What to do when there’s blood in the streets

I’m a contrarian. When everyone says A, you’ll hear me saying B. Some people can deal with that. Most can’t. My life would be easier if I had the same mentality as everyone else, except for one problem: I would have less money. The one place in the world where you want to be a contrarian, is on the market. You want to be buying things when nobody wants to have them and you want to be selling them when everyone is desperate to get them. It’s dangerous when you’re right and everyone else is wrong. However, it’s also profitable.

The reason contrarians like me exist, the reason we haven’t been removed from the gene pool yet, is because any society that doesn’t have people like us will enter stagnation. We’re not right most of the time, but we’re right often enough to be necessary. You need to have people who are willing to ask: “Why are we all afraid of X?” “Why is everyone so sure X did Y?” “Why is nobody eating X. Some magical book told us so? Why should I believe the magical book?” These are the kind of statements that can get you killed, but they’re also the kind of statements that get you a place in the history books as “the guy who understood X even though everyone around him thought he was evil/wrong at the time.”

Contrarians seem like assholes to most people, but the main reason for that is because our society places so much emphasis on being as inoffensive as you can possibly be. Adjusting to what other people around us are doing just doesn’t come naturally to us. We try it at first, because we realize it could make our lives easier, but it’s difficult for us to hold up the façade. We’re very bad at pretending to like the emperor’s new clothes. Who is the naked emperor today? Here are five numbers to give you a hint:

639

8,000

10,023

22,000

1,320,000

These are respectively, the number of batsoupflu deaths in the Netherlands, the number of flu deaths during a typical Dutch flu season, the number of batsoupflu deaths in Italy so far, the number of flu deaths during a typical Italian flu season and the number of deaths of children under the age of five from diarrhea caused by unsafe drinking water every year.

Here’s a suggestion: Could it be the case that our society may be misjudging different risks? Could it be that people are acting based on fear and hysteria, rather than science and reason? Do you think the answer may be yes? Then it’s time for you to make money. People are capable of acting based on fear and hysteria for a while, but eventually reality catches up with them.

“We’re not going to sacrifice people’s lives for the economy!” A politician looking to score cheap points says, as dumb people applaude. Irrational people can shut down their economy and force everyone to stay inside their home, sure, but eventually they’ll realize that the economy isn’t just there to increase a number in a rich guy’s bank account, it exists for an actual reason: It exists for you. That realization may be hard, it may be painful, but eventually they’re forced to make it. In Southern Italy right now, government officials are discovering that without the existence of an economy, people can’t pay their bills and begin to loot and plunder.

How long can people stay retarded? That’s another question you need to be asking yourself. It’s perfectly possible that it’s going to take two or three more months, before the media is finally forced to acknowledge that Mister Scienceman on TV, who has a Phd in never-being-wrong, had it wrong yet again. Of course they will not face any consequences for the unemployment, suicides, mental illness and bankruptcies they caused. But people will want business as usual to continue eventually.

Right now government officials are massaging their prostates, while fantasizing about how much power people’s fear of batsoupflu has given them. But eventually that starts to bore you. Sure, you can have the kind of totalitarian police state that makes Kim Jong Un green with envy. However, even Kim Jong Un and his brothers enjoy hanging out with basketball players and visiting Eric Clapton concerts.

Even your president or prime minister wants life to continue eventually. “But not if that’s going to kill people!” I hate to break it to you, but everything you do on a daily basis is killing people. Shaking someone’s hand or gathering in large groups spreads batsoupflu, sure. You know what driving your car spreads? Toxic air pollution that kills people. You know what eating meat spreads? Antibiotic resistant bacteria. The device you’re reading this on is using electricity. That electricity came from a nuclear power plant. That nuclear power plant uses uranium, that gave children cancer once it was dug up from the soil. Every single thing we do, screws other people and non-humans over. If you can’t live with that reality, you shouldn’t be asking your government to lock you up inside your house. You should book a flight to Tibet and become a buddhist monk.

Advice for the rest of you

The current situation sucks. The only thing that makes mass stupidity tolerable, is the fact that it’s profitable to be right, when everyone else around you is wrong. I’m not right 100% of the time. I’m right often enough to have made some good money from it.

