The Dow Jones dropped 1,175 points on Monday — the largest single-day point drop in history —erasing all profits made so far this year. The 4.6% decline is the biggest percentage loss the Dow has suffered since 2011, when we saw a drop of 1,089 points on 24 August.
We could be at the start of a shift in investor sentiment. It’s a shift that now acknowledges P/Es are too high, given we’re in a rising nominal rate environment. So while rising rates won’t derail the economy, they will derail investor sentiment. Which means P/E contraction will be the driving force behind this correction. So how should you invest accordingly?
Hedge funds, collectively, are leaving investors worse off than if they had they bought a low cost index fund. It’s a terrible performance compared to many index alternatives. But of course, not all hedge funds take your money and deliver poor results. Some are actually worth the hefty fees they charge.
Unfortunately, such quick and easy gains give many investors an unrealistic view of how markets work. This is what changes the psychology of markets and sees money pour into stocks, pushing them higher. This is exactly what happened in crypto markets at the end of last year. This is how bubbles form. Bubbles are a result of belief. Busts are a result of disbelief.
China has a fake food problem. The country is chock full of fake soy sauce, rice and eggs. Not hard to see why Chinese parents love Aussie formula so much. But how can the country combat the flurry of fake foods? Blockchain technology might be the solution…
First came the curious. Then as the price rose, the speculators bought in. And in 2017, amidst incredible price rises, massive numbers of new investors bought on the fear of missing out. Those same late-comers have scrambled to get right back out again as the price crashed in January. Their fear of missing out has been transformed into plain old fear.
Nintendo is in the midst of a renaissance. They’ve found their mojo again. They’ve tapped into the very essence of gaming — fun, family and future. Not only are they changing the video game world again, they may very well kick off another multi-decade long console war. This should come as exciting news for Nintendo stockholders.
There’s a pecking order when it comes to investing. A hierarchy of opportunity. It’s a pyramid of power, carved out in the stone of regulation. The system is set up so that you aren’t allowed to invest in the early stages of the biggest opportunities. You have to be a sophisticated investor. That is a person rich enough to get a chance to make gains. Until now.
Google and Facebook have decided to crack down on advertisements that have anything to do with bitcoin and cryptocurrencies. Facebook have banned them entirely. One minute you’re running an effective advertising campaign to help educate people about this world-changing opportunity. Then next minute they turn the lights out. A blanket ban is too extreme.
In his big State of the Union address yesterday he laid down the plan - He’s going to increase the debt. A massive US$1.5 trillion infrastructure plan. Throwing good money after bad. Or should I say printing more money to pay off printed money. What to make of it all?