Where are we at in this downturn?

[73 Reds]

3 hours ago, Parsad said:

 

Hang in there.  Don't make emotional decisions.  Use this period to learn more.  Cheers!

Good advice.  Buffett/Munger suggest that if you are not prepared for a 50% drawdown every so often you shouldn't be in stocks.  My own suggestion:  Don't change anything that works for you.  

[Sinbius]

39 minutes ago, 73 Reds said:

Good advice.  Buffett/Munger suggest that if you are not prepared for a 50% drawdown every so often you shouldn't be in stocks.  My own suggestion:  Don't change anything that works for you.  

 

Yes but he is all in cash when it happens  ....(...I know I know...just saying....)

[73 Reds]

1 minute ago, Sinbius said:

 

Yes but he is all in cash when it happens  ....(...I know I know...just saying....)

Maybe.  The point is, take this opportunity to learn about yourself.  If your results were subpar until now and you don't have any liquidity now, something probably needs to change.  Everyone makes mistakes; learning from them and not repeating them goes a long way.   

[Sinbius]

My results are above markets until now and I have 25% in cash mainly not USD...but I'm still trying to do it better...

Edited April 7, 2025 by Sinbius

[Jaygo]

I think we are set for a decent bounce, maybe in the next day or two

 

I still expect downward pressure on the Global markets as reality of sand in the gears of trade sets in but my guess is the bounce gets us back about 8% with some chop. 

 

Likely lower in the summer but not too bad. I think the talk of 40-50% is pretty silly. This is a dust up, nothing more. 

 

At the end of the day China needs the USA just like the USA needs China. The two combined cause stability in the populations. Americans get cheap shit and the Chinese get to put a billion people to work in factories rather than cause trouble. One hand washes the other. 

 

The only population that consumes enough is the good ol USA and that's not changing any time soon. Countries who have any idea of what's up will bend the knee enough to appease dear leader, he gets a win and everybody gets back to work. 

 

Does anyone really think China and Germany can increase trade without stepping on each others toes? there is no alternative to the USA trade deficit. Fake money for real shit, then the fake money becomes real once it gets to China, Europe or SE Asia. Then they spend it on more real shit like cement, vacuums and refrigerators. The Ponzi must go on!

 

 

[Intelligent_Investor]

As our dear friend Winston Churchill once said, "This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

[73 Reds]

3 minutes ago, Intelligent_Investor said:

As our dear friend Winston Churchill once said, "This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

So you see victory ahead?

[Intelligent_Investor]

The beautiful thing about capitalism is that its self-correcting. Whatever happens will eventually balance out

[73 Reds]

2 minutes ago, Intelligent_Investor said:

The beautiful thing about capitalism is that its self-correcting. Whatever happens will eventually balance out

Ah, a pragmatist.  So rare around here lately.

[brobro777]

44 minutes ago, Jaygo said:

I think we are set for a decent bounce, maybe in the next day or two

 

I still expect downward pressure on the Global markets as reality of sand in the gears of trade sets in but my guess is the bounce gets us back about 8% with some chop. 

 

Likely lower in the summer but not too bad. I think the talk of 40-50% is pretty silly. This is a dust up, nothing more. 

 

At the end of the day China needs the USA just like the USA needs China. The two combined cause stability in the populations. Americans get cheap shit and the Chinese get to put a billion people to work in factories rather than cause trouble. One hand washes the other. 

 

The only population that consumes enough is the good ol USA and that's not changing any time soon. Countries who have any idea of what's up will bend the knee enough to appease dear leader, he gets a win and everybody gets back to work. 

 

Does anyone really think China and Germany can increase trade without stepping on each others toes? there is no alternative to the USA trade deficit. Fake money for real shit, then the fake money becomes real once it gets to China, Europe or SE Asia. Then they spend it on more real shit like cement, vacuums and refrigerators. The Ponzi must go on!

 

 

years ago I was watching late night television and this ad came up for this thing called Potty Putter, which allows you to practice your putting while you're sitting on the toilet taking a dump

 

I am proud to say that I ordered one, but got a response saying they don't have one in stock

 

That's America baby, and I have no problem with Chinese dudes making my Potty Putter

 

Haha

 

[Parsad]

1 hour ago, Sinbius said:

 

Yes but he is all in cash when it happens  ....(...I know I know...just saying....)

 

So just own Berkshire or an equivalent.  Takes all of the psychology out of it.  Cheers!

[73 Reds]

3 minutes ago, Parsad said:

 

So just own Berkshire or an equivalent.  Takes all of the psychology out of it.  Cheers!

Berkshire or an equivalent?  Blasphemy!!!

[Parsad]

1 minute ago, 73 Reds said:

Berkshire or an equivalent?  Blasphemy!!!

 

Ok, not equivalent...but similar...FFH, MKL, etc.  Cheers!

[73 Reds]

1 minute ago, Parsad said:

 

Ok, not equivalent...but similar...FFH, MKL, etc.  Cheers!