So, with no further ado, here’s what you want to do. You want to look up the country that’s being ravaged by batsoupflu while you’re reading this. Of course the country probably isn’t genuinely being ravaged by batsoupflu, elderly people are dying who would have died within a few months from other causes if it weren’t for batsoupflu, but that doesn’t matter. What matters is that people panic when this happens.

That’s a known human bias. Human beings overreact to bad news. As a consequence, stock prices overreact to that same bad news. What this means is that right now, there are cheap stock up for grabs, particularly in Spain and Italy. In addition, there are sectors that are worse affected than others. Amusement parks have been heavily affected, but I just really couldn’t get myself to invest in Seaworld, dolphins should not be locked up for our entertainment. Airlines and tourism however, are also heavily affected.

Cruise ships are also heavily affected, but in contrast to the other sectors, there’s a fair chance they won’t recover, as the bad reputation they got from this incident is kind of deserved: Locking up sick old people on a big boat far away from any hospital is a recipe for disaster. This is now so obvious that almost anyone can see it.

So this is what you do. You go to your online broker, you look at small Spanish and Italian companies and you observe how they were doing before this panic broke out. The price was stable or going up before february, but now they’re down by forty percent or more? Research them further, figure out if they’re offering something real. Check their price to earnings ratio, see how they compare to the rest of their industry. Check their price to book ratio, see whether their ratio is healthy.

After you’re done and think to yourself “I like this company”, you need to ask yourself how much of an arrogant bastard you really are. Are you basically a normie? Buy stocks of a basket of companies, with a little bit of leverage. Are you a complete degenerate? Buy call options. Don’t be stupid, don’t buy options that expire in April. Heaven knows how long it will take until people stop being in denial about the fact that it’s literally less deadly than the flu. Please be smart. Most call options are thinly traded, especially far into the future. Don’t just make an impulse buy, do the calculations, check at what price you would break even, check the bid-ask spread.

The reason I’m telling you this stuff, is because opportunities like this are rare. It’s a cliche statement, but Rothschild supposedly said that you need to buy when there’s blood in the streets. Right now we’re in the middle of such a situation. Why not just buy index funds? Because passive investing is in a bubble.

I know some of you will be reading this and saying “you’re a disgusting pig profiting off other people’s suffering!”, but that’s because you yourself don’t have enough confidence to take opportunities when you spot them. If you genuinely want to help people in Italy or Spain, the thing you need to be doing is buying their stocks. Imagine you’re an Italian guy. Your wife was laid off, now you can’t pay rent. You realize you have some stock left from your company’s employee ownership plan. You sell your stock, even though the price looks unfair to you, because you need the money right now. With people like me around, you’re getting a fairer price for your stock.

This is how business works: You offer people services or goods with the limited means at your disposal, to the mutual benefit of both parties. You can offer people charity, but charity tends to insult their dignity, breeds corruption and worse, it’s unsustainable. No organism in nature engages in charity. What wild organisms engage in, are sustainable symbiotic relationships. When you help Spanish and Italian people get fair value for their stock during a period when nobody has spare cash to offer them, you’re participating in a mutually beneficial exchange.

Of course it’s theoretically possible that I’m wrong. If I’m wrong, if this is genuinely not a good time to buy, you need to buy euthanasia pills, or an AK47, because things are about to get very nasty. With the current state of the stock market, Dutch pension funds would have to cut pensions by 20% next year. This thing has now crashed faster than during the Great Depression. How much more can the markets crash exactly?

The thing is, during every previous crisis, it seemed like a bold move to buy anything. It always looks like everything is about to fall apart during a recession. After 9/11 it looked like the world was falling apart. In 2009 we had record food prices, record oil prices, a new influenza virus that jumped species from pigs and an economic meltdown that knew no precedent. It looked like the world was going to shit. People have been predicting the end of the world forever. They’ve also always used the same dumb method: They look around for something bad that’s happening and extrapolate it into the absurd. That’s what they’re currently doing with batsoupflu.

It’s theoretically possible that they have made such bad decisions that everything is starting to unravel now, but I don’t really see that happening. It’s becoming increasingly awkward that the deaths are missing. I lost track of how long the United States has been “two weeks behind Italy” now. Sweden, which doesn’t bother with quarantine measures, also seems to be functioning just fine so far. As the days go by, it’s going to get increasingly awkward that Swedish people are not dropping dead like flies. When it gets too awkward, the measures are lifted.

