Practical considerations: new construction will cost lots more and people will have less value in their savings to buy or secure loans with. My WAG is period of people staying put as much as possible.
Which industries will be less affected? I was thinking healthcare but not for hospitals it seems. Shortages and increased expense of all supplies and most medicines will be in the future. And their charges are already baked in by contract.
Entertainment? Will there be a backlash internationally at American origin movies? Will people feel that a night out at the movies is the extra expense they can avoid for now?
Many typical counter cyclical stocks are not safe this time. Think Dollar General and Walmart. The cheap stuff there is suddenly not cheap!
Within equity any sectors that seem less likely to be hit as bad?
The European and Asian markets crashed in anticipation of the US committing economic suicide, but apparently the US market has decided otherwise.
What a bonkers day.
I’m down 3%. Mostly, weirdly enough, on gold. Everything else is doing okay except gold, where I own a bunch and put down a substantial call this week. You’d think in this absolutely insane market people would be flocking to gold, but not yet. Definitely a good time to buy gold I think, if anyone wants some. I don’t see it being this cheap in a while.
My put lasts until Friday so I’m hoping we see it rebound by then but who knows.
Serious question from a financial newbie: If a fluctuation comes and goes that quickly, did it actually happen, for all practical purposes? Wouldn’t an end result be the only useful info? Hopefully you get what I’m asking.
If you are able to buy and sell in real time (as many financial professionals and their computers can) , those fluctuations can be monetized. For a huge profit on a percentage gain over time basis. So they are 100% real.
If instead you bought a week ago and will sell a week from now, then as you suggest, those minute-to-minute fluctuations are perfectly real, but also perfectly immaterial.
The larger point is that that level of extreme short-run price turbulence is generally unprecedented. Which says that something very odd and very novel is happening in the financial markets as a whole.
It’s a bad thing when the ground underneath your whole economy is suddenly vibrating continuously and intermittently shaking violently. Any moment the first lava will appear from a crack someplace.
Not in my mind. Profit and losses are fictive, “paper”, until the sale is made.
“Paper” vs “real” is the usual phrasing, but currently this unreal market seems more like quantum foam that has to interact with something real to collapse its waveform!
Today was absolutely bonkers. Apparently some random twitter account reported that Trump was going to do a 90 day pause on tariffs and that alone sent the market surging literally 3 trillion dollars higher. Then Trump denied 20 minutes later and it crashed down 2 trillion. That is fucking insane. At that point you gotta wonder if it’s deliberate manipulation because it would be trivial to algorhythmically make tens of billions of dollars off that false surge. But there’s no SEC or any sort of law enforcement to investigate. Rich people cannot commit crimes in 2025… to an even more sure degree than usual.
It shows how desperate people are to surge on good news. They’re still in the denial stage thinking this is a Trump power move and he’ll call it all off any second now. Everyone is ready to massively surge if he does. Which means that the true bottom is nowhere near being priced in – people are pretty sure that this can’t happen, that we can’t do something this stupid, that there must be adults in the room to prevent this, and they’re going to be ready to buy the dip as soon as we see that happening.
But this is exactly the sort of “can’t happen here” delusion that has kept the public from seeing Trump for what he is this entire time. The shit he does is the sort of stuff that banana republics do. The sort of thing north korea does. That can’t possibly happen here, in the USA, right? No, that’s not the sort of thing that happens here. So it can’t really be that. It must be made up, or people are misinterpreting it. This line of logic has protected Trump from his own idiocy for 10 years now.
Trump shows no sign of wavering. He may even believe his own bullshit that the US is being ripped off and this is how to fix it. And there are no adults in the room to stop him, like there were with some of his worst impulses in his first term.
He’s threatening China with 50% higher tariffs which would basically completely end our trade with China. He’s doubling down on everything. As soon as people realize this is all real, and rather than waiting to buy the dip you go into saving your bacon grease mode like the depression, that’s when everything is going to drop massively. The tariffs start to take effect April 9, so that may be the day of the complete collapse.
