Have We Hit The Top?

[John Hjorth]

51 minutes ago, UK said:

+1. Perhaps also could be not so short term thing:)

 

Agreed, @UK,

 

What is trend related, and what is volatity?

 

Daily volatility has for me evolved to become an, average, and over time, measure of success, when one look at it, measured and denominated in personally chosen functional currency, presented to me thereby in nominal DKK on our investment banks user interface, main section, centered both vertically and horisontally on the screen, thrown at my nose, every time I log on, to stimulate me to trade.

 

On a day like this, the figure in DKK the UI is throwing my way is a figure, that is two and half times my last montly salary ex. bonus.

 

Why the hell was I so dumb not to start to become a saving cheapskate 20, 25, even 30 or more years ago, in stead of being a member of the concept called 'the 'Danish consumer' [read : crowd]?

[Junior R]

the one part that's a mystery is do we give stocks a higher multiple on forward earnings just cause of Trump...Many stocks are over priced on a multiple 

[Spekulatius]

2 hours ago, Junior R said:

the one part that's a mystery is do we give stocks a higher multiple on forward earnings just cause of Trump...Many stocks are over priced on a multiple 

Trump is going to cause a lot more volatility. The sleepy days of the Biden admin are gone.

[Spekulatius]

WMT and NVDA PE are almost the same. I am not sure what’s going on here or where the bubble is:

 

[Junior R]

29 minutes ago, Spekulatius said:

WMT and NVDA PE are almost the same. I am not sure what’s going on here or where the bubble is:

 

If you click on 10years what does it show as AVG for WMT ...I think its around 25 to 28 last I checked...NVDA EPS would go down in the future when Hyperscale's use the own in home grown chips (which they are working on) or another vendor...Maybe 3+ Q away

[Junior R]

Quote

Stocks Are Expensive - Torsten Sløk - Apollo Chief Economist

Quote

When growth is strong, corporate earnings are high. When growth is weak, corporate earnings are low. This makes it difficult to find out if companies are cheap or expensive.

One way to analyze if stocks are cheap or expensive is to remove the business cycle by taking the 10-year average of earnings, and doing so shows that stocks are very expensive at the moment.

Specifically, the cyclically adjusted price earnings ratio at 38 is near all-time highs, significantly above its long-term average at 17, see chart below.

 

https://www.apolloacademy.com/stocks-are-expensive/

[Spekulatius]

We are pretty close to 1999/2000 sentiment with record high equity valuations - not just tech (see WMT, FICO etc), US exceptionalism, large cap vs small/mid cap outperformance.

 

Then on the other side, lot of other country stock markets are very cheap, Europe, Latam maybe China or even in US markets, if you get off the beaten tracks. I don’t know if we are in 1998, 1999 or 2000 but ai think we are closer to the top then the bottom in sentiment here, that’s for sure (to paraphrase Howard Marks)

[Junior R]

37 minutes ago, Spekulatius said:

We are pretty close to 1999/2000 sentiment with record high equity valuations - not just tech (see WMT, FICO etc), US exceptionalism, large cap vs small/mid cap outperformance.

 

Then on the other side, lot of other country stock markets are very cheap, Europe, Latam maybe China or even in US markets, if you get off the beaten tracks. I don’t know if we are in 1998, 1999 or 2000 but ai think we are closer to the top then the bottom in sentiment here, that’s for sure (to paraphrase Howard Marks)

lol you forgot one 1929 ...China is hard to invest in until the Taiwan situation is solved...Even assets managers like APO went from really undervalued in Aug to now over valued lol

 

in the US market health care is cheap as long as RFK doesn't do something that impacts them

 

If NVDA continues to fall it might single other stock downturns 

 

The best thing that can happen for Trump is stocks to drop 5 to 20% before his inauguration and he can take quick win for the market going back up

Edited November 24, 2024 by Junior R

[frommi]

On 11/22/2024 at 5:25 PM, John Hjorth said:

Great [short term] by now to be a Dane [or European [EUR based], for that matter] these days, with a fairly high percentage of capital already invested in USA, North America [still posted while I'm not a currrency arbitrage guy].

 

As a european I started to hedge my USD exposure and limit investments in the US. I doubt this currency trend will hold, over the past 30 years the USD tanked during every republican president, i doubt that this time is different.

[Red Lion]

11 hours ago, frommi said:

As a european I started to hedge my USD exposure and limit investments in the US. I doubt this currency trend will hold, over the past 30 years the USD tanked during every republican president, i doubt that this time is different.

 

What investments do you think would do well if the USD tanks? Other than FX? Maybe PM. 

[Junior R]

we might have hit a top in the short term with Trump Tariffs just announced.,,, 

[Dinar]

1 hour ago, Junior R said:

we might have hit a top in the short term with Trump Tariffs just announced.,,, 

Actually, not at all.  What he said was the tariffs will stay until the countries stop the flow of drugs and migrants to our borders.  Seems reasonable to me.  The ball is in Mexico's court.  

[Junior R]

Just now, Dinar said:

Actually, not at all.  What he said was the tariffs will stay until the countries stop the flow of drugs and migrants to our borders.  Seems reasonable to me.  The ball is in Mexico's court.  

Yup but short term this will impact market sentiment 

[Dinar]

51 minutes ago, Junior R said:

Yup but short term this will impact market sentiment 

Why?  It is a negotiating tactic to make Mexico and Canada stop flow of illegals & drugs.  Now if only the headlines (looking at you WSJ) would reflect what Trump actually stated.  (Surprisingly NYT headline was actually accurate and the Journal's was misleading.)

