Maybe I should too, for the next 10, given I have 12-15 years to early retirement 
But others here won’t!
Nobody likes lost decade as it only reduces confidence because just because in past it was only a decade doesn’t mean in future it wouldn’t be 50 year period
1 Like
Careful what you wish for …
50 years lost would indeed be a new record.
I took about two decades (until the 1950s) for the Dow to recover from is lows during the Great Depression.
As an old fart I’m still getting used to the U.S. re-import of Halloween back onto this old continent of ours, but then I thought why not throw in some eye candy …
… through …
Halloween Charts*
Precarious P/E: “We are at the third-highest valuations on the S&P 500 in modern history only behind 1999/2000 and 2021. If this valuation upside continues, it leaves forward-looking returns less compelling,” says Emily Roland, co-chief investment strategist for John Hancock Investment Management.
US concentration: “Current pricing prices a likely implausible concentration in earnings and wealth into US companies forever in the future. The last time the US showed a market cap share like this was just ahead of the tech bust, and we all know how that went,” says Bob Elliott, co-founder and CEO at Unlimited.
Deficit spending: “The US government pays out more in interest expense than it spends on national defense. Both are not going to be going down anytime soon. It just highlights we’re spending way beyond our means, living on debt and at some point the bond vigilantes will emerge with a vengeance. Maybe as soon as next week,” says Jack McIntyre, portfolio manager at Brandywine Global Investment Management.
Trick or treat?
* Came across this in Bloomberg’s Market Daily newsletter.
4 Likes
Wasn’t it less in real terms thanks to deflation?
1 Like
Probably.
Still kinda ugly, though, no?
Spooky. 
I’ve read somewhere (and of course I lost the link) that some not negligible part of US debts is held by the US itself, in the form of some other agency. I think they can’t really remove it from the market but I wonder why…
Jeez. I come back from a halloween dinner and see that the markets turned red for halloween. What happened? Is it because I bought stocks yesterday?
4 Likes
I guess market is fully pricing in a Trump win now.
If you look at the betting markets, Harris has caught up again today. Trump is still ahead, but not as much as before.
5 Likes
This kind of sentences are always confusing for me. When looking at inflation adjusted TOTAL returns (including then dividends) the returns even during periods like 1929-1949 and 1969-2009 are positive AND higher than bonds. The returns were not very high as compared of what we are living today of course but still positive… Am I missing or misunderstanding something?
2 Likes
2 posts were merged into an existing topic: Benchmarking The Market
1y IRS is currently at 0.44% and 2 years at 0,38%
So the market anticipate SNB rate to drop 0,25% soon.
My analysis : the right time (like always!) to be active on RE and buy rental property as a home bias and stay passive with global equities.
1 Like
It’s a good mental approach. And if you have any cash left, you can DCA* your way out of the bottom much faster than the official recovery number (*dollar-cost average investing).
Anyone still wondering why Buffet is building up his pile of cash?
The reason is right there in the article (emphasis mine):
Buffett said at the annual meeting in May that part of why he started selling some of his Apple shares is that he expects tax rates to go higher in the future. But Edward Jones analyst Jim Shanahan said he wonders if part of the reason Buffett started selling Apple is tied to last year’s death of Vice Chairman Charlie Munger because the sales started shortly after Munger’s death. Shanahan said Buffett has never been as comfortable with technology businesses as his longtime partner was.
I don’t think Buffett expects a huge market crash, as BH doesn’t buy “the market”, but that he lies in wait to buy, as he says, a wonderful company at a fair price.
I question how much Buffet does at BH today anyway. The man is approaching 100. i‘m not sure how sharp he still is.
I think 99% of the decisions are done by others at this stage.
1 Like
Regardless of what he personally does, the strategy is probably approved by him. And current BH strategy looks like an approx. 30% cash/ bonds pillow.
I somehow find myself holding same percentage of bonds/ cash, as per the strategy mentioned here some years ago. What I find comforting in this is the capability to sell the bonds and buy the (cheap) equity in an eventual bear market.
I also assume that bonds will start going up in case of an equity decline and I plan to sell bonds and buy on each -5% equity decline until I use all my bonds. I’ll split the 30% bonds bucket into 6-7 buys, which should cover me up to a drawdown of 30-35%. This should decrease the recovery period significantly. I know it’s not a perfect strategy to hold 30% bonds/ cash and I have lost some in the bull period for not having that in equity, but I sleep better this way.
Let’s not forget Berkshire generally makes big purchases and don’t do too much DCA like retail investors.
So don’t be surprised if they make a big investment in some company or just buy a company completely. Their current cash position might or might not be about asset allocation. It could easily be a process of raising funds to reinvest.
4 Likes
I think it is something of a warning that BRK has been a net seller of equities for many quarters in a row now.
I’ve been telling myself for a long time I’ll lament not buying more BRK when the S&P500 is at -20% and BRK.B at +50% as they’ll be buying everything nobody else has cash for and setting themselves up for the future.
It’s all hinted in the 2023 shareholder letter, they will be “firefighting” in the next…fire sale.
Yeah they did extinguish in 2008-2009 alright, made a tidy profit out of it too
3 Likes