That's better.  No need to cancel my COBF membership. 

[Santayana]

7 hours ago, Luke said:

How do you guys feel having your net worth wracked?

You're making big assumptions about other people's portfolios.

[mattee2264]

Yeah we saw this during the dress rehearsal with Canada and Mexico. Trump will probably give extensions to countries that are willing to come to the negotiating table and reward those that don't escalate. Absolutely the rates he announced are not set in stone and it is standard Trump to ask for the moon and then settle for a lot less. So there will be relief rallies. 

 

However a trade war of uncertain duration or magnitude is likely to be very disruptive to business planning and if businesses respond by cutting investments and cutting staff that will in turn have negative multiplier effects and will cause the economy to deteriorate. And unlike previous downturns there isn't a huge amount of dry powder. Fed is taking a wait and see approach worried about the inflationary impact of tariffs. Trump administration is trying to balance the budget and we already have multi-trillion dollar deficits so difficult to add a bunch of fiscal stimulus to the mix. Meanwhile higher for longer interest rates create issues for companies with maturing debt they will have to refinance and there are negative wealth effects from falling asset prices and it is reasonable to expect that there will be a slightly higher risk premium with Trump throwing his weight around and wrecking havoc. 

 

[Gregmal]

11 minutes ago, Santayana said:

You're making big assumptions about other people's portfolios.

Yup. That and also if a few days or weeks in the market make you think like that you shouldn’t be in the market at all. It shows a complete lack of grasp for the primary purpose which is to participate in the ownership of businesses. 
 

Can we imagine Warren at the next AGM lamenting how he missed the 15% sell then rebuy opportunity last week? lol it’s so dumb but hey, now everyone’s doing it. 

[Spooky]

2 hours ago, Jaygo said:

I think we are set for a decent bounce, maybe in the next day or two

 

I still expect downward pressure on the Global markets as reality of sand in the gears of trade sets in but my guess is the bounce gets us back about 8% with some chop. 

 

Likely lower in the summer but not too bad. I think the talk of 40-50% is pretty silly. This is a dust up, nothing more. 

 

At the end of the day China needs the USA just like the USA needs China. The two combined cause stability in the populations. Americans get cheap shit and the Chinese get to put a billion people to work in factories rather than cause trouble. One hand washes the other. 

 

The only population that consumes enough is the good ol USA and that's not changing any time soon. Countries who have any idea of what's up will bend the knee enough to appease dear leader, he gets a win and everybody gets back to work. 

 

Does anyone really think China and Germany can increase trade without stepping on each others toes? there is no alternative to the USA trade deficit. Fake money for real shit, then the fake money becomes real once it gets to China, Europe or SE Asia. Then they spend it on more real shit like cement, vacuums and refrigerators. The Ponzi must go on!

 

 

 

Nailed it.

[Gregmal]

Buffet at the AGM “you know, thank god Geico is private, because I really woulda been mad if it was a public trading stock and it went down a lot last month!”…

[Spooky]

27 minutes ago, Gregmal said:

Yup. That and also if a few days or weeks in the market make you think like that you shouldn’t be in the market at all. It shows a complete lack of grasp for the primary purpose which is to participate in the ownership of businesses. 
 

Can we imagine Warren at the next AGM lamenting how he missed the 15% sell then rebuy opportunity last week? lol it’s so dumb but hey, now everyone’s doing it. 

 

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.

[Pellom]

My armchair thesis is a lot of the current sell-off is the market using any excuse to burn off the overvaluation (speaking from an SP500 viewpoint.) 

 

Although some will argue the market is forward looking and pricing for 6-12-18 months from now, my guess is there will be more pain ahead once companies actually report slowing growth due to tariffs and uncertainty. 

 

No point in trying to time it, though. I'm buying when and where I can. 

[Blake Hampton]

"The United States has had a rather healthy and steady economy for years, although it was already weakening as I began writing this letter — and that was before the recent tariff announcement. 

 

The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and “trade wars,” ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility.

 

Before I get into some of these issues, there is a really big “BUT” about what is considered America’s exceptional economic performance: Part of this performance has been driven by extraordinary deficit spending and the quantitative easing that took place. Since COVID-19, the federal government has borrowed and spent almost $11 trillion, and the Federal Reserve bought over $4.5 trillion in securities, creating huge liquidity in the financial system. Some of the results are exactly what you would expect: strong growth, inflation and higher corporate profits due to all the spending. But the U.S. deficit remains very large at just below $2 trillion, or 6.6% of GDP, which is the highest peacetime level ever not driven by recessionary needs (as, for example, during the pandemic). This high U.S. deficit also is associated with large trade deficits and is happening while our debt-to-GDP ratio is already over 100%, which is another peacetime high. The rest of the world has elevated debt levels and high fiscal deficits as well, although few as large as those of the United States. These large deficits are not sustainable—I do not know whether it will cause a real problem in six months or six years—the sooner we deal with it, the better.