As I said before, we shut down the global economy, over a virus that appears to be less deadly than the flu. You can look at this as a nightmare, fine, but I can promise you one thing: A few months from now, people will also be looking at this as an opportunity. An opportunity for what exactly? Either an opportunity to buy cheap stocks, or an opportunity to still buy guns and canned food.

Godspeed.

14 Comments

  1. I agree with all your arguments except you are missing good sources this time.

    The normal influenza has its peak the first weeks of Feb. (week 4-8) of the year. Both IT and the NL already had their peaks and likely 75% of the correlated deaths.
    NL https://www.rivm.nl/bibliotheek/rapporten/2019-0079.pdf
    IT https://old.iss.it/site/RMI/influnet/pagine/rapportoInflunet.aspx
    Deaths in the next days will add to this death count…not replace it.
    But the biggest mistake you may be incurring is believing that Italians are exaggerating the number of deaths including people who falls from the bicycle out of distraction by the coronavirus ordeal.
    The opposite is likelier true and there is proof everyone can verify. Deaths have been unreported at 1 to 4 minimum.
    The Eco Of Bergamo is the newspaper that first noticed a chilling discrepancy between official deaths “with” Coronavirus and number of people who is really dying.

    https://www.ecodibergamo.it/stories/bergamo-citta/a-bergamo-decessi-4-volte-oltre-la-medialeco-lancia-unindagine-nei-comuni_1346651_11/

    The Eco is where families in the Bergamo province publishes their obituaries. They do them, funerary services do them for them etc. You can verify it yourself in the digital PDF archive. They have Name and Surnames of real persons. There´s no incentive for their family to lie. You would be surprised how many old people read them to see who died today among their friends. There´s no other way for them to know.

    There are multiple reasons why people are dying “out of the radar”. None of them is a government plot or conspiracy. It´s simpler: your father in law dies in the retirement home within 2-3 days out of a respiratory complication and your first thought is not to ask that he is tested and let the rumor spread on your network. You want closure fast and you keep the doubt for yourself “in your four walls”. You don´t want your family to be stigmatised as careless or your beloved as a plague spreader. We have a specific word for it “Untore”.

    https://it.wikipedia.org/wiki/Untore

    It´s a term deeply entrenched in the Italian culture that was popularised in the first and most famous novel in Italian language. There´s not an Italian who hasn´t spent at least 6 months reading and studying that novel. My grandma who only went to school for 5 years knew entire chapters by heart.

    So back to the numbers.

    The newspaper empirical death count (only Bergamo residents 122k) shows a spike in march 2020 (on the 25th of march) of 457 deaths, 342 additional more deaths than the average 115 deaths in the previous 2019,2018,2017 Marches. It is 0.3% of the residents. This is a bottom line assuming all the Bergamasque were already infected.
    This projected to Italy would make 170k deaths and in the Netherlands 50k.

    Now, will you bet with me 500 Euros that in 2020 the Netherlands will register an additional number of deaths below 70k compared to the average of the previous 3 years?

  2. The normal influenza has its peak the first weeks of Feb. (week 4-8) of the year. Both IT and the NL already had their peaks and likely 75% of the correlated deaths.
    NL https://www.rivm.nl/bibliotheek/rapporten/2019-0079.pdf
    IT https://old.iss.it/site/RMI/influnet/pagine/rapportoInflunet.aspx
    Deaths in the next days will add to this death count…not replace it.
    But the biggest mistake you may be incurring is believing that Italians are exaggerating the number of deaths including people who falls from the bicycle out of distraction by the coronavirus ordeal.
    The opposite is likelier true and there is proof everyone can verify. Deaths have been unreported at 1 to 4 minimum.
    The Eco Of Bergamo is the newspaper that first noticed a chilling discrepancy between official deaths “with” Coronavirus and number of people who is really dying.

    https://www.ecodibergamo.it/stories/bergamo-citta/a-bergamo-decessi-4-volte-oltre-la-medialeco-lancia-unindagine-nei-comuni_1346651_11/

    The Eco is where families in the Bergamo province publishes their obituaries. They do them, funerary services do them for them etc. You can verify it yourself in the digital PDF archive. They have Name and Surnames of real persons. There´s no incentive for their family to lie. You would be surprised how many old people read them to see who died today among their friends. There´s no other way for them to know.

