Down goes the Dow

comfortably retired from the other ipad wrote:

CG 2 wrote:

Shiller PE ratio currently tied for second highest ever, almost as high as height of the dot com bubble. The time it's tied with is 2021 right before the market fell 22%... Gotta think we're in store for something similar soon.

Link:www.multpl.com/shiller-pe

I wouldn’t suggest trying to time market drops based on high CAPE, it can be quite high for a long time. It’s better to think of such value measures as indicative of longer term returns. That said, when the market gets very expensive like that, you might consider adjusting your asset mix to have a higher than usual weight in cash (like Buffett has done) and fixed income than usual.

While flaphole has declared the markets will NOT crash, and he will tell you he is never wrong, markets DO crash from time to time (beware the fat tail gente keeps mentioning), Mueller never came and, unfortunately, Kamala did NOT win. Although maybe he has some bizarre logic to explain why he’s right on all those accounts to brighten our Monday.

Flagpole wrote:

agip wrote:

Stocks since this tweet +16%

steph pomboy
@spomboy
As we look ahead to next week, the market is facing three blustery headwinds. (1) The unwelcome realization the Fed is not going to deliver an immaculate pivot but is in fact too late to the party.... as always. (2) the rising prospect of the continuation of big government, anti-private sector fiscal policies. And, perhaps most importantly l, (3) the unwind of the three decade-long yen carry trade. Buckle up, folks! The road is about to get very bumpy.
10:24 AM · Aug 4, 2024
·
156.7K
Views

Eventually (when?) we will have a down market for a calendar year. The last 2 have been good, so a bad or mediocre one is going to happen to even things out. Historically, first year US Presidents mean a lowish market with Republicans faring worse than Democrats.

BUT, you likely know that I don't care, and neither should any of you. If you're working, invest anyway. If you have debt, get rid of it. If you are in retirement and the market is bad, use SS and liquid savings that aren't in the stock market to pay bills, or if you are comfortable or loaded, then just take as you would from your stocks anyway, or take a smaller percentage out if you want. Not rocket surgery.

agip wrote:

Anyone making any trump trades?

In my trading account, with very low stakes, I'm:

Buying European defense contractors. I think it's clear that Europe will have to defend itself and that means big contracts to homeland firms. Ticker EUAD.

Buying the NY Times. Clearly there will be millions of clicks to be had over the next 4 years.

Buying short term TIPS, in case Rs do spike inflation with tariffs and deportations.

Selling longer term bonds and putting the money in money market. 4.6% to just sit and wait for chaos to develop seems like an ok plan. Better than 4% and big interest rate risk.

Question is if the Rs will succeed in wrecking the dollar by attacking the Fed's independence. Doesn't seem like the kind of fight trump wants, but all the crypto bros around him want to do it - kill the Fed and the dollar with it. To replace the dollar with crypto. So that would mean buy gold and BTC. Maybe other real assets. But I'm not there yet. I have $5000 in Bitcoin, that's it.

The other question is economic growth...if they do succeed in slashing federal spending...that would probably mean an immediate recession. What to do about that? Tough one. But I suppose I'd have all that cash in money market waiting to buy cheaper stuff. But I'll wish I hadn't sold the long term bonds.

In any case, overall I'm at the low end of my risk spectrum at 60% stocks.

agip wrote:

Anyone making any trump trades?

In my trading account, with very low stakes, I'm:

Buying European defense contractors. I think it's clear that Europe will have to defend itself and that means big contracts to homeland firms. Ticker EUAD.

Buying the NY Times. Clearly there will be millions of clicks to be had over the next 4 years.

Buying short term TIPS, in case Rs do spike inflation with tariffs and deportations.

Selling longer term bonds and putting the money in money market. 4.6% to just sit and wait for chaos to develop seems like an ok plan. Better than 4% and big interest rate risk.

Question is if the Rs will succeed in wrecking the dollar by attacking the Fed's independence. Doesn't seem like the kind of fight trump wants, but all the crypto bros around him want to do it - kill the Fed and the dollar with it. To replace the dollar with crypto. So that would mean buy gold and BTC. Maybe other real assets. But I'm not there yet. I have $5000 in Bitcoin, that's it.

The other question is economic growth...if they do succeed in slashing federal spending...that would probably mean an immediate recession. What to do about that? Tough one. But I suppose I'd have all that cash in money market waiting to buy cheaper stuff. But I'll wish I hadn't sold the long term bonds.

In any case, overall I'm at the low end of my risk spectrum at 60% stocks.