We’ve seen this story before. As an investor you need to read between the lines. Plainly, Trump is going to do things that benefit his billionaire donors.
Not saying that this is right, but it’s the way it is.
You’re acting like Trump can be trusted to tell us the truth.
He put on his social media “IT’S A GOOD DAY TO BUY STOCKS”, which could mean anything. I honestly assumed it just meant he was panicking about the market tanking, and while I ignored him as is wise, if anything it felt like forewarning of more to come. Ultimately he was panicking, but I didn’t expect him to reverse course.
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I guess all the smartest guys on Wall Street got duped then? Or the best estimate of Trump’s actions reflect massive volatility because Trump himself has no strategy. There is no signal, only noise.
I don’t believe that anyone on Wall Street can reliably tell you where stocks will go next. The real “smart guys” are running hedged models that pay them regardless of which way stocks move.
Surely no one person can, but the combined opinion of everyone is the best we have.
And those supposed hedged geniuses are anything but. Hedge funds lost so much during 2008 they wiped out all gains in the history of hedges funds prior to it.
Yeah, there is a reason I put smart guys in quotes.
So hedging isn’t a magic money pot. It actually costs money.
I wouldn’t say “benefit his billionaire donors” rather those people personally close to him at the moment (and Putin of course).
If I had to guess the order of events:
- Trump bounces positions around because he thinks it makes him look strong
- A group of people close to him convinced him his last round of tariffs for everyone threaten US financial stability which would stop him from doing something he wants to do in the future.
- He agrees to the 90 day stay of execution in the private meeting.
- He tells a few people he wants to reward and tweets it out as a cover and because he can’t keep a secret if talking about it makes him look strong.
It’s all about his ego. Those around him know this and manipulate him for their benefit when they can.
Oof, off a cliff again. I’m too old for this shit, I’ll be buying bonds or holding cash (4% from RH) for the near term.
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Fortunately I have a long time horizon. Any money with a time horizon < 5 years I couldn’t stomach any of this.
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Yeah. I was hoping to retire in 5-6 years, and I was slowly pivoting to bonds. Should have pivoted harder, it seems.
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That depends on how you do it. You can also make money by hedging if you do it by selling options.
I thought we were going to trip the first circuit breaker this morning. We were about 40 points away from that mark. Now it looks like it’s trying to go screaming back toward yesterday’s close.
1% moves either way in 15-30 minutes are not normal, and the S&P is churning those out today like it’s cranking out widgets at a factory.
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A 1% move in a trading day used to be viewed as a fairly notable change. This volatility is head-spinning.
Sadly, bonds aren’t looking great this week either.
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Tell that to the person who sold those 0 day QQQs.
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To profit selling options and limit risk you need to sell bullish and bearish options and buy cheaper options on each side to cap your risk. doing this you can set up a package of options with about 2/3 probability of profit and limited downside. I’m not saying that everyone should go out and do this but it’s entirely possible.
Myself I am a straight long buyer and take my lumps when the market goes down.
My main point is that there have been ample clues that this was going to happen. Also, I don’t blame Trump but the people who voted for him.
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Why not both?
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Trump is who he is, he didn’t lie about it and he’s been this way for at least 20 years. A leopard does not change his spots.
Sure, but this madness is completely his choice. Why let him off the hook?