I managed to end the day down mostly because I lost quite a bit on gold which was quite unexpected. Gold should be having quite a run in the current environment. I doubled my gold holdings because I think it’s as cheap as it’ll be.
I honestly think that there’ll be violence in the streets before the average modern American gets to this point. The worlds changed a lot since the 1920’s. I’m not saying it’ll be better or that the problems will take care of themselves; just that I don’t think you can look to then expecting it’ll happen just the same. Maybe it’ll be worse, but it’ll be different.
If there is a collapse, won’t those gold stock shares be worthless? Again, my lack of knowledge is showing here.
Though I may have to dip out of this thread. I’d been hoping for advice on how to deal with the coming uncertainty in regards to my finances, but mostly I’m finding an increase in reasons to think that overdosing on sleeping pills will become an attractive option in the near future…
Attitudinally I agree with you as a skilled veteran investor.
But from the POV of @Leaper, a total noob, it’s IMO important to distinguish between price changes being “real” versus “realized”. Those changes are not fake (although ref @SenorBeef maybe fakely driven). If someone did sell at any moment they really will get that price-of-the-moment. That’s what “real” means.
But they are (mostly) immaterial to your wealth until you sell and realize (“materialize”) the loss. So if you’re not selling any time e.g. today, the ructions of e.g. today remain just noise imposed on the signal of longer term price changes.
Fidelity has been bothering me to enroll in their Fully Paid Lending Program. Basically, it allows my shares to be loaned out to shorts, and I get interest on the shares. I understand how all that works.
What I can’t figure out is how risky it is. Fidelity isn’t very informative, saying only:
“Shares on loan are not covered under Securities Investor Protection Corporation (SIPC). However, Fidelity provides collateral at a minimum of 100% of the loan value. In any securities lending transaction, counterparty default is a risk.”
So it sounds like they’re saying “you’re fine, because we provide 100% collateral, but there is still risk of default by the borrower”
That doesn’t really help me quantify the risk, and seems self-contradictory. If Fidelity really provides 100% collateral, why would there be risk?
Anyone know more about how risky this is or isn’t?
The question (and I don’t have an answer!) is whether the current hysteria is ‘tactical’ (caused by Trump’s tariff nonsense, or ‘strategic’ (caused by some underlying systemic problem).
The 2008 crash was obviously the latter: worthless subprime mortgages had been hidden in many financial instruments, and it took a little while for the full enormity and scope of that to come to light.
Though to continue the military analogy, a sufficient number of tactical defeats can lose the war.
And we don’t know what more left-field insanity Trump may pull over the next few years…
I’m just glad that over the past two or three years I have moved about 50% of our assets into money market accounts. Just about all of the retirement accounts, and as much of the non–retirement funds as I could stomach paying capital gains to the taxman on.
Of course I’d be better placed if I’d just sold more appreciated non-retirement assets six months ago and eaten the capital gains tax… but my crystal ball wasn’t working so well…
My portfolio started the day down 15%, I went back to bed for a while, woke up to being slightly above even. Looks less crazy than it was yesterday, mostly just a steady downward trend.
Surprised gold is only slightly up. It looks like my 25 contract (~$5000) gold put isn’t going to make it. I was pretty confident in that one. Oh well.
It seems like now would be a great time for Tesla to crash, because those that were holding onto it for the cult/ego factor could blame their losses on the market crash, but alas it hasn’t hurt since Friday. That’s still by far my biggest position and at this point I think earnings can come out and say everything is terrible and the stock will only drop 5% and recover the next day. There’s either divine protection on that stock or something a little more mundane and corrupt.
