If you are not an investor you are a speculator. Investors try and gauge current and future value and buy that value if its cheap on the basis that time will bring the price into line with its value. Not many people like to take that route and for every disciple of Buffett or Graham there are ten denizens of the Robinhood merry-go-round looking for the next stock ‘horse race’ to begin. The key to the latter path is speculation and many call it gambling and for many it is.
However Speculation is core to investing too, because most of the Axioms of the markets are unproven or even if nigh on proven, not much followed or believed in. All variables are estimates and some of those estimates may as well be guesses and guess are speculations. If it wasn’t so, shares would have charts make up of smooth curves and vertical repricing, yet instead stock p[rice charts are full of fibrillation like the trace on a seismic graph tracking the activity of a slumbering volcano.
Lets face facts, you don’t want to read me predicting that over the next 100 years technological progress will slowly but surely bring the stock markets to ever increasing highs, so buy the index and go on your way. You want a spicy prediction.
So here is one.
November 5th 2024 is what will drive the US markets from here on in. normally there would likely be an element of that because historically new Presidents are said to smash the market in their first 2 years so they can juice it into their re-election run. Happily the mind has only a vague memory for pain, thank goodness, but it certainly knows when times are hopping! So the US election cycle has tended to have the initial 2 years deal some pain in the market, followed by two good years leading up to the election. You can certainly see that in the current cycle if you want to, so lets bank that idea as a solid axiom.
As such this bull should continue
AND……
It has to be faced; Donald Trump absolutely terrifies the US governmental system. Whether you support him or don’t, you can probably understand why. As such you can easily think they will collectively move heaven and earth to avoid his re-assent into the White House. While the internet might see this as a conspiracy, it doesn’t have to be, because with passive group consensus, actions simply emerge from the hive mind. You don’t have to have secret meetings for lots of people who make policy to understand that a strong market will help the democrats keep the White House and thus encourage them to support it, even if subconsciously.
As such the speculation is: The Market will stay bullish and avoid meltdowns at least till November 2024.
So lets look at a chart.
What strikes me with this simple extrapolation, is hope ‘white board friendly’ it is.
“SP500 6000 by the election fellas!”
Well I’m certainly not going to fight it, if the trend continues.
Now this speculation does depend on Trump’s progress. If he gets knocked out as a candidate, an eagerness to have a rampant bull market support the Dems will be significantly diminished.
Then of course there are always other emergencies that could put a bend in the trend. However, without these ‘deus ex machina’ if you want to call the next 18 months of market action, this is a speculation worth adding to your calculations.
Most of us feel that current markets are highly ‘curated’ that is to say no longer ‘free.’ As such the ugly hand of politics can only become a bigger and bigger factor. Its sad but it foolish not to consider them, especially with an historic US Presidential election on the horizon.