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This is what they call a Stick-save

By August 24, 2010 February 27th, 2017 4 Comments

I have gone on record here and here to rotate out of stocks and bonds and into domains and websites.  I am sticking to this call.  In fact, today was what traders call a “stick save”, i.e. where we narrowly avoided busting through 10,000 on the Dow to the downside.

stick save

One pundit has called the job of the fed walking on a tightrope in a hurricane.  Indeed.  Hyperinflation risk is one thing that I think is becoming a legitimate topic of conversation. For calibration, the Dow-Gold ratio has historically been as low as 1.0. We could see it again. Not kidding.  Run the math on that one for a moment and you will see the implied volatility associated with being on the wrong side of the inflation-deflation debate as policymakers run out of choices without consequences.

Here a brief primer on “Stick Save” for the uninitiated:

As for me, since I don’t have a ton of confidence in the stick-save as a strategy, I am sticking with domains and websites as a portable store of value that can preserve wealth.  Ask your investment advisor if he has a better idea. I don’t.

Join the discussion 4 Comments

  • CW says:

    Retail investors are fleeing the stock market, Bernanke is printing Federal Reserve Notes like crazy, the private home mortgage market is cratering, distress withdrawals from 401K’s are at an all time high, the commercial real estate market is bleeding like a zombie, Congress wants to raise taxes, we are at Depression Era levels of unemployment, and I’m still surrounded by people who think the economy is looking up!

    I think it’s okay though. These are the people who “invest” in American Idol, The View, and Lottery Tickets.

    Leaves plenty of domains and online opportunities for the rest of us.

  • Kostov says:

    Look for S&P to retest 940 and likely linger there for some time. It’s enough to think about deflation in order to cause deflation. Bernanke knows this but unfortunately it’s too late, the Fed was behind the curve as of last year. Housing is on a downtrend again and will continue to do so for the foreseeable future.

    Washington legislature will likely harm small business which accounts for 70+% of employment. Can’t get out of this without employment. Continue to infuse uncertainty into business owners w/healthcare changes, higher taxes, 2,500 page bills, that = unemployment.

    Raising taxes is like drinking salt water, it’s not even a temporary fix. Best case govt will raise as much as $65 B. Compare that to cost overruns in wars, discretionary spending, medicare, etc. If you tax “the rich”, you’ll kill the economy since 2/3 of economy is service oriented and 70% of service spending is done by “the rich”.

    Ni hao, anyone?

    Compared to other asset classes, domains may statistically offer great protection and cash flow.

    • Rob Monster says:

      What matters most to me is that domains as asset class are (1) relatively non-correlated, and (2) can be directly owned. At some point, I fully expect we’ll see difficulties with mutual fund redemptions. I experienced this first hand in 2008 when hedge funds held on to redemptions for as long as they possibly could. The structural issues of 2008 are substantially the same now as they were then. This time the liquidity drug may kill the patient.

  • Louise says:

    Illegal immigrants aren’t the problem they’re made out to be. A much bigger threat to the economy and to security, is corporate profits which immigrate to the Caymans, and I intend to compose a letter to Obama, the Justice Department, and the Tax Reserve to move on an initiation to bring hidden assets back to the States where they belong.

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