We posted a gain last week with the S&P 500, while interest rates climbed higher. The summit in China seemed to be a slight distraction with little to report.
Of interest was the saber rattling by China over Taiwan. It seems that China will take the island.
They may treat Taiwan much like Hong Kong until they finally take over and run it as the totalitarian province they see is their destiny.
It only makes sense for Taiwan Semi to continue to make investments in the US to offset the inevitable nature of the situation.
It is somewhat akin to what is happening with the U.S. efforts in Venezuela and Cuba.
Focus on what is close to you as a priority.
I have for long wondered why the U.S. hasn’t emphasized the countries in the Western Hemisphere.
It is only of late that the U.S. has started to put up road blocks to China’s incursion into the Western Hemisphere.
Given the resources available in this region, it only seems logical.
It is also much more within our ability to defend and protect.
I think this theory is gaining traction as natural resources become more important and that is not limited to energy.
Speaking of trends, we woke up this week to the announcement that Next Era and Dominion Energy creating the largest regulated electric utility business.
Just another example of how much AI has moved the needle as it relates to consumption of electricity. God bless the environment, but there is money to be made is generating electricity for all those data centers.
EVs and renewable energy was all the rage as it was seen as the next big arena for new development and capital until the whole scenario changed.
The investment community packed up and moved on. It was quick and swift.
The lure of profits runs the show.
You can hardly find a news story about the environment or climate change today.
Profits drive the train forward and it is remarkable how unpolitical it can be.
It is why I hold Milton Friedman and his beliefs in free enterprise over big government as almost scared ground approximate to a religion for me.
As a fun distraction, we have the Sam Altman and Elon Musk trial over the construct of Open AI to amuse us.
We need something, as last week’s inflation data was sobering if not outright scary.
Inflation is not as it was described as raging, but energy is having its way. There is just no denying the impact higher energy prices are having on our lives.
It is cringe worthy to visit the pump and no removal of the gas tax will save us.
There is only one answer and it is a resolution of the conflict in Iran.
I just find it hard to believe that with the elections coming that this can go on much longer, but I never thought we would be here heading into the third month either.
So much for my prediction skills.
Kalshi won’t be getting any of my money. I learned that hard lesson years ago in college collecting for a sports book.
I will say there is a growing concern that no matter the growth of AI that a day of reckoning will come for the markets.
I almost laugh at myself, as I was certain that way would have come already.
Again another example of my prediction skills.
It does however make one start to think about taking profits and the tax consequences.
I listened in on a Zoom conference call about Tax Loss Harvesting to protect capital gains.
I’m not sophisticated enough to grasp how you can lose money and come out ahead. I have been in the investment business for over 40 years and have seen all sorts of tax-loss proposals.
I have yet to see it ever work.
Why would you ever want to intentionally lose money to cut taxes?
It may not be fun paying the tax, but at least you were on the right side of the trade. There will be far too many who have tons of tax loss with little or no gain.
The fun part was trying to get the presenters to explain how it really works.
Always walk away from someone who can’t explain something to you in simple terms you can understand.
