I have a hunk of FAHCX which is a blend of good corporate bonds, junkier corporate bonds, high dividend stocks, and preferred stocks. Low beta & a 5-ish% yield. Its done well enough in good times and bad. It will go down if the market does, but not as much. It’s all US-based though, so provides no hedge against the president destroying the USA’s economy & markets.
That and a couple years’ Treasury ladder should see me through the rest of trump’s plausible lifespan. I’ve still got a bunch of broad market exposure with the rest of my funds.
Okay, so the consumer confidence numbers are way lower than expected and at almost COVID lockdown levels. More tariffs. All bad economic news. So let’s have a big rally!
Absolute fucking nonsense. Tesla is even in the green this week after Elon tweeted about how Hitler didn’t really kill any jews, it was all government employees, and that’s why we need to fire all of them of course.
I don’t know if somehow the big players are propping up prices to exit their position or how any of that works but it’s hard to believe any of this makes sense sort of some sort of manipulation.
A. Dead cat bounce
2. Every time we get close to lots of broad tariffs, somehow we miraculously don’t do it. Eventually the market will stop paying attention until Trump actually goes through with it.
That said, I think we’ve passed the recession tipping point. So if Trump never does implement bigly tariffs it might not be as bad.
If I say that I’m going to chop off every one of your fingers on Tuesday then, at the last moment, say, “I’ll just do the left hand, right now. See you in 30 days on the other.” And I do chop off your left hand’s fingers, and 30 days later I do chop off all the ones on the right - I have chopped off all of your fingers.
I don’t believe, at the moment, that Trump has taken any tariffs of the table and he has enacted something like 80% of those proposed. The remaining 20% are deferred but not cancelled.
I think the day of reckoning for Tesla may be at hand
Two days in a row now I tried to make a put and a call in the off-hours and I used yesterday’s closing ask price so they’d sell quickly and both times they didn’t sell. I guess the market moved so quickly the old contract value wasn’t really valid. I guess that kind of means you can’t really trade options out of market times, because what I would’ve had to have done was increase my premium significantly to make sure there was someone to buy it at the start of day, but if it didn’t move favorably so quickly then I’d be overpaying by a lot.
Oh well, I’m doing fantastic on what I’ve got, but I tried to sneak another tesla put and a tslz call in there.
I’ve decided to move some of the money I moved to safety into a broad European index fund (VGK). My rationale:
-Europe is increasing defense spending, which will benefit EU companies; Germany, in a move unthinkable six months ago, has just voted to loosen its debt limits (still has to pass the Bundesrat), and nations all over Europe are increasing spending
-The EU markets have not seen the runup we saw here over the past 5 years, so there’s a lot more value on the table
-I suspect with the turmoil here I won’t be the only one who looks elsewhere for growth
-If the dollar weakens, as Trump has stated he wants it to do, then I would gain from the FOREX.
Anyway, just letting you know what I’m thinking. Feel free to criticize if you like.
Totally agree with your reasoning & did pretty much the same thing yesterday. I liquidated a couple of vulnerable US funds (small caps and real estate) and moved the proceeds into FIEUX, a Fidelity European stock fund.
One of the many things that concerns me is that if the US goes into recession, how much of the rest of the world will it drag down?
As I mentioned up thread, I did put a bunch of my S&P 500 index money into foreign indexes, for pretty much the reasons @OldOlds said, but I’m not confident it is a safe move. Of course that line of thinking is why people buy gold, and I don’t like that either.
Fun news. I was just fooling around on the fidelity site and came across the performance tab. My return over the last 3 years has been 117%, compared to 32% for the S&P 500, 28% for the total stock market, and 0.27% for the total bond index.
I think European-wide markets are just fine, but if you specifically want to benefit from defense spending you’re better off specifically targeting defense stocks. I’ve got EAUD but also Indra systems, Thales, Rolls Royce seperately. The latter two are already part of the EAUD holdings. I wish it was weighted a little more towards the smaller defense stocks. I am interested in getting a wider set of Euro defense stocks.
I know almost nothing about China stocks, but I was looking one of the stock subreddits and there was a discussion where some people said that China indexes are highly manipulated by their government just like their currency and investment could be dangerous/misleading.
I was going to say the same thing. I’m not a professional, but everything I’ve read is that the government is way too involved, and will absolutely pick winners and losers.
Furthermore, you cannot trust any of the Chinese economic data, especially with all the shadow debt.
Personally I stay away- but then, until just now, I was almost exclusively in the S&P 500
I considered that, but I decided a broader index would be a little safer. And Germany’s spending bill includes a lot of non-defense items like infrastructure. They had to include those to get the Greens on board.
Yes, that’s correct. That’s considered the main Euro defense ETF when people ask how they should invest. I think it’s a bit limiting and overly heavy in the top few, but I don’t know if any better ETFs to recommend and it can be harder to invest in the smaller Euro defense companies from American brokerages.
If the US enters recession, then yes, it will drag the world down. the question is which sets of stocks will suffer more: US or non-US?
Historically the answer was that even in a US-triggered worldwide recession (e.g. 2008), US stocks did better. Because as bad as things were in the USA then, it was still perceived as a safe market backed by a competent government. Which was dedicated to righting the ship and reflating the economy ASAP. And had the deep pockets to do so.
The question now is whether really this time it’s different, and what the US is about to experience is not a normal business cycle recession (i.e. recessions other than 2008), and not a business / financial crisis that is resolved with prompt smart massive government action (i.e. 2008), but rather something new and far more sinister. Namely a collapse triggered by kleptocratic vandalism that precludes a recovery any time soon.
Many many countries have experienced these sorts of collapses due to government chaos and/or wars since e.g. 1900 when finance capitalism really got going. The US has not. Yet.
Yes, this has always been a good assumption, and I rode out the 2008 crash (bought a house) and the Covid dip. The people running the country wanted a strong economy and stock market, and took steps to get back there. I am convinced that is not at all true now.
We started with a strong economy and stock market and the people running things are deliberately destroying it. I don’t even think it’s incompetence. They’re breaking things so they can pick up the pieces. I think the only remaining question is how much are they able to get away with breaking.
This is my concern with investing heavily in China. I do think that if the US economy collapses, and our influence in the world is diminished that the 21st century will be the century of China, if they can keep their shit together, but investing there is like investing in post-collapse US—someone is picking the winners and losers.
Fed isn’t changing the interest rate, which is cool with me, I don’t think we should be using up one of our most important financial tools to cover for moronic self-inflicted wounds and not have it for the recovery later. But the market considers that bad news – they wanted the rates cut.
We’ve had major bad news like 4 times in the last couple of weeks. Consumer confidence came in WAY lower than expected, GDP projection dropped massively, and some others I can’t even remember now, and every time the bad news was delivered the market immediately jumped higher. It’s hard to take this shit seriously when the market jumps every time there’s awful news.
“WW3 has started, nuclear missiles are inbound, everyone has 20 minutes left to live” would probably make the market jump 30%
I can’t think of one rational reason that Tesla is soaring today. It is completely irrational. I think if you polled people who actually bought Tesla why they did it, they couldn’t give you a good reason. Maybe it’s a vague sense that the market isn’t actually based on the real world, with real companies, and they’re just used to seeing that particular string of letters with a higher value? Or is it some sort of market manipulation to try to punish people out of their puts? I don’t know, but it makes zero sense.
In some ways we’re about to enter a stock market where any stock can be a meme stock. Manipulated by who-knowns-who for who-know-what reasons.
There will be a lot of momentum plays. But the momentum will be going from bearish to bullish so often you’ll think you have a ringside seat at a pingpong match.