What are your thoughts or do you have any concerns about a black swan event? I worry the chance of a black swan event happening after Trump officially takes office is very high. Example would be a Covid like crash.
I think we should still be very cautious. We’re coming out of Covid where the gov’t dumped trillions into the economy. That’s still working through the system (every trillion turns into 3-7 trillion – I get 5000 from the gov’t, stick it in the bank or spend it and it gets into a bank which lends it and it’s spent again, etc.) The 3% increase in the economy isn’t anywhere near what it should have increased by if people were still buying the same things and the same amount of things (the economy would have increased by 20-40% minimum). I think this time “it’s different”. But also we have Russia in a hot war in Europe, Israel shooting at multiple countries, Syria just folded, succumbing to terrorists like Afghanistan – that’s 2 states in that area fully controlled by unapologetic terrorist regimes – what could possibly go wrong. There’s so much risk in the world right now that it’s hard to believe P/Es of 20+ on so many stocks. There’s just too many things that could go wrong and too many things that obscure or distort normal economic signals.
Don’t you think Trump taking office on 21st, Tuesday comes with increase in tarriffs causing market to sell off due to risk of inflation and potentially making the yields to go up?
What are your thoughts or do you have any concerns about a black swan event? I worry the chance of a black swan event happening after Trump officially takes office is very high. Example would be a Covid like crash.
I think we should still be very cautious. We’re coming out of Covid where the gov’t dumped trillions into the economy. That’s still working through the system (every trillion turns into 3-7 trillion – I get 5000 from the gov’t, stick it in the bank or spend it and it gets into a bank which lends it and it’s spent again, etc.) The 3% increase in the economy isn’t anywhere near what it should have increased by if people were still buying the same things and the same amount of things (the economy would have increased by 20-40% minimum). I think this time “it’s different”. But also we have Russia in a hot war in Europe, Israel shooting at multiple countries, Syria just folded, succumbing to terrorists like Afghanistan – that’s 2 states in that area fully controlled by unapologetic terrorist regimes – what could possibly go wrong. There’s so much risk in the world right now that it’s hard to believe P/Es of 20+ on so many stocks. There’s just too many things that could go wrong and too many things that obscure or distort normal economic signals.
Don’t you think Trump taking office on 21st, Tuesday comes with increase in tarriffs causing market to sell off due to risk of inflation and potentially making the yields to go up?
Stocks are assets and assets go up with inflation.
Also, higher inflation means higher long term rates, which means lower returns for stocks.. Just showing the other side
Very clearly explained, and nice clear graphics.