Investment suggestions for Trump's presidency?

[SuburbanFarmer]

Your best bet is to ask GrumpyCatFace, he is the resident economics and finance expert. His views on wealth creation are beyond reproach.

Step 1: read the Intelligent Investor
Step 2: realize that the lessons from the Intelligent Investor counsel you to not buy any equities whatsoever at these levels
Step 3: wait for years for a "value play" a la the Intelligent Investor, and never find one, well, maybe in the next decade you can find one, if you're patient
Step 4: give up, learn to love big brother and buy SPX

If I had followed the advice right there, I'd be better off than my "clever" schemes.

So you're convinced that the market cycle has ended? This time is different because the Fed dished out a blank check? No more recessions ever?

Go read that book again.

[apeman]

No I am not convinced the business cycle is dead, I am commenting critically on my own failure to grab that last several years of gains because I want to be a "value investor."

These are unprecedented times, could be a longggggg time until you can indentify a single stock Graham would have bought under his own system -- agreed? IF not, show one to me.

Doesn't mean it isn't picking up pennies in front of a steam roller, it means that when you are as wrong as me you need to reassess and stay humble.

[SuburbanFarmer]

No I am not convinced the business cycle is dead, I am commenting critically on my own failure to grab that last several years of gains because I want to be a "value investor."

These are unprecedented times, could be a longggggg time until you can indentify a single stock Graham would have bought under his own system -- agreed? IF not, show one to me.

Doesn't mean it isn't picking up pennies in front of a steam roller, it means that when you are as wrong as me you need to reassess and stay humble.

Same. I went short for 2 years, and tossed out my entire account, waiting for the long-overdue correction.
My 'reassessment' has involved stocking financial ammo and awaiting the return of big game. No point in trying right now, until the machine finally breaks down.

I refuse to 'invest' (gamble) a single penny on the current Fed bubble. The government and markets have left behind any semblance of sanity. We're talking about MAUs again, derivatives, and 'future growth' - same as 2007. History is rhyming like Snoop Dogg on Adderall.

My 401k was withdrawn some time ago (employer doesn't match), but I genuinely feel bad for the 10s of millions of fish hanging on that line right now.

[apeman]

We are in complete agreement that we think the market is vastly overvalued.

I have learned this -- so far, I have been wrong. Yeah, I got investments, but have stayed 50% cash for years now, and I have been wrong.

I don't know how we got here, but our political system will not tolerate a recession or big stawk losses, and all stops will be pulled, I wonder what is a bridge too far nowadays. For example, at what point will the bank of japan own more than half the japanese stock market? These ticker numbers are life and death for the political class.

I dunno, it's fucked. Hence my joke about learning to love big brother.

[SuburbanFarmer]

We are in complete agreement that we think the market is vastly overvalued.

I have learned this -- so far, I have been wrong. Yeah, I got investments, but have stayed 50% cash for years now, and I have been wrong.

I don't know how we got here, but our political system will not tolerate a recession or big stawk losses, and all stops will be pulled, I wonder what is a bridge too far nowadays. For example, at what point will the bank of japan own more than half the japanese stock market? These ticker numbers are life and death for the political class.

I dunno, it's fucked. Hence my joke about learning to love big brother.

We got here, because the government realized that they can do literally anything to us, so long as we have our bread and circuses.

They've revoked half of the Constitutional Amendments, openly suspended habeus corpus, and we're finding out about all of their disgusting payback schemes constantly. If there was a major recession right now, we'd be burning down the White House within a week. It's life or death for them, at this point.

[apeman]

I gotta say, if you invest in the opposite of what you think you should (or the risky thing you can find), the market handsomely rewards you for years.

Top performing asset yesterday?

Italian banks.

[SuburbanFarmer]

I gotta say, if you invest in the opposite of what you think you should (or the risky thing you can find), the market handsomely rewards you for years.

Top performing asset yesterday?

Italian banks.

Funny how that works, right?

I suspect that this is an effect of the massive options market that has grown up over the last decade - and, of course, the HFT firms that actually run the market now.

Everybody is so hedged that the market appears to be moving opposite of what it should on major events. When there are only a few major actors, and a few hundred light-speed arbitrage HFTs zipping around every single trade, it's hard to imagine that anything can move in a significant way. Every time a whale moves, the HFTs take their share of the action, and the market actually sees a smaller move. Do that a few million times in seconds, and the move is a tiny fraction of what it should be....

I have to concede that it's possible that the HFTs are actually able to neutralize any drastic move in the markets. That would really be scary. Effectively, the market would just ride inflation forever, until the system breaks somehow - which is exactly what we're seeing...

[apeman]

Just spitballing, but want you to challenge your convictions:

What if S&P starts to fall apart? Retirees not able to pay expenses, consumer spending plummets, lay offs, etc.

The people beg for the god emperor to fix it.

Congress passes the American Financial Security Act, designed to ensure all those hard working americans who saved for retirement aren't screwed by those dastardly "wall street speculators" are taken care of. Sad!

QE is restarted, Fed begins openly buying stocks to ensure elevated levels, just like Japan and other places. Hell, the Euro bank straight up buys private corporate bonds, so those corps can turn around and buy back their own stock! Maybe we'll do that too.

This isn't Ben Graham's world, is it? Or is saying "this time is different" the same trap as it always has been?

I no longer have an opinion.

[SuburbanFarmer]

Just spitballing, but want you to challenge your convictions:

What if S&P starts to fall apart? Retirees not able to pay expenses, consumer spending plummets, lay offs, etc.

The people beg for the god emperor to fix it.

Congress passes the American Financial Security Act, designed to ensure all those hard working americans who saved for retirement aren't screwed by those dastardly "wall street speculators" are taken care of. Sad!

QE is restarted, Fed begins openly buying stocks to ensure elevated levels, just like Japan and other places. Hell, the Euro bank straight up buys private corporate bonds, so those corps can turn around and buy back their own stock! Maybe we'll do that too.

This isn't Ben Graham's world, is it? Or is saying "this time is different" the same trap as it always has been?

I no longer have an opinion.

That's exactly what we did in 2008. The corps have been spending like maniacs on their own stocks for a decade now, to 'return value' to shareholders.

The only reason that you can't just QE your ass off forever is inflation. All of that sweet, sweet free money is sitting in bank vaults at the moment, hanging over the economy like an asteroid. Eventually, it will have to be spent on something, and that is when the effects will finally start hitting the real economy.

The bigger that asteroid gets, the smaller the distance between America and the Weimar Republic economy. Extreme example, but that is exactly the effect that we'll be watching when this storm breaks.

So, let's say that something happens in 2017 that causes a market shock - nobody knows what the hell happens. We're so far into Wonderland that even the experts are completely unsure. We're already at turbo-charged interest rates, so the Fed is helpless. All that's left to do is print more cash. 20% inflation, anyone?

And god forbid that those bank vaults get opened, and they actually start investing/lending again. I have a feeling that that's how it's going to happen. Trump will come up with some stupid idea to 'kickstart' the economy, and directly force them to use their reserves. Then that cash hits the real economy, and....

Well, I do know that any sort of cash savings will be worth a hell of a lot less. Other than that, who the hell knows.

[apeman]

You a gold bug then?