Global Selloff, an advice

All data in terms of statistics in the United States is purely fabricated revolving around magical thinking, good luck trading that. Also, many are starting to wonder if the bond market is becoming a bubble in which case at some point it will burst.

Stocks in the United States are highly overvalued and I suspect a melt up will occur eventually in a crushing correction.

Well since everyone who’s predicted that has only been right 2 times in the last 100 years, you think it might be wise to just take the risk and get a return like people have every other time except 1929 and 2009?

Sure if I had the capital to do so. (Which I don’t.)

Even if I had money to invest in the market I wouldn’t in this current environment as it is just asking or begging to have your face ripped off.

So the rich aren’t getting richer?

Just as i were expecting, the greed mode of markets did not last much and fear again has taken over. The time of investing is coming again, perhaps as soon as today. If markets fall 2/3% more today or during next week, it would be right time to start investing again. If markets complete a fall around 5% from the peak, 25% of the capital should be deployed. But, this should be kept in the mind that the markets may not bounce again in a hurry or even go down further. To cope up with that situation, rest of the capital should be divided into four parts and deployed at every 5% of further fall.

This should be kept in the mind that this 20-25% kind of fall may happen and markets may not recover immediately from there. It may take months to recover from there. But, this is the risk that market participants have to take, otherwise they should not be in the market.

Less rewarding but much safer way is to start or increase SIP.

with love,
sanjay

If Zero were drafting 200 bucks a month into oil, trains and missiles, he’d be getting more for his money right now as Trump continues to push the market down.

Investors and traders should send a thankyou card to Trump as courtesy to him such opportunities will arise again and again.

with love,
sanjay

Zinnat out curiosity, how is Indian and Chinese relations going over there?

Given what China did today, there is good chance that US will face the results of choosing a fool and egomaniac person as its president very soon.

My guess is that big cuts in the stock markets is coming. Investors should pull up their socks.

with love,
sanjay

zinnat,

Purely just out of curiosity, how does all of this analysis factor into your current views on God and religion? Is God a capitalist?

When you have the time, perhaps we can take this to another thread.

Otherwise, carry on.

It’s got nothing to do with it. That’s like asking how star wars movies relate to blowing your nose.

If God is money, then perhaps goodness, love, fidelity , honesty can be bought with it. Maybe that is the key to the psychology of the market place, and that should be the moral lesson to the various ministries who preach this.

In fact when push comes to shove, the big fish will always come through, they will buy and buy and buy and buy until it can trun around, then they turn into sharks , and take what’s left by hostile take over.

Not to worry this is not 1928.

Perhaps some day but not now. Right now, I am busy in making money.

with love,
sanjay

Trump is an obvious fool.

If one wants to fight someone, it would be wise to access the weakness and strengths of the enemy before provoking the enemy. Only a fool would provoke first and think later, even more so in the case when it is not about an individual but a whole of the country can be severely affected by that.

These so called tariffs imposed by both countries on each other means nothing to either in real terms. All that is nothing but merely posturing. It would not disturb the economy of either country much. Both are aware of it too. The real issue is if this situation can escalate to such extent where both would really start hurting each other. And if that ever happens, US would be a greater loser by a fair margin.

There are three main reasons of that. First one is that US based MNCs have a huge investments in China. On the other hand, there is no Chinese co has manufacturing base in US. After a certain level, the tension between the two countries would start hurting China based US cos in one way or other. That would ultimately hurt US economy.

The second reason is that China is not a democracy like US. China can force its cos/citizens to suffer in the name of nation and nobody can raise a voice against it but that facility is not available to Trump. US people are not ready to suffer any negative consequences because of what Trump think is justice, even if he is right. Nobody cares about country but himself only. I am sorry to say that applies more in the case of US people.

The third reason is like China having such a nuke which US does not have. Over the last two decades, China used its all trading surplus with US in buying US bonds and bills. Right now, China is the biggest holder of US treasury bonds and bills. The second one is Japan. I am not aware of latest figures, but China alone owns more than 10% of US bonds and bills. In other words, we can say that China is the biggest US creditor, and you cannot mess with such a person.

If this tension escalates beyond a point, and China decides to sell its entire US paper, that would be an economic catastrophe not only for US but for the entire economic world. Even a hint of any such possibility has the potential of bringing stock markets and USD down to the tune of 10% in a single day. And, seeing the biggest holder coming to sell its stake, others holders will also not have any option but to sell their US paper holding in order to avoid losses.

It is not the case that China would not suffer in that case. Yes, of course, it would also suffer but as i said before, being almost a quasi dictatorship, it can withstand that suffering without much visible noise. And, we can easily imagine what will happen in the case of US.

Having said that, i hope and my assumption is also that things would not go to that point. Trump is just trying to play hardball but unfortunately he has chosen a wrong opponent for that. China is neither Mexico nor Canada, not even Russia.

with love,
sanjay

Been invited to Bilderberg, yet? :wink:

=D>

I hear that. Actually, I haven’t been invited yet either. Though I suspect that God has nothing to do with it. :wink:

Hi Zinnat. A very interesting thread.
I have a few disagreements, which I hope will prove constructive.

That apparent obviousness should always be a warning. And a fool doesn’t attain the highest office in the world.
A mere middle class citizen should never think he can judge such a powerful person to be a fool.

The US economy needs to be shaken up and rearranged.

It makes a big difference for a lot of smaller companies in the US, though for Chinese companies, since there is no freedom there, it won’t bring as much gains.

China has bought a lot of harbours and real estate in the US, which the US can simply “repatriate” if push comes to shove. It is not in Chinese best interest to make things boil over with the US. Right now the US etablishment considers its president its worst enemy, but that will change quickly once China becomes openly hostile.

The opposite is the case. China needs to be a dictatorship because if people were allowed to do their own thing, the country would instantly fall apart. There is no true loyalty in China, only fear and helpless emasculated populace that, if they were set free, would be like early adolescents, entirely selfish and irresponsible.

If it woud sell its bonds that would be a major relief for the US, as even though it would cause a one time blow, it would also mean that China loses its leverage. China has only one barrel here and it won’t likely shoot through all its powder at once.

In the end, the creditor is the more vulnerable one, as he is the one who stands to lose. Especially if the debtor is the one with the most weapons.

This overestimates the condition of China. It has been stretching its peoples resources for many decades. It won’t be able to absorb serious blows. Which is why it keeps conceding to Trump.

Canada is not the opponent of the US by any means. And Russia has been giving signs of defeat, by allying with Turkey and proclaiming that the US is in inevitable decline. The military budget of the US alone equals Russia’s entire GDP. This also means they aren’t of that much use to China as economic ally. China needs the US, and it needs Europe, so Trump can go a long way still in pressuring them.

It is only good for Wallstreet to be re-arranged. It presents a lot of new investment opportunity. But only for those that look at actual value-futures, rather than those merely analyzing graphs and trends. That is the feminine part of the game, where value-discernment is the masculine side. Trumps rule favours the masculine side, which goes to the heart of things and is not impressed with the surface.

Case in point:

China’s economy, which is completely compulsive with a stretched out workforce and very limited capacity for innovation, has no alternatives but to force a steady course or sink. The US economy, consisting of free entrepreneurs and having very high minimum wages that can aways be lowered in crisis plus a steady influx of foreign workers, is simply unable to sink. The US can take ten times the blows that China can. China is a porcelain tiger. The US is a racehorse that has taken a long nap and is just waking up.

As predicted,