Bonds!

[Blake Hampton]

When Jamie Dimon is warning that credit is a bad risk, and Warren Buffett keeps reminding everyone not to "bet against America," you better buckle up.

 

Jamie Dimon Says Tariffs Might Inflict More Economic Pain Than Investors Realize - WSJ

 

Edited May 20, 2025 by Blake Hampton

[Marco Van Basten]

Just now, Blake Hampton said:

When Jamie Dimon is warning that credit is a bad risk, and Warren Buffett keeps reminding everyone not to "bet against America," you better buckle up.

You need to remember that Jamie Dimon is usually concerned/bearish.  If you read his speeches going back 20+ years, he is almost always worried, which makes sense for someone who is running a bank levered 10x+.  He is also essentially saying that he would not be surprised by a 15% stock market drop.  However, I would not be surprised by a 20% stock market drop, we have had at least a dozen of them in the past forty years.  There is a difference however between saying that I would not be surprised and that something will happen.  (I would not be surprised if my 18 year old nephew knocks up his 18 year old girlfriend, but I would put the odds on that at 1%.)  A year or two ago, he said that he was prepared for a range of 2-8% rates on a 10 year bond.  Now what would have been the probabilities that he would have placed on either scenario would be more useful.  

[Gregmal]

The appeals to authority are relentless 

[Blake Hampton]

Complacency:

 

14 minutes ago, Gregmal said:

The appeals to authority are relentless 

 

[Blake Hampton]

24 minutes ago, Marco Van Basten said:

You need to remember that Jamie Dimon is usually concerned/bearish.  If you read his speeches going back 20+ years, he is almost always worried, which makes sense for someone who is running a bank levered 10x+.  He is also essentially saying that he would not be surprised by a 15% stock market drop.  However, I would not be surprised by a 20% stock market drop, we have had at least a dozen of them in the past forty years.  There is a difference however between saying that I would not be surprised and that something will happen.  (I would not be surprised if my 18 year old nephew knocks up his 18 year old girlfriend, but I would put the odds on that at 1%.)  A year or two ago, he said that he was prepared for a range of 2-8% rates on a 10 year bond.  Now what would have been the probabilities that he would have placed on either scenario would be more useful.  

 

The last 20 years have been a period of financial insanity. Twenty years ago, back in 2005, we were in the midst of the subprime mortgage bubble that nearly caused a systemic collapse. Since then, the U.S. government has been gradually trapping itself into an increasingly dangerous financial position, one that's almost certain to lead to a serious crisis.

 

I think he's simply being rational during a time of mass complacency.

 

Edited May 20, 2025 by Blake Hampton

[73 Reds]

11 minutes ago, Blake Hampton said:

 

The last 20 years have been a period of financial insanity. Twenty years ago, back in 2005, we were in the midst of the subprime mortgage bubble that nearly caused a systemic collapse. Since then, the U.S. government has been gradually trapping itself into an increasingly dangerous financial position, one that's almost certain to lead to a serious crisis.

 

I think he's simply being rational during a time of mass complacency.

 

He's a banker.  They usually make for lousy investors.

[Gregmal]

17 minutes ago, Blake Hampton said:

The last 20 years have been a period of financial insanity.

LOL that's literally 2/3 of what one should consider their entire investing timeline. Fortunes have been made many times over during this stretch. Even if you did little else but DCA the indexes. But yea, be fearful when others are....breathing. 

[Blake Hampton]

If you have two extremely destabilizing events—2008 and 2020—where the U.S. government steps up in a huge way to save the system, and everything else in the interim is full of more crazy debts, deficits, bank regulations, and market bubbles, what result do you think will ultimately prevail? It’s common fucking sense.

 

What has happened in banking—banks taking on too much interest-rate risk—is insane.

The current valuations of both stocks and real estate are insane.

These massive sovereign debts and deficits, as well as the politicians creating them, are insane.

The GFC and market troubles during the pandemic were insane.

 

If you can look at all of this and conclude that our country is in good financial health, I don’t know what else to tell you. There is very likely nothing that could make you understand the severity of the situation outside of crisis itself—and by then, it will be too late to do anything.

 

I firmly believe that lack of understanding is what’s ultimately led us to all of this. I referenced how 2008 almost ended in financial collapse—because it did—but our government, the almighty manager of the U.S. dollar, came to the rescue by bailing out the system. We ultimately had the same sort of thing happen in 2020. Great. Calamity avoided, right?

 

The problem is that both the populace and legislators never learned and went right back to doing the exact same retarded shit. It's almost like karma, except they just delayed it onto their kids.

 

Edited May 20, 2025 by Blake Hampton

[Blake Hampton]

"...dancing in a room in which the clocks have no hands."

[Gregmal]

6 minutes ago, Blake Hampton said:

The problem is that both the populace and legislators never learned and went right back to doing the exact same retarded shit. It's almost like karma, except they just delayed it onto their kids.

You were obviously too young to have applied for a mortgage or any sort of credit facility for the decade following the GFC. Behavior absolutely changed. 

