Investing General Discussion

Kirun said:

What other countries? China manufactures 30+% of the world's shit. There are no other countries that can "pull their weight".

This is exactly why China helped form BRICS, so they can tell the US to go fuck itself. The best the US can do is not buy their shit, especially if we see an economic decline(which actually drives US companies potentially even further into "poor" countries, because the US consumer is going to be clamoring for cheap shit). So it causes a few hundred million Chinese to die off/go into mega poverty? You think they give a shit? That's easily sellable to their populace with how that country thinks.

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And yet, Biden even kept the Trump tariffs on China.

I said it in the Politics thread shortly after Trump took office, but the amount of wealth that exits this country is on a level I don't think anyone in the US can even comprehend. It's massive. Trillions of dollars exited our country to prop up the rest of the world.

We're attempting to bring that money back. You say none of the other countries matter, so why do they have tariffs to begin with? Seems like there's some kind of trade going on there, and their tiny governments were looking to take advantage of whatever small trade imbalance they could. Your logic is the same one as to why we shouldn't care about the $20 million research contract that NIAID gives to research some bullshit in Africa, because $20 million is tiny and who cares? Except you take it all in aggregate and you end up with a $36 trillion deficit.

Yeah, putting a reciprocal tariff on Cambodia may not amount to much, but when you do it to every single country that's got uneven tariffs with the US, suddenly it matters a whole lot.

Cad said:

I don't know how much we can trust these things, but I looked up what percent of the US economy is based on trade vs domestic activity, and we come in at 27% based on trade.

The other members of the G20 were way more:
United States: 27%
Germany: 100% (exports 50%, imports 50%)
France: 73%
United Kingdom: 70%
Italy: 81%
Canada: 67%
Japan: 46%
China: 38%
India: 49%
Brazil: 39%
Russia: 47% (pre-2022 sanctions; likely lower now)
Mexico: 85%
South Korea: 96%
Australia: 50%
Argentina: 33%
Turkey: 81%
Indonesia: 45%
Saudi Arabia: 61%
South Africa: 65%
European Union (aggregate): 96% (heavily trade-driven due to internal EU trade)

It seems to me that we are a MAJOR outlier in how trade is handled for us, and also it seems like we could be a lot more self-sufficient than the other members of the G20.

Am I interpreting this correctly in that it seems to me that we could survive a trade war much easier than they could because we are a lot less reliant on trade? Certainly not an expert on this so I'm asking, not telling.

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The US trade-to-GDP ratio (27%) is only about 47.3% of the G20 average (55.6%), making it the least trade-dependent economy among major G20 nations

Supermarkets here are now marking american goods so people know the price is higher due to tariffs. A true trade war has begun. It will be interesting to see how it plays out.

Warren Buffett sleeping well at night.

Gravel said:

Your logic is the same one as to why we shouldn't care about the $20 million research contract that NIAID gives to research some bullshit in Africa, because $20 million is tiny and who cares? Except you take it all in aggregate and you end up with a $36 trillion deficit.

Yeah, putting a reciprocal tariff on Cambodia may not amount to much, but when you do it to every single country that's got uneven tariffs with the US, suddenly it matters a whole lot.

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I'm not saying we shouldn't worry about it. Obviously we should. We should've worried about it 30+ years ago when we started selling our manufacturing base to China.

My concern is that this has no teeth, because the next administration can unwind it in less than 4 years and because the rest of our political fuckwads aren't on-board with the long-term timeline that tariffs seek to accomplish. This is something that'll take decades to see through to fruition. This isn't something that a major company can unwind in 3 years.

And as for the rest of the world, how are they going to "pull their weight"? They can thumb their nose at China all they want, but they don't/can't manufacture any of their own shit, so they are out of options. The US HAS the capabilities, money, landmass, natural resources, etc. But they've put themselves in such a deep hole that it'll take a collective of our political class to be dedicated to unburying it. Do you think that's realistic?

I don't think people understand how fucking massively reliant the WORLD is on China for goods. Roughly a THIRD of all manufacturing in the world is done there. Do you realize how fucking insane that is for the world's supply chain? Look at the shitshow that just a couple years of China Virus caused. We're still reeling/dealing with it to this day. The rest of the world has to eat China's dick, they don't have any options. They aren't big enough, they don't have the money, population, military, etc. necessary to stand up to it for long.

