Spooky

Can't tell if you are being sarcastic

The right time to buy is when you can buy a business for less than intrinsic value (with a margin of safety). The rest is noise.

Can you elaborate on what is driving the move in bonds?

I am definitely re-thinking my heavy allocation to US stocks.

One idea from the article that hasn't been discussed much: "The most effective way [to correct global economic imbalances] is likely to be by imposing controls on the US capital account that limit the ability of surplus countries to balance their surpluses by acquiring US assets."

https://on.ft.com/4lqV8Sl Article by Michael Pettis in the FT

Anyone watching this tax bill just passed by the house? Am I going crazy or are they just going to blow out the deficit with $5 trillion of tax cuts and between $4B - $1.5 trillion of undefined savings?

https://on.ft.com/3EieoRn FT has had a series of good articles on the treasury sell-off and the basis trade lately.

Part of this and the sharp sell-off we experienced has to do with some unwinding of the basis trade in US treasuries by hedge funds. Hedge funds have trillions of dollars in this trade and were facing margin calls leading to a dash for cash.

I would take this bet. In 100 years this is the most likely outcome. It is essentially what happened the last 100 years (i.e. the USD losing most of its current value but equities doing great).

Correct.

He's exactly the kind of politician I despise. He doesn't stand for anything, he just wants power.

Thanks for your input. I agree this could be a risk. Especially for Amex specifically, where people shun all things American and Amex's brand even has "American" in it! I'm taking a long term view here in which I believe rationality will prevail over irrationality and the current protectionist policies will be abandoned in time - globalization and trade has brought so much prosperity over the last 80+ years. Over time the economy will grow and the volume of goods and services will grow and Amex can capture a slice of that. Also, Amex has such a good product / business - they offer higher perks and rewards so that people want their cards and then they charge merchants even more than the other companies and retailers feel the pressure to accept it. I'm in Canada and I have an Amex card, my spouse has one and a lot of my friends do as well. When I looked recently Visa's P/E was 34 and MC's 39 so rather pricey still if the growth doesn't continue. Amex's P/E is at roughly 17-18x.

1000% this. Meanwhile the Republicans in the Senate are trying to pass a framework bill with $5 trillion in tax cuts with the spending cuts to be filled in later (never).

Exactly. The market went up by 20% or more in the past two years. It was due for a pull back. The market drops 10% every three years on average. I was expecting a 10-15% correction this year but never would have guessed the cause! Just shows that you can't really predict anything.

Nailed it.

Agree. The US has the biggest, best and most dynamic economy in the world. But even it can't take on the whole world at once and isolate themselves completely.

I really want to own Visa but it still looks too expensive to me, it hasn't dropped that much. I debated buying some but bought Amex instead. It is much cheaper on a p/e basis.

Also bought some AXP

Bought some VOO, BRK.B and FFH.TO at market open.

I'm also adding to VOO as it continues to drop. Any individual names that you are watching Parsad? AXP at about a 17.6 p/e is starting to look interesting. Google at about 18.7 for such a good business seems cheap as well. We also know Fairfax has a lot of earning power locked in from its bond portfolio!

Love the post and the photo! This is exactly how I feel. Got 25% of my net worth in BRK.

Can't wait for the annual meeting this year.

Ya keep some dry powder in case some real bargains pop up.