A Macroeconomic Approach to Analyzing Volatile Markets (Pt. 1)

Based on this discussion and comparative analysis, Tesla is primed for growth based off of their historical track record of growth but also because of the magnificent scale that they are close to achieving, as evident in recent financials. Twitter, on the other hand, is likely not going to be very relevant soon unless Elon is truly able to take it over and completely revitalize it. Their financials have been bad and are only getting worse. Something significantly bringing down their projections, for example, is an unusual “Litigations Settlement” cost of over $765M in 2021.

As we look towards the future, we encourage anybody and everybody to play around with our models, attempt to run some of their own numbers for companies they are interested in, change with the numbers, and get back to us on any feedback that you may have.

In Conclusion…

Unprecedented actions by the Fed to stop an economic standstill flooded all sorts of money markets with capital and created a massive slue of financial derivatives in the form of NFTs, SPACs, 100x revenue multiple public companies, lots of debt, and much more… which is now leading to massive drawdowns in all of those markets, as well as even more sturdy markets as well. This is A. because all sorts of people and organizations were over-levered (and likely less liquid than they usually are) and B. inflation + lack of production + supply chain difficulties are starting to have a bigger and bigger impact on more and more people’s everyday lives.

But everybody knows and is observing this, the important question is, is the dollar okay? What happens from here? Is what the Fed doing now enough? Or too much again? This time in the wrong direction.

The good news is the dollar is still doing decently well on the global stage. After looking at current, 5-year, and maximum dollar value relative to other major currencies like the Yuan, Euro, and even Ruble, however, it’s safe to say that at least in the short term, other than foreign countries starting to make oil deals in currencies other than dollars, the dollar is fine. I believe we can get out of the mess we have gotten ourselves into if we handle it properly.

The comfort is that at least if our currency has become devalued by extraneous inflation, the rest of the world is right there next to us for similar reasons. The scary part in that if not properly handled by economists and global leaders, even worse inflation on a global scale could be on the horizon. Hyperinflation is no joke, but even moderate inflation means hardship for families, changes in lifestyles globally, less travel, less production, even less education, and much more.

Inflation isn’t bad if productivity can catch up with it. The bad news is that between Covid, massive changes in work ethic across generations, and perhaps an immigration policy that lacks sophistication across political parties, production in American is not necessarily on the rise like it has been in the past.

Another problem is that the Fed was certainly late to raising interest rates, but now they are raising them faster than they have in 20 years at a time when CPI is still increasing, but at a slowing rate for the first time in the last two years.  

It’s hard to say exactly what will come from this, but we unfortunately think it is going to get at least a bit worse before it gets better, as discussed further in the “Specific Equities’ Market Caps” section.

We hope in the long-term, however, that this crash will weed out the fakers, those just doing the bare minimum to get by and those that are there for the hype, in all industries but especially in ours. We hope that it will leave the best, brightest, and most passionate.

Hopefully more creatives, producers, creators, inventors, artists, and geniuses come to light to share their beautiful products, services, and work with the world.

Hopefully we can learn how to work together to solve problems.

At Black Mountain, we aim to be the voice of a generation of positive collaborators, those who give more than they take and work to propel the world and humanity in a positive direction.

Thank you for taking the time to read this, we hope you enjoyed and found it helpful. If you did, we’d greatly appreciate it if you could share with friends, family, co-workers, etc.

Wishing you well!

All the best,

The Black Mountain Team