Investing Thread

[TSmith34, Inc.]

I doubt this is "irreversible" - at least not as far as the stock market is concerned. (And this is the Investing Thread.)

The market has been through great tests and turbulence and tumult, through wars and pandemics and terrible policies and political upheaval ... and still, given even a little time, it's always gone up.

A fun exercise is to look at a market chart from the last 80 years. Things like Black Monday and the Covid crash - each of which was catastrophic at the time - look like little blips over time. Even the dot-com bust and the Great Recession don't look so angry.

While I hope your optimistic view turns out to be correct, I think this is different than cases of irrational exuberance (Black Monday, dot.com) or a business cycle (Great Recession) or a global health crisis (COVID).

I think it is very difficult for people to grasp the magnitude of the change here. The historical post-WW II frame of reference no longer holds up. Tariffs are only the most recent and most visible cause of the stock market crashing. Consider: the United States of America is threatening to invade multiple of its NATO allies.

The stock market will, undoubtedly, be higher at some point in the future than it was in January 2025, but this is a fundamental reordering of things, and not one to America's advantage.

[GB Warrior]

While I hope your optimistic view turns out to be correct, I think this is different than cases of irrational exuberance (Black Monday, dot.com) or a business cycle (Great Recession) or a global health crisis (COVID).

I think it is very difficult for people to grasp the magnitude of the change here. The historical post-WW II frame of reference no longer holds up. Tariffs are only the most recent and most visible cause of the stock market crashing. Consider: the United States of America is threatening to invade multiple of its NATO allies.

The stock market will, undoubtedly, be higher at some point in the future than it was in January 2025, but this is a fundamental reordering of things, and not one to the America's advantage.

^knows ball

[MU82]

While I hope your optimistic view turns out to be correct, I think this is different than cases of irrational exuberance (Black Monday, dot.com) or a business cycle (Great Recession) or a global health crisis (COVID).

I think it is very difficult for people to grasp the magnitude of the change here. The historical post-WW II frame of reference no longer holds up. Tariffs are only the most recent and most visible cause of the stock market crashing. Consider: the United States of America is threatening to invade multiple of its NATO allies.

The stock market will, undoubtedly, be higher at some point in the future than it was in January 2025, but this is a fundamental reordering of things, and not one to the America's advantage.

I appreciate your angst, and share much of it.

[GB Warrior]

I could understand this if this were viewed as a re-shoring effort around manufacturing in NA in some industries and bolstering US CAN MX manufacturing or production. And the tariffs announced this week might even suggest that as a logical end result if you simply ignore that we have been terrorizing our Southern and Northern neighbors. In many segments, manufacturing in MX and CAN is still a relative benefit to the US vs any manufacturing in Asia due to supply chain integration. But that might strengthen Mexico, which is a no-go for this administration.

[SoCalEagle]

Okay, let's have some fun on this horrible investing day.  Let's predict when the S&P 500 hits a new all time high:

S&P all time high = 6,147.43
S&P 500 low today (so far) = 5,074.49
New S&P 500 all time high = xx/xx/xxxx

I'll start by predicting we have a huge Santa Claus rally and get a new all time high on the last trading day of this year, 12/31/2025 (hey, I'm an optimist). 

[Shaka Shart]

I could understand this if this were viewed as a re-shoring effort around manufacturing in NA in some industries and bolstering US CAN MX manufacturing or production. And the tariffs announced this week might even suggest that as a logical end result if you simply ignore that we have been terrorizing our Southern and Northern neighbors. In many segments, manufacturing in MX and CAN is still a relative benefit to the US vs any manufacturing in Asia due to supply chain integration. But that might strengthen Mexico, which is a no-go for this administration.

There is so much cross border traffic that goes back and forth in manufacturing (car assembly, multiple times). I do not really think they understand the magnitude of how much they are fracking (ha) border states manufacturing by doing this.

All of those auto workers they are touting being helped are going to get priced out of the job. Having worked at a few manufacturing plants, this isn't going to be a "spin up manufacturing domestically and pass the savings on in ten years". Repatriating these jobs will cause price hikes due to wage and material.

So could you be arguing that the tariffs are going to just prepare us for higher COL with repatriated manufacturing? Maybe, but the second the tariffs are lifted they are going to unmothball that capacity. So more likely you are looking at these prices sticking in perpetuity.

More concerning is the fact that nobody really has any reason to trust the US in good faith anymore.

[rocky_warrior]

[Uncle Rico]

Rocky-

I think it's really unpatriotic of you to post this.  What about the good tariffs?  You won't post videos about that.

[GB Warrior]

Rocky-

I think it's really unpatriotic of you to post this.  What about the good tariffs?  You won't post videos about that.

The only real way to stop a bad guy with a tariff is via a good guy with a tariff.

[MU82]

More concerning is the fact that nobody really has any reason to trust the US in good faith anymore.

The world could trust the U.S. in good faith through a variety of presidential administrations and congresses from 1940 through 2024. Hopefully, there will be trustworthy people in charge again here in the not-too-distant future.

I can be overly optimistic, I know.

[Shaka Shart]

The world could trust the U.S. in good faith through a variety of presidential administrations and congresses from 1940 through 2024. Hopefully, there will be trustworthy people in charge again here in the not-too-distant future.

I can be overly optimistic, I know.

Lucky for me, I made sure to buy my barrel and suspenders to wear it with before the crash. I am sitting pretty.

[Skatastrophy]

Okay, let's have some fun on this horrible investing day.  Let's predict when the S&P 500 hits a new all time high:

S&P all time high = 6,147.43
S&P 500 low today (so far) = 5,074.49
New S&P 500 all time high = xx/xx/xxxx

I'll start by predicting we have a huge Santa Claus rally and get a new all time high on the last trading day of this year, 12/31/2025 (hey, I'm an optimist). 

