An asset's price is ultimately determined by what someone is willing to pay, making the market a game of predicting collective human emotion, much like trading baseball cards. Even fundamentally sound assets can crash if sentiment turns negative, meaning investors are gambling on the emotional state of others.
Instead of simply owning different stocks and bonds, a more robust strategy is to hold assets that perform differently under various economic conditions like high risk, instability, or inflation. This involves balancing high-volatility assets with stores of value like gold to protect against an unpredictable future.
As Mark Cuban advises, eliminating debt with a 23% interest rate is financially equivalent to earning a guaranteed 23% return on that money. Before seeking gains in volatile markets, the most certain and impactful financial move is to stop paying high interest to lenders, effectively locking in that return.
A strong investment thesis for silver is based on its fundamental utility, not just speculation. Since 60-70% of its value is tied to high-tech manufacturing for robotics and AI, its demand is likely to remain stable or grow, making it a robust long-term holding tied to technological progress.
Investors borrow Japanese Yen at low interest rates to buy high-growth assets like NVIDIA, pocketing the difference. When Japanese rates rise, these investors must sell their stocks to cover the debt, causing a cascade of selling pressure unrelated to the company's performance, revealing global market interconnectedness.
Modern trading platforms use AI to monitor margin accounts. If your collateral's value dips below a required threshold for even a millisecond, the system automatically sells your assets to protect the broker. This instantaneous, automated process can wipe out a portfolio before a human can possibly react.
Unlike traditional markets with fixed hours, Bitcoin trades continuously, allowing it to react instantly to global news like the Japanese bond market sell-off, which occurred while US markets were closed. Its price action can serve as an early, real-time indicator for broader market sentiment and events.