How do you do that?

and what are you reading?

I’ve gotten a few questions about how I write this blog. Questions have spanned from what resources do I use to how I derive insight from the information given and what I read to stay on top of the situation. I would say that there is nothing special about what I read or where I go to for information. I try to use publicly available information as much as possible and while I follow a few different websites, I do my own due diligence and provide sources for most of my material.

Starting with the resources I use, the top two are:

1. The FRED Economic Data from the St. Louis Fed

2. The Trading Economics Website’s Calendar

I have links to both of these on the main page of the website under the “Important Dates” section. The information they contain mostly overlaps. Using these two websites I am able to know what information is coming out and the results of previous data releases. Both provide graphs of the data. The FRED website allows more choices in how the data is presented. The Trading Economics Calendar posts the consensus estimates and forecasts of most of the data so you can see if any releases were a surprise. This is the primary source data that I use. Using these resources, I analyze the data to come up with what I believe is happening and will happen in the market.

The way I analyze the data has been shaped by the many books that I have read about the stock market and those who operate in it. I would divide these books into three sections:

1. Understanding those who operate in the market

2. Austrian economics

3. Understanding behavioral patterns in market participants

Understanding those who operate in the market incorporates a wide variety of books. My parents kick-started my fascination with the stock market with the book “The Intelligent Investor”. This is one of many guide books on value investing and how investors perceive value in the market. I followed this up with “Margin of Safety” (do not buy this on Amazon), “Common Stocks and Uncommon Profits”, as well as the many “Market Wizard” books by Jack Schwager.

I’ve also read a couple of Peter Lynch’s books, “Reminiscences of a Stock Operator”, Norman Fosback’s “Stock Market Logic”, and Gerald Loeb’s “The Battle for Stock Market Profits”. I feel these books give me a better understanding of the other participants in the market and how they view the market.

For those that followed Robert Wenzel, understanding Austrian economics was at the heart of how Robert applied analysis to the data. The absolute best resource for a better grasp of Austrian economics is the Mises Institute. They have full pdfs of books, as well as, articles, podcasts, and videos. Its hard to list the vast collection that I have read here. Some high points would be; Rothbard’s “America’s Great Depression”, Hazlitt’s “Economics in One Lesson”, Robert Wenzel’s “Austrian School Business Cycle Theory”, Hayek’s “Road to Serfdom”, and Mises “Theory of Money and Credit”. I’m a firm believer in the understanding that the Austrian perspective provides.

All people are susceptible to certain behavioral patterns. This was exposed to me in Michael Lewis’s book “The Undoing Project”. I followed Lewis’s book with Daniel Kahneman’s “Thinking Fast and Slow”. I’ve also read Richard Thaler’s “Misbehaving”. These books have helped shape my mind to look for certain signs and signals that confirm where the investing herd might be going. They have also improved my ability to not fall into certain “traps” that you mind presents you. A great example of this is my determination to cut my losses early (7-8% from purchase price) and set stop-loss targets. I’ve come to understand that my biggest losses happen when I get paralyzed by big red numbers. My mind immediately thinks two things. First, the market is wrong and second, I’ll get this money back if I’m patient enough. The first reaction has truth and falseness embedded in it. Yes the market can be wrong at times, but it can be wrong way longer than you can be solvent. This leads to the patience part. Yes, many times things could turn around but sometimes they won’t. Also, while you are waiting on a turn-around, your money could have been pulled out and put to work in a better cost-benefit scenario.

Finally, I would be remiss if I didn’t mention the many blogs that I follow. Each has it’s advantages and disadvantages. There is no one blog that is infallible (including this one). Some of the blogs that I follow have gone behind paywalls. I want to show respect to those authors who were able to make that transition. For this reason I try to give credit when possible. I don’t like the idea that I could be giving away their insights for free on my blog. With that said, in no particular order, here’s the list:

1. Doomberg - recently went behind a paywall. They have great in-depth analysis and well thought-out articles.

2. Gregory Mannarino - Greg “gets” the market and the end-game. The content of his videos is good but can get repetitive. He does a great job with his Mannarino Market Risk Indicator.

3. LiveBetterNow - David was a follower of Robert Wenzel and runs through a diverse array of topics on his blog. He has a paywall.

4. Macro Ops Musings - I don’t follow their stock pick analysis but I do enjoy their articles that focus on the mental aspect of the market. I would say it is similar to those books that I read to better understand other market participants.

5. MacroTourist - I have followed Kevin for a long time (since before he was on substack!). I don’t pay for his content and always feel I should bite the bullet and subscribe. He’s got a great insight into the market after being a pro on a desk at a big bank for many years.

6. Mish Talk - I have followed Mish for longer than anyone else on this list. He’s changed websites 3+ times and yet I still find him. He’s a registered investment adviser with a slant towards Austrian Economics.

7. Capitalist Exploits & Adventures in Capitalism - These websites are both written with a similar outlook. They both offer paid content but I only read the free sections. They are updated sporadically.

8. Zerohedge - This is a blog for perma-bears. It is updated multiple times a day and I never read all the articles. You need to see through the bearish slant to get a good grasp of what is going on. These guys are usually on the cutting edge of the news. They have a paywall for a portion of their site but I do not use it.

9. WallStreetBets - You will never find a more wretched hive of gambling addicts and the memes they make. This place is notorious for users making yacht-fuls of money and also losing epic amounts of capital. It has good content on rare occasions. I like the BigBear0083’s posts about this week’s earnings reports. This is where I got my first taste of options trading.

I hope this provided more insight into where I get my data and what shapes my views of it. I’m always on the lookout for investment related blogs and books. If you have any recommendations, I would love to check them out. On the book front, I’m just starting to read Martin Zweig’s “Winning on Wall Street”. After that I’ve got “Liar’s Poker” by Michael Lewis lined up.