10 Nov 2024: animal spirits post trump winning election
I don't deny I tend to see the animal spirits appearing post trump winning the us elections. But I do not doubt there is an increasing chance for a us market crash growing in 2025 or 2026.
As you are aware, no one can time the market. George Soros wouldn't. Stanley Drunkenmiller wouldn't. The quant funds wouldn't too. But what I do know is the upburst will always end up bad if not badly.
How would I position myself? Will I chase this rally? People should know that with this upburst, I will not be surprised to see a decent percentage gain from the recent top but is this worth the risk add on. One should know that a fall in equities from peak could easily see 30 to 40 percent decline should broad market crashes. The tough part is catching the time and missing out on the opportunity of making another 50 percent return on individual equities..sometimes this could be even more. I am no master and have made enough mistakes over the close to 20 years dealing in my own financial assets.
Warren buffett has certainly turned cautious too early and missed out quite a percentage of returns but as the market continues to trend up, I will not be surprised to see Berkshire Hathway completely cutting all their apple positions. Do they still have banks stake? I didn't check that but if they still have it, I believe they will continue to reduce this stake in this industry category. I believe some us banks will be merged when market crashes eventually and not surprised that some banks may fail. Are they too big to fail? I wouldn't know but a crisis is brewing at the bank.
I think it's not wrong but Warren to increase the cash position in Berkshire as given his beliefs and principles, he wouldn't own financial assets that have pricing that detaches significantly from their underlying value.
It is a fine line to chase returns in us equities and to watch like a hawk for financial returns in us equities. Maybe for me, holding my Hong Kong listed equities for long term investment seem like a safer approach. Will I be right? Online brokerage firms will likely benefit from growing trading activities and volume. This is why Robinhood share price and ibkr share price continue to go up. I just feel that companies like tiger brokers are unfairly penalised given their initial business that is built off from china business. Tiger brokers has since grown with international operations in Singapore, ANZ, Hong Kong, USA, etc. I will invest in Xiaomi for the long term.
Only time will tell.
As always, this should not be construed as any investment or trading advice.
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