Tariffs...what to make of them.
- Thread starter Dave Taylor
- Start date
LOL...I mean if this isnt the definition of a clown show
A group of barren, uninhabited volcanic islands near Antarctica, covered in glaciers and home to penguins, have been swept up in Donald Trump’s trade war, as the US president hit them with a 10% tariff on goods.
Heard Island and McDonald Islands, which form an external territory of Australia, are among the remotest places on Earth, accessible only via a two-week boat voyage from Perth on Australia’s west coast. They are completely uninhabited, with the last visit from people believed to be nearly 10 years ago.
Nevertheless, Heard and McDonald islands featured in a list released by the White House of “countries” that would have new trade tariffs imposed.
www.theguardian.com
Fucking penguins.....
A group of barren, uninhabited volcanic islands near Antarctica, covered in glaciers and home to penguins, have been swept up in Donald Trump’s trade war, as the US president hit them with a 10% tariff on goods.
Heard Island and McDonald Islands, which form an external territory of Australia, are among the remotest places on Earth, accessible only via a two-week boat voyage from Perth on Australia’s west coast. They are completely uninhabited, with the last visit from people believed to be nearly 10 years ago.
Nevertheless, Heard and McDonald islands featured in a list released by the White House of “countries” that would have new trade tariffs imposed.
Trump imposes tariffs on uninhabited Heard and McDonald Islands near Antarctica
Australian prime minister surprised after remote external territories – including islands home to penguins – targeted by US president
www.theguardian.com
Fucking penguins.....
Red Mosquito
Formerly RLB the Scrapple Boy
rjr44
Well-Known Member
Future-proofing? (heavy sarcasm of course)LOL...I mean if this isnt the definition of a clown show
A group of barren, uninhabited volcanic islands near Antarctica, covered in glaciers and home to penguins, have been swept up in Donald Trump’s trade war, as the US president hit them with a 10% tariff on goods.
Heard Island and McDonald Islands, which form an external territory of Australia, are among the remotest places on Earth, accessible only via a two-week boat voyage from Perth on Australia’s west coast. They are completely uninhabited, with the last visit from people believed to be nearly 10 years ago.
Nevertheless, Heard and McDonald islands featured in a list released by the White House of “countries” that would have new trade tariffs imposed.
Trump imposes tariffs on uninhabited Heard and McDonald Islands near Antarctica
Australian prime minister surprised after remote external territories – including islands home to penguins – targeted by US president
Fucking penguins.....
rjr44
Well-Known Member
Honest question but first the disclaimers (which won't be read by the trolls but whatever):
DISCLAIMER #1: this post is targeted towards those not near/in retirement stage where investing decisions are much different
DISCLAIMER #2: this post has nothing to do w/ whether Trump is smart or dumb, honest or a crook, I am or am not MAGA, etc...
That out of the way, for anyone w/ investing runway, are you following your plan? Personally I see lower prices as a gift, I can pile in more. My trading plan is 95% systemic, minimal discretionary, tho it is not automated, I do enter all trades manually. But I do so like a robot, if it fits my system, act, if it doesn't, move on.
That said, I look at market dips as a great opportunity for the future. Remember, market pullbacks are a feature, not a bug. Nothing goes up forever, no matter who is in office or what decisions are being made. Yes, those things are some of the impacts, along w/ many others. Always a good idea to remember these stats (not that past performance indicative of future results blah blah blah):
The frequency of stock market pullbacks in the US, typically measured using the S&P 500, depends on historical data and varies based on the magnitude of the decline. Here's a breakdown based on average historical patterns:
- 5% Pullback: These are relatively common and occur roughly once or twice per year on average. Since 1950, the S&P 500 has experienced a 5% or greater decline about 3 out of every 4 years, though the exact timing and frequency fluctuate with market conditions.
- 10% Pullback (Correction): A 10% decline is less frequent, happening approximately once every 1-2 years. Historically, corrections occur about every 18-24 months, though this can vary widely depending on economic cycles, geopolitical events, or monetary policy shifts.
