rebalancing
2022-10-01
From B's point of view, it becomes "A went profit-taking because A went up in price. The same phenomenon can be seen from A's point of view: "B dropped to half price, so I bought more (averaging). We tend to think of exchange (e.g., foreign) from our own country's perspective, but I don't think it is appropriate to take a one-sided view of the market, since people with different perspectives participate in it.
The act of rebalancing after an imbalance always results in "selling what has become expensive and buying what has become cheap.
- [I did [Selling the dollar and buying the yen at a time when the yen is weakening and the dollar is appreciating at a time when there is a lot of noise. Being on the wrong side of (e.g. an attack).
- There's no point in arguing here, time will prove it.
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When "A or B doubles, and we don't know which one it will be."
- Having two credits of one X is a "it's either two credits or four credits" bet from the perspective of current value.
- On the other hand, if you have one unit of both, then "it will be 3 units" and there is no bet. In other words, risk is gone.
Holding all assets in yen corresponds to the former.
- If you want to explain how a weaker yen increases the price of iPhones, you need more than just A and B. You need product C.
- A commodity whose production costs are paid exclusively in A will increase in price when A doubles.
- So let's just identify with A, shall we? For those whose consumption consists solely of yen-denominated costs, there is zero risk of buying any dollars at all.
- It could have happened in the Edo period or something.
- It's not easy in this day and age.
- Burning imported fuel to generate thermal power and using that electricity to run TVs that contain large amounts of chips made overseas to watch Netflix and YouTube Premium.
- I wonder if the minimum risk is to have dollar-denominated assets in a proportion equivalent to the proportion of costs paid in dollars in consumption.
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