My overall impression is that it is.

Why do I think this?

–I decided in early 2024 to run a concentrated portfolio for myself. It’s done well. I haven’t written much about my holdings, for several reasons: I’ve wanted to have the freedom to change my mind quickly, I have little idea of individual readers’ risk tolerances, and, not least, I’m no longer a registered rep.

I have written about Robinhood (HOOD), though, when it was a $10-$15 stock. At the time I viewed it as a badly managed company. But it had a brand name, an unusually strong appeal to younger investors and a book value (basically, what shareholders might expect to get in liquidation) of around $10. This was a time when better run but more mature discount brokers were being acquired at 3x book. So, a classic value stock. In this case, the owners woke up, however, hired professional management and instead of being acquired at, say, $40, the stock is closing on $150. I’ve sold most of what I originally bought, but still have a tag end.

My point is that having a few of these colors my view of how the market is trading, much as I want to screen this out.

–the market is highly skewed, as a result mostly, I think, of administration economic policy:

—one aspect is the use of ICE to discourage foreign workers, especially of Hispanic origin, from entering the US and imprisoning and deporting those already here. Given that the domestic birth rate is maybe +0.4% of the population, this does two things: it puts a very low ceiling on the possible rate of GDP growth and (the closest I can get to a stock market silver lining) it thereby makes research on robotics that much more urgent.

—a second is tariffs on imported goods, not only in themselves but also as a replacement for taxing the incomes of the ultra-wealthy. In general, the wealthy save rather than spend, so giving them more money doesn’t spur growth that much; and regular people have less to spend, so they either stay home or trade down. All of this causes GDP to be lower than it would otherwise be

—a third is to launch a repeat of the 1970s strategy of lowering interest rates sharply as a way of reducing the payments on outstanding Treasury debt. Fear that this will trigger another bout of runaway inflation is the main reason, I think, that the USD has lost 1/7 of its value vs foreign currencies since the inauguration. This, of course, makes many imported goods that much more expensive.

How to deal with this situation:

–the best rule of thumb for investment success in this situation is to own companies that have costs in a weak currency and revenues in a strong currency. The most straightforward way to do this is to export. The worst situation is to have costs in the strong currency and revenues in the weak

–a second is to own companies that may not be in this position now but who have the flexibility to shift production into more favorable currency areas

–a third is to look for foreign-based substitutes for US-based companies

All this is already, in my judgment, a “crowded trade,” meaning everyone who has wanted to rearrange their holdings into the most favorable currency/tariff configuration has already done so. The biggest beneficiaries, in my view, have been US tech, especially software, and foreign companies in more favorable regulatory environments. China, I think, is the most important.

betting on Trump?

This is a case of taking off my hat as a human being and putting on my hat as an investor.

I think at least part of the upward move in the bet-on-US-stocks-and-bet-against-the-physical-place-USA strategy comes from the recent performance of Trump and Hegseth in front of assembled professional career armed forces leaders. This is a group of keen evaluators of others’ strengths and motivations. I don’t think it went well at all.

Still, I think we’re probably close to the end of the Trumponomics trade. The final shoe, I think, will be what ultimately happens with the Federal Reserve.