3/15/2027

[dgies9156]

The tariffs are temporary. The pressure to loosen what's out there will be great as the inflation, slowdown in consumer spending and real threat of a recession looms. If I had to guess, the politicians will work something out by the third quarter with a strong market rebound to follow.

To do otherwise would be insane and would all but ensure a change in Congress in 2026.

[SoCalEagle]

This is what I'm thinking, too. However, I can easily see the stock market being down for a couple of years like Skat notes above. Remember, even with tariffs off, we are digging a hole that we may not be able to get out of. 

[The Sultan]

The tariffs are temporary. The pressure to loosen what's out there will be great as the inflation, slowdown in consumer spending and real threat of a recession looms. If I had to guess, the politicians will work something out by the third quarter with a strong market rebound to follow.

To do otherwise would be insane and would all but ensure a change in Congress in 2026.

This feels like wishful thinking more than anything.

[Uncle Rico]

The tariffs are temporary. The pressure to loosen what's out there will be great as the inflation, slowdown in consumer spending and real threat of a recession looms. If I had to guess, the politicians will work something out by the third quarter with a strong market rebound to follow.

To do otherwise would be insane and would all but ensure a change in Congress in 2026.

Based on history, you're completely wrong.  For the last 18 months, we were told what economic policy would be moving forward.  We were told these idiotic measure were coming.  Everyone said it wouldn't happen.  Everyone said no one is dumb enough to use tariffs in such a regressive fashion.  The people implementing them said they were going to do this.  And now we're being told by the biggest supporters of tariffs that personal wealth isn't as important as American independence, whatever that means.

When you have economic buffoons in charge of things, the market and economy will suffer.  But like I say, don't be poor. 

[Uncle Rico]

This is what I'm thinking, too. However, I can easily see the stock market being down for a couple of years like Skat notes above. Remember, even with tariffs off, we are digging a hole that we may not be able to get out of. 

What country in their right mind will trust America to be a faithful trade partner?  Why will the market ever feel confident in the near future?

[Jockey]

Based on history, you're completely wrong.  For the last 18 months, we were told what economic policy would be moving forward.  We were told these idiotic measure were coming.  Everyone said it wouldn't happen.  Everyone said no one is dumb enough to use tariffs in such a regressive fashion.  The people implementing them said they were going to do this.  And now we're being told by the biggest supporters of tariffs that personal wealth isn't as important as American independence, whatever that means.

When you have economic buffoons in charge of things, the market and economy will suffer.  But like I say, don't be poor. 

100% correct. This is not the America we grew up in.

I only wish I had posted this so Sultan would have something to whine about.

[jesmu84]

The tariffs are temporary. The pressure to loosen what's out there will be great as the inflation, slowdown in consumer spending and real threat of a recession looms. If I had to guess, the politicians will work something out by the third quarter with a strong market rebound to follow.

To do otherwise would be insane and would all but ensure a change in Congress in 2026.

What is the point of broad temporary tarrifs with no underlying industrial policy? What's the short and long term goal of that?

[Uncle Rico]

100% correct. This is not the America we grew up in.

I only wish I had posted this so Sultan would have something to whine about.

This is a latently political discussion.  The market/investing is directly tied into this particular economic policy.

You can still manipulate the market to work for you, but in the end, the inconsistency, uncertainty and bad faith actions by the administration is directly impacting investing.  When corporate America is scrambling with no clear direction, it's bad

[SoCalEagle]

What country in their right mind will trust America to be a faithful trade partner?  Why will the market ever feel confident in the near future?

Sadly, I don't have an argument against this.  Maybe I am just hoping things will get better.  However, somehow, I have to think that more stable minds will prevail.  It's pretty much universally understood that this will end in disaster if left unchecked.  You mean to tell me there are no conservative pols left in America who will stand up to something that is so undeniably harmful to the U.S. (and the world's) economy?

[Uncle Rico]

Sadly, I don't have an argument against this.  Maybe I am just hoping things will get better.  However, somehow, I have to think that more stable minds will prevail.  It's pretty much universally understood that this will end in disaster if left unchecked.  You mean to tell me there are no conservative pols left in America who will stand up to something that is so undeniably harmful to the U.S. (and the world's) economy?

I'd like to think so but, again, history tells me it won't happen

[GB Warrior]

What is the point of broad temporary tarrifs with no underlying industrial policy? What's the short and long term goal of that?

Again we're applying the lens of logical actors  to this. I suppose this could be another case of Tr*mp threatening, receiving token gesture that was already happening, and then declaring victory.

I'm dubious though, as no country is playing ball here. Further, you can't bully companies en masse to magically divert capital and re-shore. Companies have spent the past decade moving toward models they thought would insulate themselves from these sorts of headwinds by moving out of China to Thailand, to assembly operations in the US, all to find it's all a waste. The death of tempered predictability is the death of the markets we've enjoyed for most of the last 80 years

[Uncle Rico]

Again we're applying the lens of logical actors  to this. I suppose this could be another case of Tr*mp threatening, receiving token gesture that was already happening, and then declaring victory.

I'm dubious though, as no country is playing ball here. Further, you can't bully companies en masse to magically divert capital and re-shore. Companies have spent the past decade moving toward models they thought would insulate themselves from these sorts of headwinds by moving out of China to Thailand, to assembly operations in the US, all to find it's all a waste. The death of tempered predictability is the death of the markets we've enjoyed for most of the last 80 years

What are going to on shore?  These mythical factory and labor jobs that have all of sudden become some glorious manhood affirming thing are becoming automated.  This isn't 1960 clock-punching jobs that are "coming home".

[tower912]

From a purely investing perspective the old adage about markets hating uncertainty applies here.  The markets are reacting appropriately to chosen chaos.