Well, less than a year ago, the leader of the free world had this to say about the market:
“We are in a big, fat, ugly bubble. And we better be awfully careful.”
At the time, the Dow Jones was trading at 18,000 points.
Recently the Dow broke through 22,000, but this time Trump tweeted triumphantly:
“Stock Market at an all-time high. That doesn’t just happen!”
Well, we all know the Tweeter-in-Chief has four of those before breakfast. (And if you’re trying to make sense of any of this, you haven’t been paying attention.)
Whether Donald likes it or not, the share market has a nasty habit of crashing (on average) every 10 years or so:
1987 was the Black Monday crash.
1997 was the start of the Asian Financial Crisis.
2007 was the start of the Global Financial Crisis.
2017 is … well, let’s not get carried away, because, just like the Trump presidency, there’s no logic to any of this.
(Case in point: the ‘tech-wreck’ happened around 2000, which didn’t fit the 10-year pattern.)
Again, to be clear, I’m not saying the share market is going to crash this year.
However, I am growing more cautious, and taking my cues from another US billionaire …
Warren Buffett’s Berkshire Hathaway currently has $100 billion in cash in its war-chest. That’s the most they’ve ever had. As a percentage of Berkshire’s assets, it’s actually more than the prescient pile Buffett went into the GFC with, when he made good on his motto: “Be greedy when other people are fearful.”
Tread Your Own Path!