[Castanza]

22 minutes ago, Blake Hampton said:

I think he's simply being rational during a time of mass complacency.

 

This is a board of active investors....The only one being complacent here is you....you're in you're early 20's talking about oil as if man just discovered it; and theses that could easily take a lifetime to play out if they happen at all! Now you're bitching about the last 20 years of US equities because.....? 

[Gregmal]

Yup. Look at 2022 as a good example of some of whats unfolded with the experts and academics. "Rate hikes were a must" and the obvious play was to "short housing" because housing "always" crashes when rates go up. And yea, "get long banks" because banks will make tons of money with higher rates. And this was 100% the correct textbook interpretation of the macro. But as always, those tools weren't living in reality and using relevant applications of the real world. And they got smoked. But!!!! Ask them today? And well, it's "obviously because people were trapped into low rate mortgages with housing in record short supply, and banks had too much duration risk".....yea, GOATs of the armchair Monday morning QB these experts are. 

 

That's why overtime, you learn to ignore people whose broken record forecasts are regularly wrong, regardless of how well they can regurgitate whats "already happened". And also that the smartest sounding people, often macro or bearish folks, when you view their track records over time, judged solely on the results, really end up being some of the dumbest out there. 

[dealraker]

39 minutes ago, Blake Hampton said:

"...dancing in a room in which the clocks have no hands."

Blake, as I wrote to you in messages, at your age any degree of feeling disenchanted with valuations is suggestive of mismanaged attention focus.  I also mentioned following Parsad.  I keep a little notebook of my followings, those decisions I either make or expand based on someone else's posts and opinions.  While I have owned Facebook/Meta since the IPO and even added as low as 11 per share, my returns per my thoughts and decisions are in the high teens.  By far the majority of my financial outcome in this stock was "energized" by reading the simple crazy clarified script provided by Parsad and those very significant outlays have a near triple digit annualized outcome thus far.  

 

Not too much behind that is my additions to Fairfax (a multi decade thingy) based of course on Viking's endless energy towards it.  And keep in mind as some situations today unfold you do have opportunities currently given we are basically all literally tiny investors, we have endless opportunities.

 

What is interesting even now is that while I consider myself absolutely nothing special as to investing, Angela and I have well over 100 stocks and not a single one carries a loss...or for that matter anywhere close to a loss.  I had initially bought both Cushman Wakefield and First Solar at prices where shortly after they exposed losses, yet adding at lower prices now gives 20 plus ups.  Neither will be ignored if further declines come.

 

In other words give us some ideas as to investing along with the dooms and dungeons.  Isn't the oil business your competence?  Seems we are rotating in and out of a decent time to produce ideas within the energy world.

 

My view is that our country is currently led by a man with zero financial skill.  Regardless...

Edited May 20, 2025 by dealraker

[Intelligent_Investor]

As someone pretty young myself, I think its pointless stressing over the financial incompetence of our politicians - if the system collapses we are fucked anyways and the returns on our investment portfolios are the least of our concerns. The more important thing is just to have the skills to be useful to society and generate value regardless of economic conditions - as Charlie Munger says being able to swim as well as you can even when the tide is against you.

[thowed]

36 minutes ago, Gregmal said:

Yup. Look at 2022 as a good example of some of whats unfolded with the experts and academics. "Rate hikes were a must" and the obvious play was to "short housing" because housing "always" crashes when rates go up. And yea, "get long banks" because banks will make tons of money with higher rates. And this was 100% the correct textbook interpretation of the macro. But as always, those tools weren't living in reality and using relevant applications of the real world. And they got smoked. But!!!! Ask them today? And well, it's "obviously because people were trapped into low rate mortgages with housing in record short supply, and banks had too much duration risk".....yea, GOATs of the armchair Monday morning QB these experts are. 

 

That's why overtime, you learn to ignore people whose broken record forecasts are regularly wrong, regardless of how well they can regurgitate whats "already happened". And also that the smartest sounding people, often macro or bearish folks, when you view their track records over time, judged solely on the results, really end up being some of the dumbest out there. 

 

Ha, I wish I'd known this when I started investing.

 

Probably because I'm naturally cautious, I missed a number of years of having decent returns because I listened to the 'smart people' warning of terrible things that would happen (and this being post 2008 - at that point their records looked better than many).  They don't look so smart now.

 

Obviously I can't predict the future, but I have learned from this board that there's always something to do (as per Peter Cundill), though you may have to dig around.

 

If I was to advise my younger self, I'd say - put a chunk of money into a S&P500 tracker every month, and see if your otherwise cautious outlook is outperforming it.  Natural hedge for the pessimist.

 

[73 Reds]

1 hour ago, Blake Hampton said:

"...dancing in a room in which the clocks have no hands."

