Short-term Ideas
Index or Die Trying
This isn't financial advice. I'm just throwing shit at the wall to see what sticks. Honestly, you're probably better off reading a book and learning something new. These ideas? They're so bad they make me question my sanity.
What to do now? Watch the next big decision by the FED, is it 25bp, 50bp or 75?? Jobs numbers? Retail data? I really don’t care about these.
The data should be bad so we get rate cuts, but not overly bad so we don’t get a recession. Well, the depression continues. For everything to go like in the Disney movie where the talking heads navigate this extremely messy period without any mistakes, the economy somehow miraculously does a soft landing, and humanity ascends to the next level, JPOWEL is the new Jeesus. Have they done anything right ever? So why spend over 5 minutes and try to analyze it? How we went from 2% change of 50bp rate cut to over 50%?
Nobody can predict that shit so why bother. How many of you had 50 bp last month on the table? I'm sitting here and guessing.
I feel sick about how the middle class is getting f*ucked so badly.
What to watch now:
CHYNA
Well, I just had to buy this one early in 2024, when was the peak “China risk” China will invade Taiwan, China is sh€t, and they can’t do anything. Well, it is an emerging market, and there is a risk. Emerging markets follow the playbook of crypto, “What a massive opportunity” to crypto winter. “It’s over, it’s all shit and scam.” All these emerging markets have their own little favor. Russia was closest to crypto with rapid cycles, and China has its own spices.
This is one of those times when, even though being contrarian seems too obvious and unlikely to pay off, you still have to go for it. If the rest of the market is overvalued, this shit is vastly undervalued (on paper).
The whole “China risk” is wildly misunderstood, and the majority gets it totally wrong. Yes, the Chinese economy is in deep trouble, but it's not the end of the world, and I can’t figure out why they would start WW3 anytime soon.
I would also like to get some other exposure to China, e.g., Amer Sports looks very good. Finnish people know the company well.
I see it as a huge opportunity in the long run and not as a “huge China dependency.”
Similarly, some German companies, like BASF, bear significant risks in China. The more complex the situation is, the more misunderstood it is. Again, what is the absolute worst-case scenario for China? Oh well, let's buy NVIDIA, like everybody else. Like it has zero China risk. Or Apple?
Trump is also good for Chyna (Better than the Biden camp). Trump is a businessman and wants to make deals.
China is in deep trouble, and resolving these challenges could take a very long time. If you're not prepared to endure potential volatility and long-term uncertainties, choose a different hobby. Picking stocks is not for you, and certainly not emerging markets.
Liquidity isn't the answer to China's problems, but if you're going to dance with the dragon, make sure you're fireproof.
THE AI Plays.
Who will develop the killer app or software that effectively monetizes AI? This situation resembles an arms race like the Cold War; although we have plenty of chips, we're waiting to see who will “invent” something.
Or will it make some business industries more profitable? Klarna looks like it’s going 100% AI, but it feels more like a marketing gimmick. The basic customer service I can see is easily replaceable.
Or are some industries where “Generative AI will destroy this”, but it is the opposite? IMO this makes education just so much better; personal coaches? Virtual teachers? Coursera?
The education in Finland is so bad nowadays that an AI assistant would do a better job. There is a huge opportunity here to sell courses, private schooling, etc. This demand will only increase in the future. Yes AI cannot teach the kids, but it can help.
Or if you believe AI will destroy the middle class, process heavy white-collar jobs in banks, etc, what do they need? To learn more desirable skills.
AI can enhance learning.
But what could be the killer app? (Gambling and speculation continue around this)
The debasement
LOWER INTEREST RATES, RATES STAY LOW FOR LONG = BAD FOR ECONOMY
I don’t know how economists nowadays get everything wrong. Don’t ask the hard questions. Don’t do anything? Why?
The Euro's Deceptive Strength: Everyone's raving about U.S. debt, but Europe? Silent depression…
In Finland, the silent depression has reached a point where playing the lottery is more acceptable than entrepreneurship as a way to get "rich."
Our talking heads yell that lower interest rates will stimulate the economy. News flash: You can't stimulate a corpse. Our zombie, unproductive economy isn't stimulated – it's on life support.
EURO = Programmed to lose value
BITCOIN = Programmed to go up (measured in Euro)
Choose your poison... or your antidote…
The solid business - Cash flow is king
It is always a good time to buy good businesses. Maybe even Buffet finds something more to buy since the FED cut rates by 0.5% has effectively lowered the discount rate.
Future cash flows look tastier
I hope and pray for value stock renaissance - but it isn’t happening
Solid no matter what happens
The rest of the market should play catch-up against Megatech, so if you have to buy something, buy the medium/small cap.
Wrap up
The short term would remain sideways to the election if I had to take a guess.
Where will the puck be in 2025 and beyond? Focus on this. Being a slave to the algorithm gives you zero edge.
Don’t bother trying to build a team if you are unwilling to work hard. Ninety-nine percent of investors would be better off just buying the index.
When to buy index:
You are not obsessed with this shit.
Your ideas are similar level what anybody can have with 5min in X/Reddit. You don’t make money by doing the same shit as everybody else.
You can't explain your investment thesis to a 10-year-old.
What story do the numbers tell? If the stock is down by 80%, do you hope it will be good when interest rates go down? Why? If your thesis starts with or includes the word “I hope,.” Stop. Congrats, you're not investing - you're gambling.
You're skimming the surface, not diving deep. What's even more profitable? What has more upside with less risk? Where is the hidden value? What contrarian view am I missing? What if the opposite is true?
You don't constantly question your thesis. If I didn't own this asset today, would I buy it at the current price?
You forget that flexibility is your superpower. As a private investor, you can do what the fuck you want, sell, buy, and stay in cash if there is nothing worthwhile.
Consistency and discipline outweigh occasional brilliance. Whether you're picking stocks or an index fund, the goal is the same: to build wealth over time.
Should I focus on the S&P500 and Bitcoin and do something worthwhile with my time?
In a world of economic debasement, algorithmic slavery, and “experts”, your edge isn't in following the herd. Do you want an edge? Develop brass balls, and have the guts to be also gloriously, spectacularly wrong. Because in this game, mediocrity isn't a strategy - it's a slow, painful death sentence.
Sources and good shit:
