WayWardCloud

trimmed a little Amazon to buy a little Alphabet. Probably just tinkering around the edges because I'm bored.

Sold some of my vanguard all world equities index fund (VT) to go down from 111% leverage to 100% (peaked at 118% during the worse of tariffs). It's been a successful round trip and I wasn't as comfortable anymore even though I still see value. I'm planning to slowly sell more stocks and add back to bonds if we keep ripping and I wrote down the exact values (completely arbitrary) at which I would do the rebalancing to keep me from overthinking.

I've been fantasizing about Amazon coming into the healthcare space at scale and wrecking these guys for too long to take a position here but it does seem cheap. When your CEOs are getting shot in the face it's fair to say you are ripe for disruption.

Thank you for this! My feelings exactly and I wish I had half of your comedic writing talent.

I think this is spot on. What might have been underappreciated here regarding what country holds what leverage during trade talks is that Chinese and European people are way less, if at all, invested in the stock market and that their retirement funds don't depend on it. I would bet that less than 5% of French people know what the sp500 is and maybe 5-10% big maximum know what the CAC40 is. They understand the damage that will happen long term to the actual economy if the tariffs hold but haven't felt any short term pain so it didn't translate into pressure on their executive branch to cave and make concessions, quite the contrary actually. Economic pain in the US is transmitted almost instantly via 401ks and public opinion can change much faster, regardless of political family, when it feels like your nest egg is vanishing.

I bought the dip quite hard on Friday (went from 85% stocks 15% bonds to 120% stocks 0% bonds) and my strategy is simply to wait until the news du jour is Trump's economic policies. Tax cuts for companies and freebies to the 0.1%. A quick look at Trump's entourage will tell you the oligarchy is in full power. They're not going to work against their own interest. Keep it simple guys.

I'm no expert but Europe has SEPA + a Digital Euro project, China has Ali Pay and WeChat Pay, working on digital Yuan and working with Russia and others to transact away from USD especially for energy... Don't you agree anyone who wants to remain truly sovereign will have to control their own payment system?

To those above who bought / considered buying Visa, opinions on Visa vs. Mastercard? Besides the high valuation, another thing keeping me from buying them is that they've been long term beneficiaries of the free world's trust in American institutions and that trend has now been shattered probably forever. The US is showing willingness to weaponize just about anything to extract concessions from allies which gives foreign countries an incentive to build and control their own systems for everything strategic (Should have been done in the first place IMO but governments are lazy and don't really care about sovereignty all that much, as long as being part of the empire was comfortable they didn't mind being vassals). For example there is a reluctance of Europe to buy US fighter jets because they come with U.S.-provided software updates, spare parts, and maintenance systems the government could decide to stop honoring. Same thing with satellite communications and SpaceX losing contracts. If you want to be the world leader in providing an infrastructure such as payments of internet cables/satelites you have to stay neutral with that service and make sure people forget they're riding on your system. It comes with the great advantage of accessing a huge TAM and having access to intelligence (10 years ago it was revealed the NSA had Angela Merkel's phone on tap for example) but you've got to play it cool and not make any waves. The second your payment systems are used to freeze assets or something akin to extortion sovereign countries realize they really need their own systems if they care about freedom at all. Visa/Mastercard's growth isn't going to come to a screeching halt overnight but long term I think the good old days for them and for SWIFT are over and they could very well lose some of their world wide market share. TLDR : Visa was a major beneficiary of the US soft power strategy established post WW2 and current administration does not understand how invaluable that is and how long it took to build that trust.

"live to fight another day" definitely resonates, thanks! The issue with the strategy is there is no way to know how much leverage will be permissible by my broker in the depth of a crisis because it's completely up to them to change their requirements. IBKR raised theirs during the covid lows but it's product specific and a complete black box. I take comfort in their fortress balance sheet and I'm thinking broad ETFs and quality mega caps in their clients accounts must be one of the last fuses on the list for them to blow. You know the joke about not having to outrun the bear to survive but only outrun your slowest camp mate? I'm thinking many thousands of meme stock bros account get liquidated well before I'm in any danger. I'm reading myself and it sounds reckless... Let me phrase it differently. If you own 500k of quality stocks, is it really that dangerous to borrow 100-150k to invest a little more in a downturn?

Thanks for taking the time to answer! I value your opinion. The above is my entire net worth. The condo is up for sale but unfortunately I won't see that money until maybe a year from now so I can't count on it in this dip. The 120% number is based on the liquid assets only by the way, so not including the condo. A margin call would certainly suck and I guess IBKR would force sell some of my stocks at a low valuation since I don't have any cash somewhere else to add in that event. The official max leverage on a margin account is 6.6x but of course the requirements vary depending on the volatility of the stocks you own as well as whether IBKR feels tight at the bottom and decides to change the rules. Every time I do an online search to educate myself about margin the stories are about guys using very high multiples like x3 x4 leverage as well as turbos, levered ETFs, complicated derivatives or meme stocks and get killed, therefor the value investing crowd concludes margin is evil and should never be used ever. I rarely see a calm dispassionate discussion on using x1.2-1.5 on a super stable plain vanilla all world ETF and/or some diversified high quality mega caps with no trading in and out once the market is already down 15+%, and it does feel like an underused free lunch.

I'm really excited for this (too much? too soon?) I was 85% stocks 15% bonds at the start of the year and I'm 120% stocks today using IBKR margin account. I hear you all on it's just the beginning keep some dry powder blablabla, no idea where the bottom is and I might be early, but what I don't get the narrative that things are still expensive? For example Alphabet is at a 12 years valuation low. So I'm putting out the bucket, not the thimble. Max I'd be comfortable with would be 130% long with 10% in LEAPS so I'm not fully pedal to the metal yet but close. Please let me know if I'm being an absolute idiot. I think 5 years from now we will look back on some of today's opportunities as the good old days. PS: swapped out of LVMH.

I'm back into LVMH today at Euro 555 with 2.6% of my net worth. It's down ~20% since I sold it a couple months ago so I decided to start reloading the position. Plus I figured it was a cool number for an entry point.

I sold out of Adobe. The barrage of negative opinions here has convinced me that at least it was a more complicated story than I initially thought. What's the point of such a great forum if I don't listen to the wisdom of the crowd? I still think this could do very well given the current depressed price compared to historical multiples and the upcoming increased share of software in the value add away from designers/editors. I like their deep enterprise moat and how they approach AI. If they succeed at charging companies inference tokens in addition to the creative cloud subscriptions it will be huge. But then again so many moving pieces and new often irrationally priced competitors so who knows where it will all end up. It was also taking too much of my brain time in the background. Another sign this was a "too complicated" pile investment. I reallocated the funds to a bit of everything I already owned : Alphabet, Airbnb, Amazon and Patria (Thanks Spek for the idea).

This article is from 2017: https://www.vanityfair.com/news/2017/04/larry-fink-donald-trump Wall Street Giant Larry Fink Says C.E.O.s Are Secretly Worried About Trump The BlackRock founder reveals there are “weaknesses” in the economy nobody wants to admit. “There are weaknesses in this economy that are surprising people,” Fink said [...] “Leaders of companies that I talk to are stepping back and watching and they’re not willing put a lot of money on the line right now until they start to see real economic growth.” Fink said that there is increasing skepticism that Trump’s ambitious agenda [...] “There’s this greater worry that these proposed changes are going to be harder and harder to execute”

On which index? I'm seeing only -10.13% on the sp500. Usually -10% is called a "correction" and -20% a "bear market". I totally agree so far it's just a mild dip, but then again what is the big freak out? A guy who enthusiastically refers to himself as "tariff man" gets elected and... imposes tariffs? My hunch is if we want to see -20% or more something tangible has to break / create a surprise. Could happen. But in the mean time it's just a typical media narrative spin creating a mood swing over the exact same data points that made everyone feel so rosy about the future one month ago

No idea if the bottom is in but typically when a market correction is due to general macro economic and political concerns rather than to a specific unforseen event it's been a good idea to buy the dip because the storytelling eventually reverses and a few years down the road we won't even remember this. Feels like fall 2018.

Adobe, Patria, AirBnB

Ah! It's hard to get the tone of a written post sometimes. I just opened the bonds threads for the first time ever and read the last 3 pages. Now I need an ibuprofen, why would you do this to me Happy Saturday!

Yep. Japanese equities in general seem to have a mind of their own and I actually love how decorrelated from other markets and sometimes from any kind of logic they are, it makes them a great portfolio diversificator. Thanks for the advice Gregmal! Wouldn't my bonds rise in value as their rates go lower?

Hopefully! I'd happily dip a toe back into Nintendo at 8000 Yens. Bought some Amazon on Friday for 3.1% of my net worth. Hoping to get more at $185 which would be a forward EV/EBITDA of 12. Maybe I'm delulu after 15 years of mega cap US tech crushing everything else but I find big tech cheap right now, especially Alphabet, so buying the dip seems like a no brainer.

Thanks for sharing your thoughts! How to you calculate the retail margins? I was considering adding Amazon in order to own the whole US cloud and I agree they hold very very good cards, unfortunately I have no confidence in the management since Bezos and his OG team all left at once and that makes it hard to pull the trigger. -Jassy does not seem like he has it in him to CEO. He has not made a significant mark to the business since taking over or even articulated a clear plan. His annual letter sounded like a list of quarterly numbers a branch manager would send to their boss internally rather than a vision. -They were opening hairdressers and cashier-less stores nobody wanted meanwhile got caught off guard by LLMs. -Their vision for Alexa 2.0 with AI is completely missing the point in my opinion. -They've been circling around healthcare for a decade without ever pulling the trigger -They're behind in self driving cars (Waymo) and robotics (using Nvidia's Omniverse) which they should lead given their logistics roots. -They insist to run like a startup (day 1) which makes a lot of obviously stupid projects be tried wasting billions instead of accepting it's day 2 and they're a mature behemoth like Tim Cook did at Apple. Good news is that Bezos is apparently back full time and he's focusing on AI. He's an actual freaking genius. Never understood why people think Elon is so smart when CEOs like Bezos, Dimon or Nadella run circles around his k-holed brain. Also EV/EBITDA chart looks like a floor has been reached so this could rebound really nicely quickly. Given that they are the incumbent in cloud it just feels like they have more to lose than to gain and I wouldn't like to have the engineers at Microsoft and Google breathing down my neck. Of course the pie can and probably will just grow for all three. There was just a little bit too much hair in the story for me but I do believe Amazon is a buy at these levels.

Added to Alphabet (4%>6%) and started a new position in Microsoft (0%>5%). I want to ride the trend of cloud providers. I don't find their Capex to be as crazy as everyone says when you compare them to the size of the company. They were just under-investing and milking the cow before and now they have a clear path to grow into something big and exciting so they go for it. Rational. Even if AI models end up commodified, serving them will require massive server capacity for LLM inference and for hosting the apps ecosystem built atop. Worse come the worse they decelerate and take a couple of years to grow into their infrastructure investments just like Amazon did when they went too big with their warehouses during COVID, not the end of the world. But that is not at all the scenario I believe into so I'm happy to bet against the bears here. The amount of brain power and talent at these companies we get to own for reasonable-ish valuations is extremely high so good things should keep happening albeit with potholes here and there. Wake me up with the bubble talks if they ever trade at PE 50+

Great thread idea! Thanks for starting it. Not the 50% down you're asking for but AirBnB and Universal Music are two wonderful companies that have IPOed 3-4 years ago at a high price and their stock has gone nowhere while business has grown. I own both. (much more excited about AirBnB, I wouldn't personally add to Universal at today's price)

Why on Earth are we forbidding China to buy chips yet allowing Meta to release their models open source?? If this is such strategic tech protect it all the way! (real question, no expert)