Blake, I wish I was as smart as you when I was your age.  Hell, I wish I were as smart as you now!  But at times you can outsmart yourself.  What I've learned over a lifetime is financial/investment success has nothing to do with macro events and so-called experts.  Like @Dealraker, the stocks I have owned for decades all have enormous built-up capital gains.  When folks like some posters here do all the work and make compelling cases for certain equities, it is at least worth a read and some further inquiry.  Yet even if your macro focus is all doom and gloom you don't even need to invest in public markets.  Some of the most successful folks I know are far from the smartest.  They were really good at one or two things like auto parts, bagels and mattresses and made fortunes.  Others in real estate did the same.  You think the credit markets are a horrible bet?  Maybe so but the [private] hard money market has never been better.  There is always something out there to invest in; you simply have to overcome those factors that are immaterial to your own success and then look for what will make you money.  

Edited May 20, 2025 by 73 Reds
spelling

[Malmqky]

Everything is held together by duct tape, sticks, and glue. Our politicians are fiscally subpar.
 

Welcome to the real world.

 

Still, it pays to be an optimist. I bet even with massive recessions, the investor who’s optimistic, opportunistic, and heavily invested in equities outperforms the bearish, cash-hoarding (aka market timing) investor who gets caught up in intellectual theories instead of actually making money.

[vinod1]

1 hour ago, Blake Hampton said:

If you have two extremely destabilizing events—2008 and 2020—where the U.S. government steps up in a huge way to save the system, and everything else in the interim is full of more crazy debts, deficits, bank regulations, and market bubbles, what result do you think will ultimately prevail? It’s common fucking sense.

 

What has happened in banking—banks taking on too much interest-rate risk—is insane.

The current valuations of both stocks and real estate are insane.

These massive sovereign debts and deficits, as well as the politicians creating them, are insane.

The GFC and market troubles during the pandemic were insane.

 

If you can look at all of this and conclude that our country is in good financial health, I don’t know what else to tell you. There is very likely nothing that could make you understand the severity of the situation outside of crisis itself—and by then, it will be too late to do anything.

 

I firmly believe that lack of understanding is what’s ultimately led us to all of this. I referenced how 2008 almost ended in financial collapse—because it did—but our government, the almighty manager of the U.S. dollar, came to the rescue by bailing out the system. We ultimately had the same sort of thing happen in 2020. Great. Calamity avoided, right?

 

The problem is that both the populace and legislators never learned and went right back to doing the exact same retarded shit. It's almost like karma, except they just delayed it onto their kids.

 

 

In my 25 years of investing, there is a fun game I try to play when looking at a new fund manager or investor: Without looking at their returns, I read their letters or writings and try to predict their returns. Now, it has become so easy to predict that it is not interesting anymore. It does not matter how deep the analysis is or how much detail they provide. The rule I found that has been very consistent is this:

 

If a fund manager talks about macro, they will underperform the market. The more the letter is about macro, the greater the underperformance. 

 

Warren Buffett talks about business, and Hussman talks about macro. Look at their performance.

 

In one of the best bull markets of all time in the last 15 years, Hussman managed to lose money. 

 

Your choice is between these two. Pick carefully.

 

Wishing you the very best!

 

Vinod

 

Edited May 20, 2025 by vinod1

[Gregmal]

lol plus, the sooner we stop starting everything with “so and so says”….the better. 

[vinod1]

I would also highly recommend reading Matt Ridley's book The Rational Optimist: How Prosperity Evolves

 

Vinod

 

 

[gfp]

1 hour ago, dealraker said:

at your age any degree of feeling disenchanted with valuations is suggestive of mismanaged attention focus

 

+1   !!

[Kuhndan]

2 hours ago, vinod1 said:

 

In my 25 years of investing, there is a fun game I try to play when looking at a new fund manager or investor: Without looking at their returns, I read their letters or writings and try to predict their returns. Now, it has become so easy to predict that it is not interesting anymore. It does not matter how deep the analysis is or how much detail they provide. The rule I found that has been very consistent is this:

 

If a fund manager talks about macro, they will underperform the market. The more the letter is about macro, the greater the underperformance. 

 

Warren Buffett talks about business, and Hussman talks about macro. Look at their performance.

 

In one of the best bull markets of all time in the last 15 years, Hussman managed to lose money. 

 

Your choice is between these two. Pick carefully.

 

Wishing you the very best!

 

Vinod

 

So true. If an investment letter doesn’t lead off with a summary of their historic investment results, I think there is a very good chance they have underperformed the market.

[zzzyx]

A lot of great advice for Blake and the younger set on Page 35 of this thread! 

[rogermunibond]

@wabuffo is precisely on to the crux of the matter.  US M2 money supply + Euro dollar market USD M2 equivalent + PBOC dollar supply + JPY dollar supply + any other bit players (SNB, BOI etc) would give us something approximating the total supply of US dollars in global circulation.

 

Not sure if such a figure can be calcuated but global M2 from the four big currency areas is something like $100+T - and US dollars are likely at least half of that if not more.

 

Despite the current administration, the ties that US dollars have with the RoW economies is only growing, not likely shrinking, even if trade shrinks.

 

 

[gfp]

And what makes eurodollar market size basically impossible to measure / track is that these synthetic USD instruments are extremely elastic - the growth and contraction of this part of USD "money" is not controlled by the US government or the Fed.  Nobody I am aware of even attempts to track or measure the size anymore.  The Fed gave up on their incomplete measurement many years ago.