[TwoCitiesCapital]

Mexico was going to pay for the wall, right?

 

The tossing out of NAFTA and renegotiation was supposed to correct trade imbalances, right? 

 

China is going to pay the tariffs, right?

 

And now we'll drop tariffs against Canada after whatever drugs flowing into the country from Canada stop, right? 

 

What drugs are even an issue from Canada? 

 

More horse sh*t straight for the mouth of a serial liar - but people continue to believe him.

Edited November 26, 2024 by TwoCitiesCapital

[mcliu]

2 minutes ago, TwoCitiesCapital said:

What drugs are even an issue from Canada? 

We have a pretty big fentanyl issue in Canada. Apparently during covid the fentanyl stopped flowing from China.

So the gangs decided to build labs in Canada instead.

As the market saturated in Canada and drug prices started dropping, we've become a net exporter of fentanyl.

https://www.cbc.ca/news/politics/fentanyl-canada-export-1.7030758

https://www.cbc.ca/player/play/video/9.6553939

[TwoCitiesCapital]

21 minutes ago, mcliu said:

We have a pretty big fentanyl issue in Canada. Apparently during covid the fentanyl stopped flowing from China.

So the gangs decided to build labs in Canada instead.

As the market saturated in Canada and drug prices started dropping, we've become a net exporter of fentanyl.

https://www.cbc.ca/news/politics/fentanyl-canada-export-1.7030758

https://www.cbc.ca/player/play/video/9.6553939

 

Most of the information I see suggests it still comes from China in the US - though those sources are from 2020 and 2021. 

 

There is an article regarding super sites in Canada from 2023, but says there is little evidence to suggest it's flowing south to the US so

 

I don't really know either way other than to know that regulating drugs has never really been successful and I don't expect tariffs to be more successful than threats jail time, ruining your life, and OD'ing or other methods attempted in the past - so they're probably here to stay regardless of where the drugs are coming from. 

Edited November 26, 2024 by TwoCitiesCapital

[frommi]

10 hours ago, Red Lion said:

 

What investments do you think would do well if the USD tanks? Other than FX? Maybe PM. 

PM,MDLZ,PEP,LKQ,TAP. But european companies like STO:EVO, CPH:STG or IMB, BATS, DCC are very cheap so i also bet on them.

[Ulti]

https://www.reuters.com/investigates/special-report/usa-fentanyl-supply-chain-shipping/

Btween tariffs and a federal workforce that looks to be steady for the last 60 years; it’s going to be an interesting next 4 years

 

[UK]

On 11/25/2024 at 9:22 AM, frommi said:

As a european I started to hedge my USD exposure and limit investments in the US. I doubt this currency trend will hold, over the past 30 years the USD tanked during every republican president, i doubt that this time is different.

 

https://www.bloomberg.com/opinion/articles/2024-11-26/dollar-euro-parity-winter-is-coming-for-europe-in-more-ways-than-one?srnd=homepage-europe

 

[frommi]

56 minutes ago, UK said:

 

https://www.bloomberg.com/opinion/articles/2024-11-26/dollar-euro-parity-winter-is-coming-for-europe-in-more-ways-than-one?srnd=homepage-europe

 

When its in the news, everybody knows it already. Lets see what happens. Long USD is the trade since 2009, so probably this analyst is VERY late to the party. And since i am hedged, the direction the currencies take is not that important anymore. I just don't want to wake up one day and have a 10% loss in my portfolio because of the currency, for example because the war in Ukraine ended or something like that.

[UK]

35 minutes ago, frommi said:

When its in the news, everybody knows it already. Lets see what happens. Long USD is the trade since 2009, so probably this analyst is VERY late to the party. And since i am hedged, the direction the currencies take is not that important anymore. I just don't want to wake up one day and have a 10% loss in my portfolio because of the currency, for example because the war in Ukraine ended or something like that.

Yes, I am not sure either and really have no idea or big conviction. Could you explain how do you hedge it? 

[frommi]

1 hour ago, UK said:

Yes, I am not sure either and really have no idea or big conviction. Could you explain how do you hedge it? 

Tried different stuff and ended up buying options on the future. Ideally i would just go short the currency in the IB account, but they don't let me do that anymore (probably because of EU regulations). Buying futures you need cash in the account in case the future moves against you (otherwise you get margin called), so buying options was the only way to do it for me.

[Spooky]

As a Canadian, blanket tariffs are a disaster and will hurt the US as well. The trading relationship between Canada and the United States is the most comprehensive in the world, with the two countries as each other's largest trade partners

[Castanza]

19 minutes ago, Spooky said:

As a Canadian, blanket tariffs are a disaster and will hurt the US as well. The trading relationship between Canada and the United States is the most comprehensive in the world, with the two countries as each other's largest trade partners

 

Much rather see something like Buffett's Import Certificate model applied. Trade hubs are shifting though, the deficit with China has gone down the last decade. More manufacturing is moving to other markets etc. But manufacturing is not coming back tot eh US in any significant way (IC help here). Any way you slice it, there is going to be some pain for the US consumer the next 10+ years. The question will be at the end....was the pain worth it? In other words, did we address the situation correctly?

 

Whoever is in office will have a hard time in this environment imo....ultimately I bet taxes and prices go up.