There is obviously much to say about what is happening now since the “Tariff Wars” broke out and the global markets went into a tailspin last week – Thursday was the second largest down day since 2008 (I believe) and Friday was the largest trading volume day in history.
Against that, Bitcoin held up pretty good and even went green heading into the weekend, spurring many calls for the long awaited “decoupling” from the wider markets.
It is now Sunday night, the Nikkei 225 futures opened down 5% a few hours ago, and the Dow Jones futures are currently at (checks notes)… -1,200 pts. That’s actually off the lows, was -1,500 when I first checked.
Gold is down (after getting absolutely rekt on Friday), oil is down, copper has crashed. The word on the street is that hedge funds have been getting margin called over the weekend, the CME raised margin requirements across the board on Sunday.
Bitcoin has lost the $80K level, currently around $78K – horrific? You tell me – the last time we were at $77K was just four months ago and we were doing high fives over it.
I’m always proud if you – our long term / low time preference reader, because during these drawdowns none of you ever email me in a panic.
And I don’t expect you to start now – but this time really does look like the wider markets could be in for severe meltdown – but that doesn’t worry me as much as what I think these tariffs could do to the economy as a whole.
We’re headed for a recession, and it’ll be a pretty bad one.
We’ll get into that in the mid-month, but the game plan for tomorrow is this:
Do Nothing.
I did some ordinary buys on Thursday and Friday, some non-Bitcoin, non-crypto stuff: Constellation Software, opened a position in their spin-off Topicus, added to my Amazon and after many years of being out, which cost me dearly, re-entered Fairfax Financial.
It looks like I may have jumped the gun on that.
There’s also a few other companies I’m eyeballing for a decent entry – we’re not there yet.
Remember our advice for times like this – the decision tree is very simple:
We’ve spent many issues chronicling how we’re in the midst of a monetary regime change that will see Bitcoin wind up as a component of the next monetary system.
We knew it was going to be rough and volatile. Here we are.
If you have dry powder (in your equities account) – sit on it for now, we don’t know how low this will go.
(If you’re in a position to buy more Bitcoin, do it all the way down. I just sold a premium domain name and I’m rolling 100% of the proceeds into Bitcoin).
But the last thing you do tomorrow, or this week – is sell in panic. That is the worst possible move (unless you no longer believe the thesis, in which case you sell the moment you realize that, regardless of the price. You should be re-examining your beliefs and re-evaluating your theses on a regular basis).
My personal plan for tomorrow is to try to stay off social media completely – between this and the election up here in Canada it’s just an echo chamber of negativity.
The best thing I did today was disconnect for most of the afternoon and read Jeb Blount’s “Selling in a Crisis” in one sitting. While it’s geared toward the sales professional, it is a fantastic tome on mindset and whatever your roles is, it applies to you. Every time I saw the word “salesman” I just mentally switched it out for “CEO”.
If you spent all day tomorrow not looking at the markets and reading that book instead you will probably be light-years ahead of the crowd.
This too shall pass, and at the end of it – the liquidity engines will almost certainly fire back up. We all know what happens then. 