- 25% Pullback: These are rarer and often associated with significant economic distress or bear markets. On average, a 25% drop occurs roughly once every 5-10 years. For example, notable instances include the 2000 Dot-Com Crash, the 2008 Financial Crisis, and the 2020 COVID-19 crash.
- 50% Pullback: These are extreme events, typically tied to major economic crises, and occur much less frequently—about once every 20-30 years on average. Since 1950, the S&P 500 has seen declines of 50% or more only a handful of times, such as during the 1973-74 bear market, the 2000-2002 Dot-Com Bust, and the 2007-2009 Great Recession.
I know I'll look at this type of scenario much differently in the future, but for now I do nothing different, trade as I always have and let my positions (long, short, synthetic long, synthetic short, etc.) just do their thing. If my positions are doing what I expected I leave them be, if they're not I get out.
It shouldn't matter how close you are to retirement. One of the mistakes people make is going overly conservative when they near retirement. Isn't the plan to live another 30 years after you retire? You can't live 30 years on a 5-year investment horizon.
Anyway, to answer your question, I have moved all my 401k accounts into more conservative funds for now. I plan to evaluate this every 3 months. I believe this correction will last a bit longer than normal, so I want to avoid digging too much of a hole. Also to be fair, this correction has been predicted for a solid year now. It is fair to say Trump kicked the leg out from under the stool. But it was likely to collapse one way or another anyway.
Non-401k investments there is no change in my approach. Time cost value whatever-the-hell it's called.
Days like today I'm second guessing not going overly conservative. The likelihood that I live another 30 years is slim. trump is just adjusting my portfolio accordingly.
Only change I make is on some of these big drop days I'll just throw an extra few $$s in compared to the weekly automatic investment. Today I threw $100 extra into the whole US market fund and $100 into International just because. Not huge, but I had the cash.
One thing that helps is since I've had the accounts open long enough I've seen a huge change from 10-15 years ago. So while there may be a big drop, mentally I know it's still way higher than when I started.
So I would say I agree with you.....However....I don't think anyone can say this is a typical economic event....I mean even covid....you knew in time, things would turn around again and Americans would go back to buying shit at their typical rate. This whole plan depends on the reshoring of American manufacturing....and thats easy with cars...we already build millions of cars here every year....Its a known industry....Mazda/honda/toyota knows exactly what it takes to build a auto plant here and move production. On top of the fact that they are huge projects and get all kinds of government kickbacks, tax breaks, etc.....While its a small and insignificant portion of our economy...its more to the point of the issue with reshoring all the things....building carbon bike frames in the US...way more complicated.....Lot of human involvement to make a carbon bike frame...and American humans get paid alot more, demand benefits, standardized working hours, etc....Finding that guy who wants to invest his billions in making a bike frame factory in the US....Does he know he can make a profit right now? Oh and what if the tariffs get canceled next year? I mean start going down the line with things we buy from China, Taiwan, Vietnam.....We going to start building T shirt factories in the US? I don't see it.
So at one point do people not buy certain things anymore...I mean we all need cars...but outside of us dedicated bikers....how many people go to target for that $300 pos bike and now its $450? oh fuck that, ill join the gym. I have no idea, im not an economist....but as a mechanical and manufacturing engineer....building stuff in the USA can be done, we can build anything we want....but it will blow your mind how much more expensive it can be.
My guess is with the stock market....do we know where the bottom is? I sure as hell don't
rjr44
Well-Known Member
How short did you go on DIA? Or maybe long to the hilt on SPXS or (my personal favorite choice for a synthetic market short) SQQQ?
Congrats on making a killing over the last month plus! Putting one's money where their mouth is isn't exactly a common trait on the interwebs.
rjr44
Well-Known Member
No one ever knows the bottom or top (if they claim they do pls don't give them any money!). Personally, the "easiest" way to invest is to try and capture the middle 2/3s of major trends. Don't get in at the bottom, don't get out at the top, cuz as I said that's unpredictable.
