SPX from 2,200-3,000 at what point do you admit you're wrong? Mine is ATH.

Pick a time frame, invalidation, & stick to it. If things go against you, get out—quickly. Taking less risk is smarter in the long run.

When trading/investing you have to be dynamic. Short term, I am bearish. But long term, I am extremely bullish on the global economy.

Even though I am not a buyer at these prices, I understand the bullish POV. Market timing can be dangerous, and it's unwise to fight the Fed.

This year, I lean towards asset prices declining and the US, UK, & China falling into #recession.

Over the next few years, I expect a full recovery and for all this to be a blip in time. As shown, the stock market is one of the greatest ways to accumulate wealth over a lifetime.

By 2021, there will likely be a generational opportunity to "buy the bottom" or sell The Big Short™.

When the market has extreme tops and bottoms, then and *ONLY* then is the time to go big. Traders blow their accounts over-leveraging on small moves.

Until then, be tactical!

In conclusion:

Be smart. Be flexible. Know when to go big. Don't get caught up in "bull" vs "bear" tribalism. Create well-thought out plans, & act boldly. Always have an invalidation. Fail fast + revise.

And remember, trading isn't about being right.
It's about making money

If you found this thread informative or useful, please RT or like so others can learn new things as well! I do this out of passion, but support is always appreciated :)

My goal is to help others make better decisions about finance & investing. I hope this was helpful! Cheers