And down it goes…
I get a nice warm fuzzy feeling when I time the macro movements for investments (gold) just right.
I am however a bit surprised the S&P 500 is still trending upwards.
I was of the view that tariff induced damage would bring the valuations down. But it would seem Trump has been a bit lucky with inflation so shares have moved up a bit.
I did pretty good with the gold but I still have a $50K chunk in a taxable account that grew to $75K and I’m sitting on 50% short term gains, have to wait that one out but overall I’ve been less than 5% gold for about a week
if it’s a terrible store of value, why is it worth so much now
it has many useful qualities such as softness, lack of tarnishing, decorative uses, industrial uses
still at 4K it’s way past my budget
Most people only own it on paper so clearly not buying it for those uses. It’s worth a lot now for the same reason tulips were worth a lot… people like how they look and think others will pay more in the future.
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Looks like Trump has an apt for currency trading
Tulips don’t last as long, are not as easily divided and resold, and had, as far as I’m aware, no industrial value
Diamonds similarly have industrial value. It being non-zero doesn’t imply that’s a material underpinning of the price. Silver has a far more significant industrial underpinning. If gold was brown its price would be a small fraction of what it is now.
I don’t know much about industrial uses of either, but I do know silver is more common in nature and tarnishes more. And I see gold in all my cellphones, I don’t see silver.
Personally, I like silver (untarnished) better than gold in appearance, so I don’t know that color really is a huge part of it.
Diamonds are worth a lot. But those can be made in the lab more cheaply than mined, while gold cannot be made in a lab more cheaply than mined.
About half of the production of silver goes to industrial uses. That figure for gold is something like 5%
There’s also a lot more silver in your phone than gold.
must be supply that’s keeping the price down then
or the tarnishing
NVIDIA has a $5T market cap now.
Thats c16% of the entire US GDP…
If that isn’t bubble territory I don’t know what is.
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What% of the economy will be driven by AI?
Nvidia had 28b of earnings last quarter. They are making a massive amount of money. 50% higher than a year ago. A 44 p/e on that growth is not that crazy, although at some point it will have to level out.
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Here is the problem and the main reason why this bubble is very problematic.
That sort of circular nonsense works until it doesn’t. And then you get a big crash.
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I’m not a market timer, but I’m within a few years of retiring (I hope), so I’m continuing to rotate into bonds and SCHD some more, I’m just north of 20% now in BND. Just sold another $25k of S&P to buy BND next week. Market could go higher still but I’m happy to take some gains with the S&P at 6,900-ish.
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Just as an addendum to that last post. This caught my eye while doing my usual weekend FT reading:
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This guy has some very big cojones.
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Self fulfilling prophecy perhaps at this stage.
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Stocks feel expensive right now.
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