Early Retirement Extreme Forums

For me it's more like another lesson in the seeming impossibility of profitable AND moral investing.

I'm increasing my exposure to industrial robots.

I am thinking that shortly after his inauguration may be the best time to buy AMZN, FB, APPL and GOOG. They are already dragging from lack of interest, but the short-term politics has nothing to do with their businesses long-term.

Agreed on tech. AMZN is really getting it right now and I'm really hopping AAPL continues to go down, as the next phone is probably the one everyone will want (looks like lots of changes including physical).

Today's open was small opposite moves of everything that has happened suggesting a new plateau has been reached.

jacob wrote:Today's open was small opposite moves of everything that has happened suggesting a new plateau has been reached.

Agreed.

The trend of the smaller cap equities vastly outperforming the larger companies seems to be continuing. S&P500 is down, meanwhile the Russel 2000 is soaring. This usually doesn't happen.

@chicago81 -- My only guess is that it's in anticipation of Trump relaxing rules on smaller businesses and renegotiating trade deals, but I find some of the moves this week puzzling.

Big Government and Big Regulation give the inside track to big corporations, one of the ironies of the belief that more government and more rules will somehow level the playing field. I have no idea if anticipation of less government and fewer rules is why we're having this short burst of relative outperformance of small-caps in the wake of Trump's win. History is full of periods where small-cap out performs large, and many authorities believe that small-cap outperformance over time is a consistent, dependable phenomenon. IIRC small-caps had taken a beating in recent weeks and generally lagged large-caps since 2007-2009, so at some point a reversal is arguably expected. Hard to draw much of a conclusion from less than a week's worth of data other than to say maybe the speculators speculated wrong about the election and are busy re-speculating about the future, perhaps correctly, perhaps not.

More of last week. Financials, Cons Disc, Industrials are all up again. Dow 19K look plausible?! Bond proxies continue their fall and seem to be getting back to their pre-run up levels.

I am hoping for a pullback in the sectors that have jumped, since they have jumped so quickly.

Main thing keeping me from taking any drastic measures (selling off) is the assurance that "capitalism" will prevail. Truly a psychological test..

On the other thread, there was some talk about Thiel (gay, Libertarian, strategy master, etc). He is the wildcard Trump earpiece, I think.

For Thiel's stance on some things, see: https://www.youtube.com/watch?v=PsXFwy6gG_4 (lots of related videos in the sidebar to continue your watching)

He could be the explanation that certain tech stocks are going down..

I'm so confused and have no idea how to make money on this yet. Frustrating.

I guess the picture I've formed is that the first few days after election gave us a flash glimpse of where the money wants to go and will in the medium term. Since it happened so quickly, I think there is going to be a pullback over the next few months but then start flowing that way again. Financials were already going that way since inflation is ticking up and wages are rising. Materials would also benefit from this.

We'll see how it goes. Keep in mind I've only been doing this for a year now.

My gamble will be to take some short term profit on this Trump president-elect market after thanksgiving and then make a few bets that he will not win the electoral college. The big unknown in this scenario is who (3rd place finisher) do the GOP faithless electors want to put to the House to be chosen over Trump? Also there would be the air of uncertainty with Trump losing and if the 3rd place man is not a clear favourite going into the House.

The moves so far suggest that the market believes the following:
1) Interest rates are going to be raised. (Why the USD is up.)
2) The GOP has received a blank check to facilitate the difference between D and R policies. (The $deltas = market(R policy-D policy) + market(T policy-D policy) ... the positive moves in infrastructure can be attributed to Trump as can the negative moves the food industry. The rest is typical R-D differences.

What is not priced in, at least not that much, are possible reneging on trade agreements. These would hurt tech and the dollar (both will go down) but shale gas would go up (because energy imports would be more expensive), so those would be the next trades if it indeed does happen. I don't know if T is seriously going to go for it, so I'm not speculating on it. Unlike interest rates, which I feel confident about, this is much more up in the air (beyond my sphere of perceived competence.)

Murmurs about stagflation are increasing ...

http://www.bloomberg.com/news/articles/ ... presidency

Graphs indicate inflation going to ~2% and growth going to ~0%. Not quite the 1970s, but maybe worth it to start thinking about positioning. Most of these articles now seem to attribute it to Trump policies, but these things were ramping up before the election already.

The classical investment conclusions of the 1970s were the PP and the Alpha Strategy.

@Jacob: FWIW, talk about stagflation is very seasonal and these murmurs are right on time.

https://www.google.com/trends/explore?g ... tagflation

Anyone see that xe.com showing Yuan inflating 9%? Other sources not showing that yet..

bryan wrote:My gamble will be to take some short term profit on this Trump president-elect market after thanksgiving and then make a few bets that he will not win the electoral college. The big unknown in this scenario is who (3rd place finisher) do the GOP faithless electors want to put to the House to be chosen over Trump? Also there would be the air of uncertainty with Trump losing and if the 3rd place man is not a clear favourite going into the House.

Another one: http://www.nytimes.com/2016/12/05/opini ... trump.html

Guess I need to make my aforementioned trades (and figure out exactly what they are other than taking profit from Nov) this week..

@Jacob: FWIW, talk about stagflation is very seasonal and these murmurs are right on time.

https://www.google.com/trends/explore?g ... tagflation

That chart is great. There's a larger peak every spring and a smaller one every fall. Since the first "related topic" is AP US History these searches may not have much to do with economics.