The first Daily View of 2025.
Item #1: Polymarket gives 23% odds of Trump creating a national crypto reserve in his first 100 days.
Betting “no” is like picking up dollars on the sidewalk. I have already placed bets on this contract, expecting to earn an easy 20% in the next 100 days as nothing happens.
From the comments, he’s right:
Others are more optimistic:
But this is Trump we’re talking about. He could be given next week’s winning lottery numbers and still find a way to mess it up. Also, he has never liked crypto. Having used the ‘crypto people’ for votes and donations, like a used pregnancy test, has no more use for them. Look at Musk’s about-face regarding Twitter free speech. What started out as a disagreement about H-1b visa policy led to at least five large accounts losing their blue checkmarks and monetization, as well as other accounts losing gold checkmarks or being banned. What makes anyone think these people are going to follow through or have solid principles about anything.
Item #2: Are stocks overvalued?
Does it matter? I argue it does not matter. Pundits have been warning for the past decade that the US stock market is overvalued, as stock prices have continued to surge year after year. Good thing I ignored those people. I have found it pays to be optimistic and stay invested. Pre-2010s, FAMNG did not exist. Times have changed, favoring higher valuations for bigger companies due to market dominance, moats, and growth. Investors will pay a premium for the peace of mind and certainty of investing in companies that are not at risk of losing their competitive advantage.
Regarding fears of debt crisis, America is an outlier in this regard. Other countries have had major inflation and currency collapse. It’s why predictions of ‘US debt collapse’ never come true, although it is a real risk elsewhere.
Waiting for something bad to happen and sitting on the sidelines often means missing out or having to re-enter at a much higher price. People are terrible at predicting the future. Let’s assume you sit out of the market for fear of a crash due to inflation or the market being overvalued, and then the market surges 20% that year. Now you need a crash just to have an opportunity to buy back where you originally sold. Good luck with that. Each year that the market rises decreases the probability of ever having an opportunity buy back at that original price where you sold. Basically you’re screwed.
Item #3: US housing market is mirroring 2008 bubble–real estate analyst.
Again, another useless forecast. Haven’t they made this prediction every year since 2010 or so? Not exactly useful in terms of actionable advice. Like above, odds are you will be sitting on the sidelines as prices keep going up, or sell too soon. Even Covid and other major events failed to put much of a dent in long-term prices. I remember so many experts were certain home prices would crash in 2010-2020, yet I was right again, such as in 2015, in predicting higher prices.
As for risk of inflation, mortgages are a great hedge by locking in a low borrowing rate and then inflating it away. Real estate is a great hedge against almost everything. AI will mean increasing concentrations of wealth, benefiting high-end real estate. Unlike the pretend scarcity of crypto, physical land and desirable locations are actually scarce.
Item #4: New Orleans vehicular terrorist attack and Vegas Cybertruck explosion. It’s events like this that periodically remind us that diversity is still America’s strength. For all the hype about AI destroying humanity, we seem to do a good job at doing so ourselves.
Item #5: Elon Musk dubs himself “Ozempic Santa” as weight-loss drugs go mainstream.
Elon is right about Mounjaro. The predictable criticism in the replies on Twitter is the typical ‘crabs in a bucket’ mentality. The data on the efficacy of ‘diet and exercise’ is incontrovertibly poor. It’s not like trying to debate if masks or social distancing worked during Covid, in which people can find isolated cases where maybe it worked at mitigating Covid–the data on dieting is unfailingly poor. In many studies, a ‘success’ is defined as a 2-4% weight loss over a 6-month period, which is pretty much indistinguishable from water weight or other daily fluctuations. Sure, maybe it works for some people, but the vast majority of dieters lose little, or what little is lost is quickly regained. GLP-1 drugs help tip those already abysmal odds. It’s not so much about Mounjaro being a crutch, but making the game more fair, as the odds are already so stacked against dieting. It’s no more cheating than studying for a test.