The playbook

Here, I analyze and lay out economic facts that shape my current and future thinking of how to better manage my portfolio

(03/11/2025) As we approach an era where tech stocks are reaching an all-time high, this is something to note as it may be an indication of a tech bubble. For context, NVDIA is worth 5 trillion. That is more than many countries GDP combined. To make sense of such an astronomical figure, China being the worlds consumer goods manufacturer has a GDP of USD$18.7Billion in 2024. Reflecting its status as the second largest economy and it pales in comparison to 5trillion US markets are at/near all-time highs. On the other hand, US is in 38 trillion dollars debt with interest expense alone amounting to 1.3 trillion. In context, that is more than the annual military budget of 1.01 trillion. This alone is a major economic issue, which the stock market certainly does not reflect. One major assumption is that the stock market is run mainly by private corporations where else the government institutions are mainly run by the government. Private is simply more efficient and/or craftier than the government. Seeing corruption end before I benefit from it. Sigh:(

The US Government has incurred up to $1.7trillion this fiscal year (2025) and still caused the government to shut down. How can one have that much money as a spending budget and still the government does not have enough money to agree on various bills which caused the shutdown. Another very illogical event.

Second major assumption, due to the sky-high debt that US if facing, the stock market has become a supplementary source of income/quick cash to help ease the financial burden of the government. That when a crash happens, people will lose their money to the markets which then flows to the government by means of revenue taxes. Therefore, it might not be very wise to hold a heavily traded/speculated stock long term just for capital gain unless I have a very low entry point. Even then, much of the unrealized gain might disappear.

Therefore, moving on, swing trades in the duration of months would not be a bad idea given this illogical and high level of uncertainty. For US markets, some can be sold at the peak just to realize some profit. Part of the game here is an ease of mind. Realizing some profits gives me an ease of mind and keeps my emotions in check understanding that parts of my re-investments are purely on returns thus, allowing me to think rationally and make sound decisions and not out of emotions. It would be horrible to embark on a clouded judgment.

(5/11/2025) New strategy for bracing against the highly talked about and arguably anticipated AI bubble. The goal is to gradually pivot away from AI stocks by limiting my current weightages and focus more on consumer, healthcare and industrial sectors. When a bubble occurs, it’s not a guarantee that every sector or asset class will collapse. Market funds tend to flow to such undervalued sectors or undervalued companies in these sectors. My goal is to be there before it happens.