The US does. But does it have the will? When I start seeing the majority of politicians hopping onboard the "FUCK GLOBALISM!" train, I'll begin to believe. But if anything, with everything going on in Jewland, tariffs, etc.? I don't believe it for a second.

And in the meantime, companies are going to use this as an excuse to raise prices and the consumer/middle class get assraped a little deeper. Are some of the hikes warranted? Sure. But just like China Virus. Just like Bidenflation. And now with tariffs, never let a good "tragedy" go to waste.

Jysin said:

Warren Buffett sleeping well at night.

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I sold 1/3rd of my portfolio ~2 weeks ago so I was feeling like this too except the cash is to pay for new windows for my house so I'm not buying the dip.

INTC catching a huge bid on news.

Intel and TSMC tentatively agree to form a chipmaking joint venture, and reached a preliminary agreement to form a joint venture with TSMC, taking a 20% stake in the new company - The Information. $INTC

Apple -10%

NVIDIA, AMD, Intel, etc are all doin the Ralph Im in Danger meme.

Sanrith Descartes said:

Its funny, I see it almost the exact opposite. During Covid black March, we had days like today and it was an emotionally insane day. Fast forward to today and im down a little over 4% for the day and I'm like... "Picked up some AMZN and JPM at a good price, we'll get 'em tomorrow." It really doesn't phase me like it used to. I think its because I have morphed from a swing trader to a straight long term investor.

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I think it's because recently it seems like the algos whipsaw based on absolutely nothing. We get these 2% swings all the time now and then immediately they get reversed in a day or two in either direction. The market is disconnected from reality.

I'm kinda wondering if 15% VXUS was a bad move now. If ex-us relies on US to be healthy and we just impose tariffs that's goinf to decimate ex-us wouldn't it?

My logic with VXUS was that over a long enough time horizon the rest of the world has more to grow than developed markets. Like 50 years from now.

SPY hit 532 in the extended hours. Today is going to be interesting.

Burnem Wizfyre said:

I’m not bright man, help me figure this out. My take home after taxes is roughly 8k a month, $1645 mortgage, $650 car loan, $323 insurance on 4 vehicles, $250 electric $125 water $100 internet and $100 for phone bill. Food for 4 is around $1,000 a month and lets say another $250 for cleaning supplies around the house and shit paper.

I rarely buy shit, last thing I bought was my daughter really wanted a Stanley cup, my entertainment is usually video games that are always digital downloads. What am I buying that’s going to make me feel it in my wallet and if so is it going to be worse than what Biden inflicted on us where I saw everything I listed previously increase, things have been coming down from what I can tell, I’m retarded explain it to me please.

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Shoes if you want just one example, they are almost 100% imported and the capability to manufacture them in numbers required to meet demand does not exist within the country. So a tariff is effectively a tax hike on shoes. Coffee and pepper are other examples.
A lot of it is indirect effects too. If you hire a guy to cut down a tree that job is not subject to a tariff but if the chainsaw and shoes he uses are imported, that's still going to drive up his cost of business.

The hope is that businesses will move factories to the US but (as rightly expressed by others in this thread) who wants to risk building a factory that costs tens of millions when it's dependent on tariffs to compete with Asian factories and those tariffs can be wiped away instantly by either this administration or the next?

The usual way to deal with that is for the government to sign a contract with the manufacturer that guarantees compensation if the tariffs are rescinded, or they guarantee to buy a certain number of products at price X for Y years. This moves the financial risk from the business to the taxpayer which has its own issues.

Even if it all pans out and 10 years from now all shoes are made in America, they will be made by American workers that command a higher wage so the shoes will be more expensive. Even if you like that from a political point of view, it's still costing you money that you can't spend on something else.

I suggest you ignore anyone that paints any of this as a straight win or loss. It's complicated and there are tons of second and third order effects that no one can fully predict.

I'm now net underwater on my portfolio. Urge to ragequit increasing. Also urge to buy dip increasing.