Crypto Investors, Rejoice: You Don’t Need a PhD to Outperform Wall Street

Forget complex derivatives and hedge fund algorithms—sometimes a candlestick chart and diamond hands are all you need.

Why overcomplicate it? While traditional finance gatekeepers obsess over ’alpha generation,’ retail crypto traders are flipping 10x gains with basic TA and meme-fueled conviction.

The dirty secret? Half these Ivy League portfolio managers still can’t explain proof-of-work. Meanwhile, DeFi degens are farming yields that make their ’optimized’ 6% returns look like a checking account.

Next time some suit scoffs at your ’unsophisticated’ strategy, remind them: BTC has outperformed every asset class for 12 years running—no FINRA license required.

It’s reassuring that stocks are back to where they were before “Liberation Day,” but that doesn’t mean nothing’s happened. Per Torsten Slok, earnings estimates are significantly lower, which means stocks are significantly more expensive. 

Stock market vs. betting market:

Polymarket odds suggest a US recession is still slightly more likely than not, but BCA Research estimates that the stock market is pricing in just a 25% probability now.

Economists are pricing in stagflation:

Torsten Slok notes that rising inflation and falling GDP estimates indicate that stagflation is coming. At the FOMC presser this week, Fed Chair Jerome Powell seemed to agree: “If the large increases in tariffs that have been announced are sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth and an increase in unemployment.”

It might get worse than that:

Analysts at Goldman Sachs estimate that tariffs will raise inflation by a whopping 2.25%.

Trade policy is less uncertain, I guess:

Markets are said to hate uncertainty, and despite all the contradictory headlines, the Trade Policy Uncertainty index is down — so maybe that’s why stocks are up?

Actual trade is down, too:

Container bookings from China to the US are down 49% year over year. President TRUMP said that’s a good thing because no trading means “we lose less money.” But he appears to want some level of trade with China — he posted this morning that the current 145% tariff rate could fall to 80% and suggested that he’s leaving it up to Treasury Secretary Scott Bessent to negotiate a deal when he meets with China this weekend in Switzerland.

Trading with China has been good for us:

Jason Furman notes that US wages grew faster in the 24 years after China joined the WTO (the orange bars) than in the 24 years before (the blue lines). Most surprisingly, wage growth has been far more equitable in those two decades of globalization than they were before.

Trading with China has been good for us (2):

Jeremy Horpedahl digs a little deeper and finds that the real (i.e., inflation adjusted) earnings for high school graduates without a college degree are higher than they have been in at least 50 years (and I’m guessing probably ever, but the Fed data doesn’t go back any further than that). It seems to be getting even better, too: The Wall Street Journal this week reported about a high school junior who’s received an annual $70,000 job offer because his school offers welding classes.

Companies are still buying:

The FT reports that US companies are on track to buy over $1 trillion of their own stocks this year.

Retail investors are still buying:

Data from Bank of America shows that its private clients enthusiastically bought the tariff dip in equities. 

Warren Buffett WOULD applaud their long-term optimism, if not their short-term timing. 

Have a great weekend, long-term readers.

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