As an investor, when searching for direction in a volatile market, a useful heuristic to use is what traders lovingly referred to as “The Pain Trade” indicator. This indicator was described to me originally in 2007 by a New York Wall Street stockbroker this way, “The market will move in the direction to hurt the maximum number of people.” While everyone’s definition of the “Pain Trade” varies, they all address the tendency of markets to deliver the maximum amount of punishment to the larger consensus. This is especially true when the underlying asset is a high-profile asset such as shares of Apple, or in this case, Bitcoin. High profile public “pain” is especially more painful than low profile private “pain” and the market reacts accordingly.
At Sarson Funds, Bitcoin’s current rally and its refusal to settle is a great example of the “Pain Trade” principle in action. Thanks to the continuing and sustained efforts of industry leaders like Fidelity, Goldman Sachs, BlackRock, Intercontinental Group, CME, JP Morgan and others, Bitcoin is being normalized into existing financial frameworks and investors are getting caught flat-footed. When will the rally stop? According to the “Pain Trade” indicator, not until a drop in price delivers an aggregate punishment that is greater in total pain than what those uninvested in Bitcoin are currently experiencing.
Our investment products are built by advisors and sold through advisors.
We bring Wall Street standards for research, risk management, and transparency to digital asset investing so that you can safely incorporate cryptocurrency allocations into your clients’ investment portfolios. We offer white-labeled portfolios, client-focused educational pieces, and cryptocurrency regulatory insights. Our product lineup (fact cards enclosed) currently includes large and small coin cryptocurrency strategies and a large cap “covered call” cryptocurrency portfolio that offers floating monthly income in excess of 20% annualized at today’s implied volatility levels.
John Sarson
Managing Partner & CEO
Disclosures: Not investment advice. It should be assumed that Sarson Funds or its affiliated managers hold positions in all projects that are discussed. It is not possible to invest in any project directly through Sarson Funds, Inc. or its affiliated managers. Any investment product offered by managers affiliated with Sarson Funds should be assumed to be only available to Accredited Investors and subject to the individual terms and conditions of that offering including but not limited to those eligibility requirements associated with U.S. Securities Regulation D, section 506c. Talk with your financial advisor before making any investment decisions or have them contact Sarson Funds directly at [email protected]
