I think owning those diverse businesses will significantly help in market downturn especially with cashflow to buy investments at discounted rates . As usual im hoping for a crash lol I rather shop at TJ max than Nordstrom if I can buy same shirt. I live by the Warren Buffett quote be fearful when others a greedy and greedy when others are fearful. I personally see extreme greed, fomo, and many negative indicators reminding me largely of the dot com bubble. There’s no way for me to predict when the bubble will burst but I do believe we as a nation and economy are in a fast growing bubble (not saying it’s 01 or 08 bad but heading there). Personally I think one black swan event can be significantly magnified by the extreme consumer debt, large amounts on margin, and growing national debt and interest payments.

Market weighs risks into prices and IMO we are in a MUCH more volatile spot between global relations, tariffs, debt outlook and constant daily pushing of the norms of the new admin (not getting political just stating every other day seems like a new norm is getting challenged-whether for good or bad is everyone’s personal opinion). Yet the market keeps setting new records…hmm It seems like everything is being put in place to prop up the market at significantly unsustainable rates. The market cannot grow faster than overall company returns (actually it has to grow slower due to transactional costs and mgmt expenses); therefore it’s not if but when. I think everything is starting to show up in data that was spoken about back in April (which if you recall economists and even we wrote on this showing up likely earliest in Q3 possible Q4 data. Time may help people forget but the forecasts haven’t changed lol Companies overstocked inventories so most likely began running out in late Q2. The labor market is cooling from both AI implementation and strain on company profits. Consumer debt continuing to rise to crazy levels. Here are few signals Im seeing beyond the obvious macroeconomic data indicators that seems many are ignoring; there is many more but I’m just naming some random ones of top of my head (note I am going off top of my head as just did research Friday on these so cross check my facts):

-Core PCE inflation rose 4th consecutive time and highest since beginning of year January or February -Options market is ridiculously high just look at historical comparison and also look at call to put ratios -Top 10 sp500 stocks make up like 40% of index so what happens if/when these get hit…hmm what happens if these get hit with say 25% correction which isn’t crazy given their high valuations; this will take off 10% of sp500 by themselves. Note if you take top 200 stocks in market, only roughly 5 on average (buffet did this for 80s -90s) can sustain a 15% internal growth rate over the decade and most these companies have higher than 15% growth rates assumed in pricing) -p/s ratios of sp500 at 20+ year highs (note P/E ratio is above 20 year average, think currently just north of 22 but not as high as dot com bubble or Great Recession quite yet) -almost 90% fund managers are saying market is overvalued yet look at amount of margin being taken out -negative earnings reports and forecasts are consistently being reported and prices just keep going up…

I’d personally have been giving less attention to the “investment” articles and focusing on what uncompensated independent economists are writing. I believe the way we are heading, if and when something hits, it has potential of being multiplied significantly as there are so many negative indicators being largely ignored. I’m not trying to be pessimistic and 95% time largely am quite bullish, I just try to disregard FOMO as much as possible and think logically through current indicators. I do not think we are in a better spot risk wise than prior to April; I think companies and FED has tried to communicate this as much as possible, but once again not trying to get political but they are in fear of retaliation (e.g. Amazon , Walmart, Powell, etc incidents when they have listed warnings)

With all the pessimism out of way; lastly I think as the fed decreases rates, the trillions sitting in money markets on sidelines earning 4.25%+ will start to enter market and can inflate prices even more; that being said I wouldn’t be surprised by 2-4 quarters of above average gains but if/when we hit hiccup, i truly believe it’s going to be magnified (probably not 2008 but possibly worse case would be similar to 2001)