Rebel Capitalist News FED Warns of Market Crash, Trudeau Shocks the World, Global Liquidity Warning
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Jan 7, 2025 Predictions of a potential stock market crash in 2025 stir up discussions about high asset valuations and historical market patterns. Insights into the CAPE ratio reveal concerning trends for investors, stressing the importance of risk management. Political turbulence in Canada raises eyebrows as Trudeau faces challenges from economic downturns, impacting his popularity. Meanwhile, a cool glance at the Federal Reserve's balance sheet reveals significant implications for liquidity, emphasizing the psychological factors that could lead to market declines.
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Market Crash Warning
- Fed officials warn of a potential stock market crash in 2025 due to elevated asset valuations.
- This warning, while seemingly blunt, reflects the current market reality.
Investing Principles
- Focus on risk management, identify your edge, and make asymmetric bets with more upside than downside.
- Evaluate the potential upside and downside of investments to ensure favorable asymmetry.
January Effect
- The "January effect" suggests that the first five trading days of January can predict the market's performance for the rest of the year.
- A positive start often correlates with a positive year, while a negative start may indicate a downturn.