We keep coming back from the 9th inning as Howard Marks likens it.
There are these microbreaks... like the semiconductor sell off last month.
And then the wonderkid losing his shirt because of that sell off.
What are the odd ducks right now?
1. Geopolitics - Iran, Taiwan, Russia, US, Korea, New defense alliances because of Trump's wavering mind
2. Hacking by AI
3. The massive money bubble around AI along with real capex
4. The insurance engine behind the private credit engine
5. The bond market signaling that there is no merit holding long bonds at these yields
6. Murmurs of the US losing its privileged reserve currency / treasury position
7. Inflation looks underpriced
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On a side note a word in praise of America.
| Economy | 2014 GDP | 2025 GDP | Incremental GDP | Share of global increment |
|---|---|---|---|---|
| United States | $17.6tn | $30.7tn | $13.1tn | 34.9% |
| China | $10.7tn | $19.6tn | $8.9tn | 23.7% |
| ROW excluding US and China | $52.1tn | $67.7tn | $15.6tn | 41.4% |
| World | $80.4tn | $118.1tn | $37.7tn | 100.0% |
Thats just the GDP.
Wait for the USD market caps:
| Equity market cap | 2014 | 2025 | Increment, 2014–25 | Share of global increment |
|---|---|---|---|---|
| United States | $26.3tn | $68.9tn | $42.6tn | 48.4% |
| China | $6.0tn | $15.5tn | $9.5tn | 10.8% |
| ROW excluding US and China | $37.3tn | $73.3tn | $35.9tn | 40.8% |
| World | $69.6tn | $157.7tn | $88.1tn | 100.0% |
This encapsulates China's lies, American chutzpah and the multiplier effect of capitalism.
(And also the upcoming drawdown)
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My plight: The imposter syndrome.
I have had reasonable success thus far but a few lessons stand out.
1. Everyone has a portfolio of which they feel confident and proud. Everyone is smart and everyone has very good tools.
So what makes me special? Am I the patsy?
2. As Pulak Prasad pointed out
There are researchers in the Arctic who have dedicated 2 generations of lives in pursuit of a single goal. And then after 60 + years, they were proven wrong.
And here we are, with our money and our chutzpah betting on businesses run by people who are actually in the know.
3. My own research of investment performance of some greats has shown poor to mediocre performance for elongated periods after having done well.
So, it reminds me of the superinvestors of graham and doddsville.
That for the longest time, there are these monkeys which survive.
And hence the monkeys start believing that they are great; until at the subsequent roll of the dice another segment of monkeys falls off.
At which point, the remaining praise themselves.
And so it goes on.
Takeaway: If I get the finish the game on my terms - that should be the goal.
4. Lastly, something I read recently on FT.
https://www.ft.com/content/7b95cdab-7546-432f-b4a1-6509e7648ec5
The purpose is to play. Come up with constraints and then play that game.
I juxtapose that onto what my friend Karthik had said:
We are lucky that we can aspire to be gentlemen of leisure.
I often remind myself;
I would like to read, learn, play to my strengths and make some money along the way.
And now another goal that is paramount: Engross myself in life with my family.
The snowball will roll as long as nuclear war is averted and I don't blow myself up.
"You dont know anything!" - My daughter sang it for me recently.
I hope you dance https://www.youtube.com/watch?v=RV-Z1YwaOiw