 

Tariffs and non-tariff barriers have always been hotly contested in trade negotiation. Non-tariff barriers come in many forms and have been growing over time (regulatory barriers, government procurement, export subsidies, food restrictions, etc.). Recently, value-added taxes (VAT) have entered this debate. Economists generally see VATs as a tax on domestic expenditures that does not discriminate on the source of spending. But since the VAT does not tax exports, some see them as a non-tariff trade barrier. In any event, their effect on trade may not be very large.

 

Whatever you think of the legitimate reasons for the newly announced tariffs—and, of course, there are some—or the long-term effect, good or bad, there are likely to be important short-term effects. As for the short-term, we are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products. How this plays out on different products will partially depend on their substitutability and price elasticity. Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.

 

There are many uncertainties surrounding the new tariff policy: the potential retaliatory actions, including on services, by other countries, the effect on confidence, the impact on investments and capital flows, the effect on corporate profits and the possible effect on the U.S. dollar. The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse. In the short run, I see this as one large additional straw on the camel’s back.

 

I am hoping that after negotiations, the long-term effect will have some positive benefits for the United States. My most serious concern is how this will affect America’s long-term economic alliances, as I have written about in the first section.

 

Our economy also faces the unknown effects of quantitative tightening—you must remember we have never had this much quantitative easing and, therefore, quantitative tightening before. This introduces another element of uncertainty, which, in my view—particularly in conjunction with the restrictions put on market making by primary dealers—will likely lead to much higher volatility in the treasury markets. This higher volatility is not necessarily bad for JPMorgan Chase, but it is not particularly good for the capital markets. Fortunately, there are many regulatory changes now being discussed that could ameliorate the situation.

 

While inflation has come down, most of what I see in the future is inflationary: continued high fiscal deficits, the remilitarization of the world and the need for infrastructure investment, including the green economy and the restructuring of trade and tariffs.

 

Another critical point: All these factors will impact interest rates. While the Federal Reserve essentially controls short-term interest rates, it does not effectively control 10-year interest rates. The Fed can take actions that can affect the 10-year interest rate in the short run, but, ultimately, the 10-year rate will be based upon inflation, the strength of the U.S. economy and expectations of the future value of the dollar, and the supply and global demand for long-term treasuries. All things being equal, the slower the growth, the lower the interest rates, and the higher the inflation, the higher the interest rates. This tug-of-war can go on for some time, but it’s good to remember that in the stagflation of the 1970s, recessions did not stop the inexorable trend of rising rates. While interest rates have come down recently due to the weakening dollar, the risk off trade and the prospect of slower growth, this trend could still reverse.

 

Moreover, it is worth noting that we enter this time of uncertainty with high equity and debt prices, even after the recent decline. No matter how you measure it, equity valuations are still well above their historical averages. And credit spreads are still near the low end of these same ranges. Markets still seem to be pricing assets with the assumption that we will continue to have a fairly soft landing. I am not so sure.

 

All of these cross currents and turbulence may take years to play out. It is almost impossible to confidently put them into a quarterly or even annual forecast. We always hope for the best, but we are prepared for a full range of outcomes—lower or higher rates and potentially lower asset prices, all of which could be driven by different factors, including inflation, recession, high capital demand, successful trade negotiations, regulatory and/or tax reform, or adverse effects from ongoing wars. Even with fairly extreme outcomes, our company would remain healthy.

 

Finally, I would like to close this section by reiterating that I still have an abiding faith in America—the exceptional strength of our innovative economy and our resiliency."

 

- Jamie Dimon, J.P Morgan Chase 2024 Letter to Shareholders

 

Edited April 7, 2025 by Blake Hampton

[flesh]

5 hours ago, Santayana said:

You're making big assumptions about other people's portfolios.

Was up 3% now 1%, was 75% cash before last Thursday, now 35%. 
 

personally, I don’t care if stocks tank for awhile besides that it’s an opportunity if it helps long term. Also I’d love to see my house lose 1/3 of its value so other could afford one. I have two siblings that got locked out of housing because of our amazing economy that was clearly awesome before even though gdp would have been severely negative without egregious deficit spending. 
 

We don’t really know how much is what anyway, it all started with deepseek, the downturn, multiples were high as well, deficits were massive. Buff dog was raising massive cash. 

[WayWardCloud]

6 minutes ago, flesh said:

Buff dog

[Saluki]

I've been pretty good about avoiding looking at my brokerage accounts the past few days since I don't have any cash laying around to buy stuff. While the big names like Meta taking a pounding are scary, the smaller names have really lost most of their liquidity. I wish I had a bunch of cash and was smart enough to figure out how to take advantage of the chaos. Here is the bid/Ask for Taylor Devices:

 

Bid x size/exchange

$12.70 x 2/NASD

Ask x size/exchange

$50.42 x 1/NASD