I’ve gotten swept away by the holidays (happy all of them, by the way) over the past few days. So I haven’t had a chance to complete my ruminations about what 2025 has in store for us as investors. My basic idea, though, is that we’ve had two fabulous years in 2023-24 (admittedly after a ~20% decline in 2022), so some consolidation is in order. This typically means that individual stock selection will be more important than industry/sector selection and that there will be some reversion to the mean (i.e., previous outperformers correcting and former laggards catching up). As far as industries go, for the first time in my career, which began in 1978, I find electric utilities interesting. I’m also content not to have any oil/gas exposure.

The biggest wild card, in my view, is how President-elect Trump will act when he takes office. As I see it, he is deeply beholden to three mutually incompatible groups: white supremacist evangelicals, some of whom seek to trigger the second coming; tech billionaires like Peter Thiele and Elon Musk, who seek to enhance their business prospects; and the foreign governments that are supporting his middle east and other overseas real estate projects. It’s also possible that the Republicans are following the Democrats’ lead and disguising their leader’s steep cognitive decline.

So I find it hard to guess what he will actually do, once in office. His tariff plans will presumably protect Tesla from the competition it faces in other markets, but they–along with his plans to deport large numbers of non-citizen workers–are also most likely, I think, to tip the country into recession. The real question here is “how deep” rather than “whether.” More reasons no to deviate far from the structure of the S&P 500.

Substack

I subscribe to a number of Substack feeds. Recently, I’ve been getting solicitations from authors who claim to be working professional portfolio managers who are willing to sell their insights, and at least elements (if not all) of their portfolio construction, to Substack subscribers.

Three issues:

–is there any part of this that’s true?

–professional portfolio construction is usually a collaborative effort among securities analysts and portfolio managers, under the supervision of a chief investment officer. So the information on offer through Substack is most likely not the writer’s intellectual property to sell

–almost by definition, a professional money manager will have clients. Institutional clients will be paying, say, 1% or 2% of the assets under management as a fee for services; private clients may pay more. Why would anyone risk undermining that business by selling the firm’s intellectual property for a few bucks on Substack?