First of all, Happy New Year!!!

For us as investors, the gains of 2024–the second fabulous year in a row for most of us with holdings in the US stock market–are now in the rear view mirror. So our task is to blank those results out of our minds and plot a strategy for 2025 de novo.

As always, it’s important to remember that the key to stock market success is to know more than the consensus–i.e., a lot–about a few things rather than a little about a whole bunch of stuff. The latter is a recipe for investment disaster.

I’m not in a great rush to change my portfolio a lot. I’ve recently sold the last of my WMT, shifted about a third of my NVDA into AVGO and trimmed HOOD (I intend to sell more but want to scale up), but am content for now with the relatively aggressive (which is the norm for me) structure I have. I’ve added a few you-can’t-fall-off-the-floor names (one of which continues to plumb new lows). I believe I need to become more defensive, but want to see how the new administration is developing before I do so. For once, I think politics may matter, since what Trump talked about on the campaign trail is so economically toxic, in my view.

Stuff I’ve learned over the holidays:

–30% of Americans can only read at a 10-year-old level

–a large number of people who borrowed at variable rates, typically a credit card, during the pandemic are in real difficulty as rates have risen

–I stumbled into Pacific Basin stock markets in 1984 and took over a global portfolio in 1986. For the next 20+ years, global was the place to be. Then I retired. Since 2009, though, the US has been the only game in town, trouncing international markets year after year. Maybe it’s time to look abroad again. Japan?

–for all his talk, Trump was a deportation piker compared with his predecessors Obama and Bush. Even Biden accelerated deportations from the low level Trump left them when his coup attempt failed. This is the essence of my hesitancy to change my holdings. What will/can Trump do?

–Trump’s ultra-wealthy supporters are talking up the strong economic growth during the Gilded Age of the late nineteenth century, when tariffs were high, there was no income tax and unions were few and far between–and arguing we should adopt the same playbook. They ignore, however, the much higher economic growth of the post-WWII era, which featured much higher income tax rates and powerful unions.