Comparing a historical event where we know the outcome to a current event we don't know the outcome to is apples to aliens. Maybe not you, but there were countless people at the height of COVID expecting a great depression like event. Half the world population gone. Etc. It's easy to look back now and say "we all knew it would come out OK" but the fact is everyone did not indeed know any such thing. Most people knew no such thing. If you did bravo, you should be filthy stinkin' rich right now based on that foresight.
You are also assuming there is only one possible future, one of continued aggressive tariffs against friend and fo, breaking the economy, enriching the rich at the expense of everyone else, etc. etc. etc. But countless possible futures may occur.
Maybe Trump will back off these tariffs in the future if he gets the response he wants from trade partners. I saw something last night (I didn't verify it tho, so if it's fake news don't @ me pls) that Canada has already offered to rescind all their tariffs against us if we agree the same against them. IF that's true, and IF other countries did the same, I think that plays out WAY differently than your worst-case scenario.
Or, another possible future. Most of the people on this board seem to feel Trump is a diabolical, untrustworthy, snake oil salesman crook who is only out to enrich himself and his friends. Let's say this is true. IF I were in his shoes in this scenario, might I not want to tank the market, let all my family and buddies know when the bottom is near cuz imma flip my stance and send the market to the moon? So why wouldn't he and they load the boat at that moment and then get filthy stinking rich as the majority here claim is his MO? Remember the PPT (Plung Protection Team) in December of his first term where to the day he announced the bottom was in, and we had a very nice rally? Do you think there is 0% chance of this? Or do you think he is honest and not out to make himself and his closest even richer and there is no way this is possible?
I can come up w/ plenty of other scenarios, but don't wanna bore everyone here more than I already have.
If you are convinced the only possible future is the one you laid out, I hope you've put your money to work to reflect that viewpoint. Cuz if you did, and you are right, and the market goes down 50%, 75%, worse(?) those increased prices won't matter one lick to you cuz you'll be freaki' loaded bro!
I have no such opinions on any of the above cuz history has proven to me over and over again I cannot forecast the future. So I stick by my methods that have worked for me since the 90s. Everyone is different, and if you have that level of clairvoyance and conviction then like I said, price increases will be laughable to you.
OK that is fair....and I will say...in my fishbowl (which is how most people experienced covid)...even married to an ER nurse..I still thought, in time, things would turn around....but 100% reasonable to not feel that way, I get it.
possible...of course this also means he sold out the UAW workers he was standing on the stage with yesterday...which would not shock me because he and Elon have publicly voiced their distain for union workers many times. I listened to his press conference yesterday and bringing manufacturing jobs back was brought up ad nauseum....so if he pulls the tariffs back tomorrow, that was all bullshit.
No idea....nothing Trump does really shocks me.....well unless he is showing empathy somehow...I would find that shocking
Nobody. But it will bottom out at some point and start to go back up. Eventually.
The problem is that I don't think trump has the knowledge or economic intelligence to form an effective long term plan. He flies by the seat of his pants and then adjusts according to his mood. When all else has failed he's relied on bankruptcy. This is a ridiculously expensive gamble going on right now.
rjr44
Well-Known Member
AHHH, so you're saying he can do something unexpected? 😛 And that is what drives market prices! Not what the majority think will happen, as that's already generally priced in, but when something happens few thought would. And that goes both ways. He can go even bat shite crazier and drive prices down more!
You're luckier than me re: COVID influence around you. I had doctor friends saying the worst is yet to come. That didn't drive any of my decision making tho. While I was lucky enough to have a nice number of SPY puts before COVID hit (not predicting COVID, just my system said it was time to get some downside exposure in place) I covered them before the bottom and didn't lever up until the rally was underway. But that's how my system works, so no regrets.
rjr44
Well-Known Member
And that there is the definition of market volatility. No one knows what he'll do next, and when he does something unexpected, prices move hard.
But therein lies the opportunity. It sux when that opportunity turns out to be on the downside where most folks are not as knowledgable or equipped to take advantage of it. BUT that's how markets work. Without risk there is no reward. Without big risk there's no big reward.
The majority of the population isn't looking for an opportunity to make money off of this. They want to be able to afford to live.