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I look forward to the follow-up where all these trades were closed 1 minute before the Trump truth-social TACO post.
The funny thing is that in the video he mentioned Truth Social instead of a Bloomberg terminal. I was just thinking yesterday why hasnât Trump sold a subscription to his TS feed? If he delays his feed by 20 minutes and sells a real time subscription, Wall Street would pay millions for this.
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Donât market time they said. You canât time the market they said. So I just sell as planned on Friday even though trump started a new trade war. Then today it recovers. So basically, the market dipped just for my sale. FTS.
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I sold 50% of my TQQQ for 100% gain this afternoon. Never bad to take some profits off the heatâŠ
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Is this the S&P500? Ok it didnât regain ATH, sure, because of how % work, but this jump/bounce/rebound, whatever it turns out to be, is in âgood enoughâ territory, for me at least.
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I know this thread is supposedly just good fun, but these charts are just so badly done.
Itâs a 3% drop.
Find a chart that starts at 0, zoom out a bit and everyone could just continue to relax.
This one doesnât even start at 0:
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My portfolio did. More painful was that I mainly trimmed gold stocks which were up 5% today.
Yes I agree.
Iâm just Mr. Picky about the -5% +5% thingie (I have no Idea how to call it). The thing is after a 5% down, a 5% up doesnât take you back to 0. I have the feeling that I have to point it out, mostly for the lurkers, Iâm sure PhilMongoose knows that.
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Thomthinâ happen? I wath buthy!
P.S. as a fan and former practitioner of boxthing, Mike Tyson is among the GOATs, hope he doesnât read thith, I want my teeth!
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Wasnât quite sure where to post this, but I yâday watched Michael Green (of index investing skeptic fame) talk to David Einhorn, (billionaire) hedge fund activist investor.
Itâs fairly long (about an hour), but perhaps others are interested in watching.
My personal take away was that David Einhorn believes markets are broken (and have been for a while, and they wonât return to how things worked a couple of decades ago), but the refreshing part is that he is not whining about it and instead has adapted his investment approach to buying companies that generate cash flow and return that to their investors via dividends and buybacks.
(Of course you now know why Goofy likes David Einhorn as this pretty much summarizes most of Goofyâs stock picking approach.)
TLDW summary by perplexity:
Here are 10 key takeaways from âEntering the Fall 2025 | Still Broken? More Broken? Never Broken?â, a fireside chat between Michael Green and David Einhorn hosted by Simplify Asset Management:
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Markets are âmore brokenâ than ever â Einhorn argues that stock markets no longer serve their fundamental purpose of allocating capital efficiently; instead, they primarily function as speculative trading venues dominated by short-term price movements.ââ
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Collapse of valuation discipline â Traditional metrics such as P/E or price-to-book ratios no longer influence investment decisions, as most participants ignore valuation fundamentals in favor of momentum or liquidity signals.â
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Rise of passive investing â The shift from active to passive investing has structurally altered markets: in 1995, 80% of trading was active; today, only about 10% remains driven by active managers, leaving far fewer actors ensuring value convergence.â
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Algorithmic and pod strategies dominate â Systematic funds, quant models, and âpod shopâ hedge funds now drive most trading volume, focusing only on short-term data reactions instead of fundamental fair value estimation.â
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Retail speculation is surging â Individual traders, trained by zero-commission trading and social media platforms, now represent a growing portion of market activity â about 17% by Einhornâs estimate â further eroding long-term price rationality.â
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Einhornâs adjusted investment approach â Greenlight Capital now focuses on deeply undervalued, unloved companies trading at low multiples (5â6Ă earnings) and using dividends and buybacks to deliver shareholder cash returns even if broader market attention never returns.â
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AI boom parallels the dot-com era â The current wave of massive AI infrastructure spending mirrors the 1999 tech bubble â potentially overhyped, capital-intensive, and possibly debt-financed with uncertain returns.â
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Big Techâs monopoly transformation â Companies like Apple, Meta, and Google are shifting from asset-light, cash-generative models to highly capital-intensive ones. Einhorn expects declining returns on capital and potential overinvestment in AI.â
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Economic bifurcation â A handful of mega-cap firms drive S&P 500 earnings via AI and data center spending, while the broader economy â especially small and mid caps â shows signs of contraction and margin pressure.â
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Regulatory and governance collapse â Einhorn criticizes the SEC as functionally absent, noting that since the mid-2000s it has avoided actions that could make stock prices fall, effectively enabling corporate misreporting and weakened oversight.â
Overall, both agreed that capital markets have detached from fundamentals, and that traditional stock analysis plays a diminished role in price discovery.
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Is there a message at the end?
So the interpretation could beâŠif one doesnât feel competent/confident to pick stocks then they could hang their hat on broadly-diversified, low-cost index funds beating inflation and hope for the bestâŠ?
Or, yolo the shit out of it, make 100 and spend 99.5 and hope the state, whichever state, gives a liveable pension by the time theyâre 75 or so?
This 2nd last question summarizes the conversation best (IMO):
Well, that might be your take-away, or someone elseâs take away. Canât even judge whether itâs right or wrong, IMO, or in Davidâs opinion.
I think heâs just decided for himself that it does not really matter what he thinks the correct market behaviour should be or is, so he will stick to those corners of the market that are (a) fundamentally undervalued (b) can produce cash flow, and (c), return that cash flow to shareholders, via dividends and/or buy-backs.
I personally could not agree more.
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My conclusion:
- Are we in a passive Investment bubble: Yes
- Can fundentals based Investment increase returns
- whilst the bubble expands: No
- During the crash: No
- In the recovery after the crash: No
What does this mean? We are in a gigantic bubble. The only way out is to reduce your equit allocation and to wait for the bubble to burst. Knowing that highly likely, this will lead to worse returns but it preserves the sanit.
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I believe I read somewhere that passive investment even though represents high allocation, it drives low activity. Thus this isnât distorting prices. However as the article mentions above, who is making the money now do so through the ups and downs that algorithm (and active trading) creates.
any market is due for a correction at some point. I think itâs a wise advice to reduce equity allocation.
What I donât know is whether to increase bond allocation or not as recently both stock and bond went down at the same time. maybe some old fashioned diversified portfolioâŠ
what I am also afraid is double dips. Recent correction or recessions have sent stock down but up pretty quickly. From one side, I wouldnât mind the asset arbitrage (reduce stock to favor bonds and then reallocate to stocks in the rebound) but if there is a double dip, itâs difficult to stay on the sideline for 2-3 years or more.
not sure if anyone has a different view
For myself I have identified 3 styles of investments: passive, active and mechanical. While we have been maybe in a active investment bubble we are now in a passive investment bubble. The main difference: it is easier for companies to cheat. That is all!
The moment the number of indices surpassed the number of stocks was probably the switching point. And then for every index there are usually multiple ETF.
So yes, that is not only a bubble, it is quiet idiotic: you chose a passive approach but have to investigate more items than you would have to with active investment.
The solution most investors choose however is the same for passive or active investments: most of them buy what they have heard of somewhere âin the busâ (holy grail) and do not investigate any further. And that may be the real problem.
Passive investors do not make money because they use a passive approach. Indeed I think most of them lose money over a 20 year period. Because they sell low and buy high. Passive investors make money by being passive in the moment it counts. And active investors may even make more that way. And of course mechanical investors are always passive and therefor make the most⊠
On the topic of bubbles and why demand for Nvidia chips might be overstated currently:
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