Sloper Level: Nostradamus

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Note from Tim: Thanks to the much, much more interesting market (as opposed to just one month ago, when it was ungodly dull just crept up 0.5% day after goddamned day), my inbox has been flooded with myriad interesting characters, each of whom has their own tale.

I received an absolutely extraordinary email from one particular gentleman, who shall remain anonymous. After receiving this email, I asked his permission to share it with you, which is generously granted. Enjoy, and be amazed (note the only editing I have done is to boldface some items for emphasis):


I’ve noticed several references in your recent posts to the astoundingly accurate behavior of the markets and selected stocks to the price-points indicated by your previously published technical analysis, including references to whispers from the deity, which I understand/appreciate as metaphorical in nature. I also appreciate that you have publicly communicated your current approach to trading, which is mediated by understandable prudence.

I long have viewed your technical analysis as quite extraordinary, even though I generally have chosen not to trade on your ideas. When you offered to upgrade me last year, candidly I felt that I had not “earned” the right to trade on your ideas. Fortunately, after re-subscribing on a “full pay” basis, this inhibition felt as if it had been lifted.

Another reason I did not trade on your ideas previously was my intuition that the herd-like mentality that has developed over the years, in no small measure because of the introduction and growth of algorithmic trading , market- and sector-driven ETFs, derivatives, platforms based on AI and big data, etc. were so “overwhelming” as to render both technical analysis (as typically practiced) and fundamental analysis inadequate to compensate for Moore’s law, the integration of theoretical physicists to the staffs of the trading desks and the back rooms of banks, hedge funds, etc.

As background, since the early 80s I have been a trusted advisor (attorney) to “uber” wealthy (generally $1 billion – $15 billion) individuals and families in the US and around the globe. As such, I have represented many of the first-movers in the area of computerized trading in stocks, commodities, derivatives, etc. (think the founder of [redacted] Brokers and his cohorts, among many others), the founding principals of dozens of major hedge funds and private equity funds; and extremely sophisticated family offices of all kinds, some of which I co-manage with family members with the benefit of advice of independent investment professionals (institutional and otherwise), and also serve as “independent” trustee).

As it happens, around 2004-2005 I was invited (as part of a group of 60) to participate what might be described as a “war game simulation” of a China-based bird flu epidemic. No doubt other groups of 60 were invited to participate on other days. We met collectively for several hours and were provided with an overview of all available information regarding virus. Then we were put into groups of five and led to separate conference rooms (on the ceilings of which were plastic bubbles to enable observation and/or filming) to develop a proposed national response. The other four members of my group were CEOs of multi-national corporations. The scenario involved an outbreak in a small province of China, during September, in respect of which China was not forthcoming with meaningful or accurate information.

Although I lacked the “stature” of my fellow group members, I have never hesitated to express my thoughts candidly and proactively. My recommendations no doubt struck others (at the time) as draconian in nature, eg, travel restrictions, testing and investigation of contacts prior to travel and after landing; prioritizing the availability of Cipro (the only medication thought to be effective) to first responders, health care providers, key personnel in infrastructure, governance, policing, waste disposal, etc.; temporarily closing schools and replacing daytime talk shows and cartoons with educational broadcasts; and temporarily closing houses of worship and malls, etc.

When I mentioned the closing of malls, the other members of the group treated me in a manner that perhaps only Arlo Guthrie can describe adequately (e.g., in “Alice’s Restaurant” when he describes being asked to sit on the “Group W” bench). Essentially, my suggestions were treated as hysterical in nature, primarily — and I kid you not — because of the expected adverse impact on the “X-mas sales season.” When I heard this rationale I responded in a way I regretted immediately (because it precluded my suggestions from being taken seriously by others) but continue to believe was entirely appropriate, namely, “Christmas sales? Are you fucking kidding me? What about the health and safety of the American people?”

Not surprisingly, the consensus of the group (over my objection) was a more tepid response. Thereafter, all groups assembled to present their proposed responses, which differed from the consensus response of my group only in the particulars, not in substance. I chose not to request an opportunity to present a dissenting opinion during the group meeting as it clearly was not welcome.

The [Federal agency in charge] then ran its “simulation” based on the consensus recommendation and the result was 25 – 50 million deaths in the US, many if not most of which could have been prevented.

I mention this because two Fridays ago when I spent a few early morning hours reviewing charts, including your “short” list as well as other ideas you had shared but had chosen not to act upon at that time (e.g. consumer ETF), my recollection of the “war games simulation” (which I hadn’t thought about for years) flooded my awareness and that, combined with my “gestalt” of the charts (and related analysis) that you have so made so accessible (I do not pretend, even remotely, to have any expertise in technical analysis) flashed warning signals that were both clear and compelling. Thankfully, I was very fortunate both to sell my entire long holding (avoiding losses that now would total in the hundreds of thousands of dollars) and also to dip my toes with the short positions I summarized in my earlier email. I exited the market last Tuesday primarily because my preference is to spend my time enjoying life with my pup (Denali – 9 month old female chocolate lab) in the extraordinary natural beauty of my surroundings, which I find virtually impossible to do when hyper-focused on the trading screen or consulting with my clients.

Denali, who is quite clearly a very good girl.

I realize that you are not in a position to respond to the many emails you must receive and also fulfill your many other personal and professional responsibilities. I am sharing this simply for informational purposes and to acknowledge my appreciation of your expertise, efforts and integrity.

To be clear, I do not mean to suggest that the result of the prior simulation are in any way indicative of the potential or likely results of Covid-19.