Today’s Letter is brought to you by Bitizenship ! You can now access Italy’s Investor Visa with a €250K equity investment into Bitizenship Italia, a Milan-based Bitcoin startup. Visa approval arrives first, investment happens only after authorization. The company operates with a Bitcoin-aligned treasury, non-custodial L2 staking, and clear redemption windows every 24 months. To date, Bitizenship has facilitated €25M+ in Bitcoin-aligned residency investments. A compliant, Bitcoin-native pathway into one of Europe’s strongest economies. Private placements now open. To investors, Baron Rothschild once said “the time to buy is when there’s blood in the streets.” And we saw nothing but blood yesterday across financial markets. The S&P was down 1.5%, Nasdaq fell almost 2.5%, and bitcoin was down about 5% over the last 24 hours. Those are big numbers for these assets to fall in a single trading period. Interestingly, the S&P 500 actually displayed some very rare price action yesterday. The Market Stats writes “S&P gapped up more than +1.5% today, then closed down more than -1.5%. Before today, this only happened in October 2008 and April 2025.” As I recently heard Chris Burniske say, this roller coaster goes both ways. And the index showed us that yesterday, but now we are left to wonder why we are experiencing such abnormal volatility? Alex Kruger explains that we had “Extreme price action [yesterday], equities selling off on extraordinary volume and no news. VIX up to 28.” You don’t see that often. No specific catalyst, especially not an obvious, catastrophic one, yet stocks are falling materially in a single day. But this volatility makes sense when you realize the Fear and Greed Index was sitting at 6 last night. I don’t know if I have ever seen the index that low. Investors are scared. That is easy to recognize. But what are they scared of? That is a much harder question to answer. Is it the weak labor market data? Could it be the worries about AI CAPEX spending? Or maybe it is the belief that inflation is higher and the Fed won’t cut in December? No one knows. None of those things strike me as a reason for the S&P to drop 1.5% in a day and the Nasdaq to lose 2.5% in the same timeframe. But here is the thing, regardless of whether we have a specific reason, Rothschild told us to buy when blood in the streets. So how exactly do you do it? Famed investor Howard Marks explained his philosophy in a 2018 interview at Wharton: “My vision is that when the stuff hits the fan and there’s blood in the streets most people…say well we’re not going to buy until the knife stops falling, until the dust settles, until all the uncertainty has been resolved. But the trouble is that once that happens then the price will have rebounded. So we want to buy at a time of upset and while the knife is still falling and I think the refusal to catch a falling knife is a rationalization for inaction. It’s our job to catch falling knives, That’s how you get bargains. But you have to do it carefully.” Most people try to avoid catching the falling knife, but Howard Marks realizes that is not possible. This is the type of alpha you get from someone who has built one of the best investing careers in history. Straight contrarian takes that create billions of dollars in profit. You have to realize that Marks and Oaktree were always willing to buy assets on the way down, keep dollar-cost averaging lower, and then continue buying on the other side of the recovery. This type of conviction during a moment of chaos can only be built through strong analysis that highlights how undervalued an asset is. Most people aren’t built to be greedy when others are fearful. So where do we go from here? The short answer is that no one knows. Carson Group’s Ryan Detrick pointed out earlier this week that the stock market very rarely peaks in the month of October, so history would suggest the bull market is not over yet. If the historical trend was wrong, this would only be the 7th time since 1950 that the market peaked in the month of October. Never say never though. Just when you think you have financial markets figured out, something will happen to make you question everything again. That is the beauty of investing. It is an intellectually stimulating game because the puzzle never ends. Now before I let you go, I am going to leave you with two charts from Ryan Detrick that will leave you a little more optimistic. The first is that the performance of the stock market on Thursdays has recently been horrible, so yesterday’s big drop is less surprising when you realize the intra-week cyclicality at play. In addition, Detrick points out “November historically bottoms on November 20th before the seasonal late month rally. What is more interesting is one the weaker parts of the year is Nov 18-20. Looks to have played out this year, now will the rally?” So yesterday was a blood bath in markets. The seasonality data suggests we could have the worst behind us. But no one