    There are multiple reasons why people are dying “out of the radar”. None of them is a government plot or conspiracy. It´s simpler: your father in law dies in the retirement home within 2-3 days out of a respiratory complication and your first thought is not to ask that he is tested and let the rumor spread on your network. You want closure fast and you keep the doubt for yourself “in your four walls”. You don´t want your family to be stigmatised as careless or your beloved as a plague spreader. We have a specific word for it “Untore”.

    https://it.wikipedia.org/wiki/Untore

    It´s a term deeply entrenched in the Italian culture that was popularised in the first and most famous novel in Italian language. There´s not an Italian who hasn´t spent at least 6 months reading and studying that novel. My grandma who only went to school for 5 years knew entire chapters by heart.

    So back to the numbers.

    The newspaper empirical death count (only Bergamo residents 122k) shows a spike in march 2020 (on the 25th of march) of 457 deaths, 342 additional more deaths than the average 115 deaths in the previous 2019,2018,2017 Marches. It is 0.3% of the residents. This is a bottom line assuming all the Bergamasque were already infected.
    This projected to Italy would make 170k deaths and in the Netherlands 50k.

    Now, will you bet with me 500 Euros that in 2020 the Netherlands will register an additional number of deaths below 70k compared to the average of the previous 3 years?

  3. You nailed this spot on… I’m telling my friends that this stupid lock down is killing us faster than the flu. All those decisions are made by politicians who will never be forced to pay the bill, but the rest of us will. Thousands of companies send their employees on social welfare (they get 75% of the income), but all the jobs paid by the state are maintained and paid in full. It appears that we’re all equal but some are more equal than others. They try to protect themselves, as a burdened health-care system underlines the poor state of it, the lack of investments and ultimately, corruption.
    Yes,buying stocks is a no brainer, but of course the bottom is hard to predict, but fortunately is also not necessary, because buying them in steps can offer you a nice average price.
    I’ll bet anybody that buying now a basket of 10 good stocks will double their money in less than three years.

    • Essentially you could look at this as a peculiar new form of class warfare: It’s the middle class waging war against the working class. The people who work for the government and academia and get a salary can pay their mortgages. The people who are self-employed or work for small businesses, they’re the ones who now suddenly find themselves facing unemployment.

      They could theoretically keep this going for as long as they have to, provided it remains unclear how many people actually have antibodies to this virus.

  4. Come back on the last day of may and tell us about the death numbers and if they matched your expectations. What exactly are your expectations?

    Yes this is an opportunity for making $$$$, but it is still going to kill more than JuSt tHe fLu bRoH

  5. I don’t think you are wrong about this. Your methods are suboptimal but that’s not my problem. You’re clever and you might figure the solution out, you might even keep it too, at least if you ever control your borderline-like habit of reinventing yourself every 72 hours.

    What’s hilarious is how uncomfortable normal fucktards are with not knowing, but only when the crisis has already begun. Prior to the crisis they were sleepwalkers and didn’t give a damn how anything worked or what guaranteed their survival. Now, they are Google experts on everything even remotely related to the fate of mankind. I see people in internet chats, people with no aviation experience, splitting hairs over FAA regulations they just looked up yesterday, to try to understand how it will affect air travel and their stocks. They cannot live without knowing, but only after the crisis started, prior to this they were perfectly fine with complacency. They were perfectly happy not knowing where their food came from or how their electricity worked, and now suddenly they’re Captain Give-A-Shit. Outstanding.

    Rambling: buttcoin is positively correlated with the stock market, because despite being built to allegedly be long term resilient wealth storage, the people buying and trading it see it as a speculative high risk/high reward asset, so the second things get sketchy they cash out and flee for perceivedly safer assets. Money flowed out of bitcoin (and IPOs, and small cap, and nasdaq, and equities generally) and into “safe” shit like long term US treasuries and physical gold. That is the relationship there, some nerd actually took data and found a >50% correlation between btc/S&P500. It’s on google somewhere.

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