While TACO fires the statisticians to allow him to cook the books, the tariffs are just starting to take effect. A slight hit to the employment rate and price inceases becoming evident, the US market is showing preliminary signs of a slowdown, despite the SP500 hitting a new high of 6480, and YTD growth now finally above 10%.
We are selling down some mediocre assets to 10% of the portfolio on the following basis.
- Right now, upside over the next 6 months may be just 5% or so.
- Downside however could be a quick 5-10% loss or more as reality of a fall in the US economy exceeds that which TACO can cover up – loss of workers to build housing and farm crops, people losing hours and employment irrespective of what the cooked published figures will say, tariffs flowing into pricing reducing purchasing power.
- The consequent lower profits can NOT be obscured by dodgy statisticians, and the share market will suffer.
We figure the balance is in favour in having some cash available to swoop on some bargains that might arise over the next 6 months.