Love the economic and financial analysis, but have to admit I find Lambo theory puzzling. Suppose the dealer opens door three, and you find the turd. You haven’t yet made a selection. The the probabilities of finding the Lambo behind door 1 versus door 2 are clearly 50/50. So how does initial selection of door 1, without actually opening the door, skew the probabilities?
Fantastic article! So detailed and insightful—bravo! I just have one question: the YTD return of the broader market is already over 7%. I also strongly agree that the odds of this being a bull market have increased significantly. But if it is a bull market, why do you believe the market will post double-digit gains this year, rather than something under 10%? After all, valuations aren't exactly cheap right now.
Seems like crypto is telling us risk on. Especially with eth, Solana and xrp trying to break out. Too much liquidity out there for anything but -5% correction, which will be bought.
Love the economic and financial analysis, but have to admit I find Lambo theory puzzling. Suppose the dealer opens door three, and you find the turd. You haven’t yet made a selection. The the probabilities of finding the Lambo behind door 1 versus door 2 are clearly 50/50. So how does initial selection of door 1, without actually opening the door, skew the probabilities?
It’s not 50/50.
Look up the Monty Hall problem.
https://x.com/grok/status/1946944301411553679?s=46&t=eAa1BFs1WqbMTUEUP_FBnQ
David, isn’t the conditional probability 50% of a bull market not 2/3? The 2/3 arises from the ability to switch doors. What are we switching here?
https://en.m.wikipedia.org/wiki/Monty_Hall_problem?inf_contact_key=5f126af76dcb69b0f0685cce6c76bb66
First
Seek help. 😂
Fantastic article! So detailed and insightful—bravo! I just have one question: the YTD return of the broader market is already over 7%. I also strongly agree that the odds of this being a bull market have increased significantly. But if it is a bull market, why do you believe the market will post double-digit gains this year, rather than something under 10%? After all, valuations aren't exactly cheap right now.
Compelling way to framework the situation. And a little stats refresher to boot!
Seems like crypto is telling us risk on. Especially with eth, Solana and xrp trying to break out. Too much liquidity out there for anything but -5% correction, which will be bought.
For anyone like me that skips the articles and just hones in on one word to dictate how they’ll position their portfolio: “fetish”