The Investment Thread

Saintaholic said
Yeah playing puts is tough to gauge in this zone. You sense it’s getting close to a bottom, but it feels like the same was said two months ago. 😅

Oh, I still think we are closer to the top than the bottom if the economy starts to contract before inflation comes down. At that point a full out deep recession and one that is long lasting without fed intervention will become truth instead of fear. Let GDP slide a little, a few companies start reporting profits getting beat up by inflation and then a few more companies start laying off people to try and bring costs down.

At the same time, if the fed tightening starts to bring down inflation and China recovers from Covid taking stress off the supply chain then betting against the US consumer is dumb and will end badly. We are just at a crossroads. Usually I like crossroads but this one will play out in slow motion so it really doesn't have a timeline that I can straddle. I'll find other plays in the coming days but they'll be much less macro.

I've still got my calls in ERJ and keep adding every time the market beats them up. Grabbed some AAL calls again yesterday. Picked up Netflix again yesterday afternoon but dumped them this morning in premarket after hearing the inflation numbers. Netflix is so cheap right now but not if revenue is shrinking while inflation is soaring. Was really hoping CPI would come in around 7.7% signaling a peak that has passed. Instead we got indicators of a plateau and 8% isn't sustainable very long.