I got this same offer a couple of months ago and I was trying to figure out the catch. I googled around and read some of the material and I couldn’t find it. It seems like whatever they allow you to loan out is collateralized by cash by them. I’m not sure under what circumstances you’d lose money. To me, it seems like free money. I actually just got my monthly loan report and made $120 from the loans – not exactly huge, but hey, free money is free money. I do trade in very volatile and actively traded stocks, though (the ones that got loaned most were EUAD and TSLZ) so I suspect most of the time with big, relatively stable stocks you aren’t going to be loaning them out very much. Just ones where there’s a lot of short interest.
It depends on what you mean by this. If you mean if the market crashes and everything loses value, won’t gold lose value too? And the answer to that is generally not. Gold isn’t generally an investment but rather a store of value – in theory, gold has roughly the same value it always has. So if a bar of gold buys a ton of wheat in 1990, it should still buy a ton of wheat in 2025. So if you think your currency is going to inflate and reduce your wealth, you can stick the money into gold where instead the value contained in that money should be more stable. In practice, sometimes it gains or loses value relative to cash over the years but it’s more stable than other sorts of assets in terms of wealth stored. That’s why gold tends to be more widely purchased in times of economic crisis.
If you mean like, if society completely collapses, owning shares in a gold ETF is not as valuable as owning actual physical gold coins, that’s true. Because the infrastructure may not exist for you to get the money out of it, or you may be restricted from doing so for some reason. But we’ve got to be in some pretty rough times (like 1920s Germany) for that to come into play. Though in time I do plan to convert some of that “paper gold” into real physical gold for the mad max times.
No idea. Holding stocks or ETFs is already risky enough for me.
I do not try to play with options etc… I don’t understand them well enough and there seems to be enough evidence that trying to time the market is not a win in the long term.
For every story about the guy who started with $1000 and made $10,000,000, there are thousands of not-told stories about the guy who started with $1000 and rapidly lost it…
Seems to me the answer to that question is quite obvious.
There is nothing “strategically” (in your terms) wrong with the market. Had Harris won, or trump had a revelation in December that tariffs were a terrible idea and disavowed the whole concept after his inauguration, the market would be cruising along quite nicely. Just as it did from before Nov 6 to Jan 19.
The issue is that the tariffs, and their follow-on consequences, will absolutely positively destroy the stock market’s valuation and maybe even usher in a Great Depression II without a competent US government to fix it. And that problem is 100% “tactical” in your terms.
So IMO there’s no debate: it’s “tactical”. Period.
The problem is also 100% caused personally by the toddler tyrant himself.
All the volatility is about “will he or won’t he?” reverse course before the ship hits enough rocks that enough holes are poked in the hull that a sinking becomes inevitable even if the idiocy is then reversed. He may or may not realize it, but right now he’s like the old joke about the arrogant ocean liner or aircraft carrier Captain playing chicken with an oncoming vessel that is actually a lighthouse. Oops.
We (IOW the US markets for sure and much of the rest of the world’s as well) are utterly incontrovertibly screwed if he remains in charge and the tariffs remain in place. If. Place your bets folks; the dice are a rollin’
I’m not trying to be snide, but what do you plan to do with it then? Do you think you will just be able to civilly barter your gold for a couple chickens, and both parties go happily on their way? Or do you think it more likely, if it comes to mad max times, roving bands of armed gangs will happily and mercilessly steal or destroy anything of value that others weaker than them have? In those instances, gold isn’t going to do you much good without some way to protect it. Guns, ammo, food, fuel, medicine and shelter are going to be much more important.
Today has been pretty stable. I guess we’re in a holding pattern waiting to answer the “is he really going to do this” question tomorrow.
We should really be down, though, given his threats to increase tariffs on China further, and China not backing down. As well as his refusals to accept no tariff deals from Vietnam and the EU. Those suggest to me that yes, this is really going to happen.
The question is, as we have discussed before: how robust is the global economy?
Are there enough negative feedbacks in the system to keep it working, or is it a house of cards that could collapse if some critical points fail?
They don’t call economics the “dismal science” for nothing: in fact I wouldn’t call it a science at all, since I don’t think anyone has any real understanding or useful model of the global economy.
