Every time I think about trimming to lock in profits @jcmleng (in the context of macro policy) I get stopped in my tracks by the thought of paying tax. Whether it be a supposed bear market +/- depression or company overvalued. I really struggle to sell or trim if I have a long time horizon on the company. I had a nice -12% at one stage for my full AUS portfolio on monday. Wasn’t particularly fun but what it made me realise is I find myself biased to selling companies with a loss whose thesis I am a bit more on the fence about and putting them into a company on that same day that I have more conviction on. So this decreases tax in the future for companies that have gained, or are gaining. But this comes with the risk of further concentrating my portfolio (hopefully in solid companies). This seems to be how I get my capital in a time like this, if for some reason I don’t have any dry powder. I haven’t sat down and done the maths on it properly, but most of my winners I have held for greater than 12 months which means I have a 22.5% tax if sold, so based around Mikebrisy’s recent post about average bear markets I’m only 7.5% off an average one if I sell anyway in real terms. (taking a few liberties with the maths of this and opportunity cost of compounded redeployed money). Obviously, trusts/companies can change things up for people depending on their circumstances but this is my situation at the moment.

Even if this is a dead cat bounce, I’m mostly happy with my companies apart from one. Which is impedimed. High time I wrote about it actually. (I’m afraid I have to do a bit of updating on my strawman portfolio to mirror life).

@tomsmithidg Ive been investing for 40 years, hundreds maybe thousands of trades, ive picked the top/bottom maybe 10 times. if you see a fat pitch swing, timing the bottom is pure luck, imo. then be patient. the way its always been

I'm not making any predictions.

But if China refuses to withdraw their reciprocal-reciprocal tariff, and Trump goes ahead and implements an extra 50pc on China, then whatever moves we see today, all bets are off for tomorrow. I don't think for one minute that Xi will back down. That would be a huge loss of face, and it would be a win for Trump that Xi would never allow. (Both Putin and Xi will greatly "enjoy" playing Trump.)

There is no question in my mind that the CCP has been wargaming a trade war with the US, ever since there was the prospect of Trump returning. So I believe every Chinese response will be deliberate and calculated (and rehearsed). US destabilisation of world trade, while very disruptive to China's 15% of exports that go to the US, can be managed. Exports from China to the US account for less than 3% of Chinese GDP, and imports from the US are only 1% of Chinese GDP. So Xi has no need to "blink" in a tariffs duel with Trump. The more crazy Trump acts, the more it makes China appear sane and reliable to the rest of the world.

This is massively important for China for its standing and future deals with the global south, and even to re-warming relationships with the West.

The wider process of bilateral discussions will take time. And Trump has hardened in his rhetoric. I don't think he will cut quick deals unless they demonstrate capitulation. For example, a mutual zero tariff deal being mooted by the EU won't be enough. He has reiterated over night that he has only one shot at this, and that he is the only president who can do this. He has dug himself such a big hole that even if he decides to climb out of it, that will take some time.

US voices against tariffs are starting and growing (e.g., Dimon, even Musk, Wall St generally). But I think that as long as Navarro and Lutnick are in place, Trump will have enough of an echo chamber around him that he won't turn.

What might move him? Bipartisanship in the Senate and House to act against tariffs? Strong negative economic indicators? Strong disapproval rating, A combination of all. That's likely to take weeks and even a few months to become clear.

After two terrible days on Thursday and Friday on Wall Street, yesterday was taking a breather. You can see how jittery the markets are in the "false bounce" that occurred when there were rumours of a 90-day reprieve on tariffs. It lasted about 40 minutes!

So, I'm expecting volatility up and down over the coming weeks and months, until the agenda stablises.

If high tariffs are locked in, then recession ... here we come. But whatever the outcome, confidence has been dented, and that is bad for the economy and for investing. I don't think there are winners here. Only losers. (Or smart money in the bond market!)

Not that I ever give advice, but if I did, the first I would give, is make sure you don't lose liquidity. For me, practically, that means having access to cash resources to fund 2-3 years of living, and beyond that non-equities assets that could keep me good for 4-5 years. I don't want to be a distressed seller.

The second advice would be to be very wary of "false dawns". So far, the S&P500 is only down 21% from its peak in February - less than two months ago. During the GFC the S&P500 declined around 57% over 17 months. I'm not saying what we are seeing now is a GFC-type event. But if a global tariff war erupts, takes effect, and the US establishment remains cohesive with Trump unmoved, then I'm certainly not ruling out something like that.

From a risk management perspective, I want to understand that my wider financial position is robust, even in that (arguably) low likelihood event.

Where I am spending my time is studying hard the moves in my portfolio and on my short watchlist. Relative changes in valuations might offer the best opportunities in the short term. (Heck, maybe even $PME will hit my buy price of $150! Now there's a sliver lining.)

Interesting times.

Quite possibly the endgame Putin had in mind when placing Trump in the presidency.

He really is playing 4d chess.

One of the unintuitive things with bear markets is that they are usually when you see the biggest one day gains.

I should update the exercise, but back in 2010 or so I looked at the biggest one day gains over the previous 10 years, and most of them happened during the GFC as markets were tanking.

Nothing moves in a straight line!

@mikebrisy is right re false dawns. Unfortunately, the bottom is only ever apparent in hindsight.

Here's the latest from Air Force One.

Trump Interview

This dude is locked in.