Do The Hard Trade

If there are two trades that exemplify a state of the world that is most anathema to the Cartoon we live in, it’s owning bitcoin or bonds. Maybe it’s because they are both ponzi schemes. As a value/commodity guy with a compass formed through years of practicing the principles of Value, I have watch my foundational beliefs steadily erode over the past two decades under the tightening grip of Positioning and Flow whose study seems to hold no purpose other than frontrunning non-economic, mechanical, or uninformed buyers or sellers, all while enabling and encouraging unrestrained gambling in the broader populace. Ponzinomics are a reflection of this transition, and as someone with four children and bills to pay, I learned a long time ago that I don’t have the luxury of principles. Financial justice warriors (as my pal Chase Taylor calls them) — they go broke. Still, it is hard to abandon a compass, just as it is hard to abandon a bearish bias when your career began with the dotcom bear and was forged in the fires of the global financial crisis.

I preface all this to say that this trade does not come easily to me. Actually I feel like an alcoholic walking into AA:

Me: My name is Paulo, and I bought bonds this morning.

Sponsor: Brave of you to be here, thank you for sharing [applause].

Back on July 8th, I faced a similar situation with bitcoin which I laid out in Ramblings & Ruminations: Mid-Year 2026 Overview in the New Trade section:

“I really did not want to share this. As mentioned at the top, it makes me want to throw up. But just so people can’t accuse me of being 100% oil/commodities or bearish risk all the time, here goes:

I started buying bitcoin upside on Monday.

I know. I can’t believe these words. Look — it’s a trade…Please read that twice. Let me be clear: this is a trade and sized as such. Bitcoin is still an accident waiting to happen as Saylor’s “bitcoin physics” unwind will be pretty epic and a chapter in its own right. But for now — for now — I’m long.

A buddy used to say “do the hard trade” and let me tell you, this trade felt really hard putting it on.

Now read this more than once: I would not listen to me, and this was not — NOT — financial advice.

I have spent the past four years — since before Substack was even a thing when I was more active on Twitter — as Mr. EMification… Mr. “We Are Speaking Portuguese And Don’t Even Realize It”…and as someone who has a general rule never to trade against the primary trend, going long bonds here would seem to break every rule down to my core being. Still… I am long bonds as of this morning.

The rationale is simple.