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On Brilliance and Consolidation

In any field, brilliant maneuvers are remembered and celebrated. But brilliant maneuvers without consolidation amounts to nothing long-term except the empty glory.

We could look at military commanders for an example. There's been some in history that have shown remarkable amounts of brilliance in pioneering tactics and doing crazy maneuvers. These sorts of things go into the history books, like Hannibal Barca's actions or Napoleon Bonaparte's.

Despite Barca and Bonaparte being remembered for their brilliance, it's worth remembering that neither of them won in the end.

We've talked about over-expansiveness in the past and not trusting your successors/family to keep up with your work, which is a common flaw that afflicts low born creators and leaders. Today, I want to look at something a little bit different - on brilliant actions and consolidating actions.

One time, when Hannibal's troops were pinned down by the Romans and it looked like all would be lost, he came up with a brilliant scheme. He waited until nightfall, and then took all of the oxen in his camp, tied branches and tinder to their horns, and lit them on fire and drove them off.

Macro rotation in financial and economic activity: Where is the opportunity?

On Ideas in the Making

US markets delivered truly outstanding, amazing results last year. On average there was no better place to be invested, optimism reached new highs and everyone is convinced a recovery is in play, even though for some reason or another people still talk about how times are tough.

Those who own stocks have seen their assets go up incredibly from the insane market bottom that was 2009. 2011 saw another pullback and now 2013 has been crazy. But the question is, can the US continue to deliver such outstanding returns on investments? or even a better question is, was the insane returns justifiable? The US economy isn't substantially better, and defintely not 30% better, and the outlook is still somewhat hazy. Although most people would agree a modicum of a recovery is happening, real wages, unemployment and the like continue to improve rather slowly.

From a technical standpoint, US markets haven't touched their 200 DMA average in around 400 days, and haven't been below it for any significant amount of time since 2011. The markets experienced a pullback last few weeks, but have quickly readjusted. the question is will this adjustment go through? how far will we go? Noone knows the answers to this question, but in my opinion, a macro rotation is at play.

What do I mean by macro-rotation? I mean I a long term money flow cycle is slowly changing, and it will effect just about every kind of money flow imaginable. Bonds, equities, commodities, emerging markets etc.

It all starts with the falling of U.S. Hegemony. Last year We saw the number one indicator of the U.S. hegemony take on a massive reversal, that is the 10 year treasury yield began to break out of long-term decline. it is uncertain if the breakout will continue, but one thing is for sure, demand for U.S. treasuries is beginning to wane. At the same time, The US dollar index has also began to wane, even though there has been an insane amount of money tied up in he U.S. dollar the past couple of years as the dust settles around the world and investors consolidate.

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