Subject:
I really want to hammer home something simple: you just need to spend a few minutes a day observing the market.
Not caught up with what the president is doing. And when this president is no longer in office, there’ll be some other nonsense to distract your attention and get the markets moving up and down.
Remember
the markets need something to latch onto. If they don’t move up and down, no one makes their VIG,
meaning the market makers and Wall Street titans need prices to go up and down so they can get a discount when enterting a trade
They know that everyone wants immediate gains.
But an even more important lesson is that not everyone is willing to show up every day to do the work.
I’m not
I’ve got a full-time job.
Maybe you do too.
And nine out of ten times, even when opportunity shows up, you may not be able to seize it. You don’t have the frame of reference, the experience, a mentor to get you there.
I’m just trying to show you a different way of looking at things. To be calm. To not get worked up if you miss an opportunity
that’s the most important thing.
Scott Adams, the famous cartoonist and podcaster, always said he doesn’t trust stockbrokers and that no one can predict the future.
And I get it.
But I think the better frame is this:
the best investors and traders aren’t predicting the future. They’re measuring risk. They’re always asking
What’s the lowest risk for the biggest payoff? What am I willing to lose? Not how much am I going to make.
That one shift changes everything.
So if a Broker calls about the risk on a trade, keep him or her!
Another Scott, the one keeping the Treasury seat warm, bet big on shorting the British pound because he saw the risk as essentially nil and the reward in the billions.
Same with Bitcoin at a dollar or $400.
The risk-reward was obvious —>if you had the frame of reference to see it.
One way to start reducing risk is by looking at 52-week lows.
Because everyone that is selling has already done so.
And that’s one part of an eight-part sequence I want to walk you through:
How to observe the market unlike the crowd. Think of it like being a real estate agent. You’re not just looking for value.
You’re looking for where the money is and where it’s leaving.
So here’s what the 52-week lows are telling us right now:
AI disruption — big surprise. Software companies that were amazing growth stories are hitting lows. Salesforce, Snowflake, Workday, ServiceNow, Asana, HubSpot, UiPath, Accenture.
The market’s repricing what AI replaces.
Housing slump — Mohawk, Home Depot, Louisiana Pacific, KB Homes, Ethan Allen, One fell 10% after congressional reports showed trade tariffs led to a loss of nearly 60,000 home construction jobs.
(I want to fact-check that one, but the trend is real)
The GLP-1 diet wave — food companies going down.
General Mills, Flower Foods, Hormel.
But then McCormick is buying Unilever and that’s a contrarian move worth noting. McCormick’s always been a champion.
Healthcare — Abbott, Boston Scientific — big names, out of favor.
And Nike. I mean, they might not even stay in the Dow Jones.
These aren’t some fly-by-night tech names.
These are major companies just out of favor. That’s the signal.
Either this is a broad market sell-off, or money’s off the table until the AI and diet disruption story plays out.
That’s your five-minute market observation for today.
Notice what I’m doing here: I’m verbalizing what you’re reading.
That’s what a broker used to be for. Your psychologist. Your bartender. You’ve got to talk it out.
If you’re not going to talk it out, at least listen to someone to get some consistency.
I’ll start giving you a list of things to watch.
Doesn’t have to be me.
But I’m going to try to do this daily.
And I don’t think there are many people talking like this.
Hope your 2 o’clock siesta has been pleasant
— Eric
