Down goes the Dow

This is all an elaborate play to avoid the massive "I told you so" I was going to deliver this morning in regards to the tariffs being a non-event and all for show, as the SP500 hits a new record today

Nasdaq hit a new record today as well.

I went long with some sideline cash in March and April. My portfolio hit new highs a few weeks ago. Just cashed out half my Nike stock on good earnings yesterday (up 15% this morning).

Still holding UCO, which I bought too late, so not all winners.

I’m thinking it feels really good right now, but this year’s lows may be tested again in the next 12-18 months.

(was agip)

this is one reason market cap weighted indexing works so well. The market is very efficient at pushing to the top of the SP500 the companies that are growing very quickly, and if you use a market cap weighted index, you will own these very very successful companies in size.

Note that we're finally getting a measurable tickup in inflation - have to think the big tariffs on the market are starting to be passed on to buyers.

if that inflation sticks, the 'Fed will cut rates at the end of the year' leg of the stool will go away. Which will not be a positive. for stocks.

Will be interesting to see how much the tariffs hurt corporate profitability - Nike said tariffs will cost them a billion dollars. But dose of salt with company - they'll hide a lot of problems and blame tariffs.

clevelandfed.org

Inflation Nowcasting

The Federal Reserve Bank of Cleveland provides daily “nowcasts” of inflation for two popular price indexes, the price index for personal consumption expenditures (PCE) and the Consumer Price Index (CPI). These nowcasts give a...

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Aren't you just going to have the MAG 7 and a few other very large market cap companies dominating this index? The MAG 7 represents 34% of the S & P.

Damn right and it was common sense to get into at least one of them, years ago. Winning!

yeah, exactly. Since so much of the market return is often provided by just a handful of massively successful stocks...market concentration is a feature, not a bug.
The SP500 picked out the mag7 and it's been well magnificent to own those.

There were several others here pushing that nonsense. And I was so shameful to post linked articles that otherwise had to be subscribed to. The times we were in.

Sorry that it's taking me so long to get back to you on this, but I have been hiking all day in a stunning nearby National forest. It was amazing. Just the kind of thing us wiser and more industrious boomers get to do. And do about as often as we care to, for that matter.

As for the markets, I guess it's all how you look at it. Sure, markets revisiting ATHs, but you can also consider that it took half a god-damned year just to rebound from the sell-off that the tarrifs caused. By most standards, half a year lost is nothing to brag about, is it?

I'm delighted that the damage is only that (at least so far), and I would have thought it would be far greater. But I wouldn't call the tailspin of the last 6 months a non-event by any means. And that's not even touching upon the damage done to other vital areas like the economy, the dollar, credibility in the eyes of our trading partners, and market forces yet to fully play out.

But nice to hear from you, Prof.

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THis is true. I've been noticing for a litle while now that my tech ETF has been outpacing the Mags sevens (except Nvidia). I've been adding to it on the rebound.

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Anyone else skeptical of this rally and new all time highs? All the metrics out there still suggest the market is overvalued by historical standards... However, it does seem like more and more people are investing, which could explain some of it... Credit and margin are also being used to a greater extent than ever before also... Seems like it's impossible to tell what the future holds. I have been really surprised to see returns as high as they've been the last couple years. I'm up nearly 21% over the least 1 year, and the year before that was even better. How long can this continue?

Hey Flagpole, remember when you wrote this? HAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA HAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAHAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA!!!

It's been wrong to be skeptical, but that's what makes markets.

Markets are saying that the world will find a work-around re; tariffs, the good stuff from DC will outweigh the bad stuff, and the system will soldier on.

Not sure it's wise to fight the tape.

But with trump as president and him completely controlling both the WH and congress, there is always a higher than normal chance of disaster.

As for valuation...valuation makes no difference until you start talking 4+ years of return. Valuation and 1 year return has zero correlation. So we shouldn't talk about valuation and immediate returns as having any relationship.