Change Everything
A manifesto for halftime
Less than 1% of American adults set and keep New Year’s resolutions…for a full year. That’s according to Perplexity AI.
The topic, the thing you resolve to do differently tomorrow, takes up most of the chatter at festive parties. Tomorrow’s the big day when everything changes. But it doesn’t.
People feel good talking about the idea of making changes. It gives them hope, and people love hope. Western adults especially love it. 99% of them seem to value it more than an actual change of circumstances.
When it comes to resolving to do something later, weight loss leads the pack. Smoking cessation used to be a top ranked resolution. Drinking less morphed into Dry January, which usually lasts until about January 4th depending on where the next weekend falls. In all cases, the root behavior never changes. Wise people know, what the masses say is not what they do.
But not always. There is that 1%. The resolution keepers. The ones who came to the cold hard realization they were truly what rational people call “fat,” or were part of the statistical group dying from some habitual behavior, and decided they didn’t like it. So much so they’d do something about it. Those people actually do change.
It’s easy to miss them, because they don’t talk about it. They tend to change things quickly, and quietly. It’s almost as if they recognized something so alarming, they’d rather not discuss it. Years of clueless behavior stops on a dime. With no chatter. Watch out for those people… they’re never going back.
It’s due to awareness. Someone overhears you ask for the seatbelt extender on a flight, some brutal brush with factual reality…this is catharsis. Once you see the situation for what it is, you can’t unsee it.
Today’s a great day to change. Or the way you’ll later talk about it, a great day to “wake up.” To stop living in dreamland, dragging yourself through the calendar, relying on hope, blame, and excuses to get by.
Anything worth doing is worth doing now. Not at midnight, not tomorrow, or some pushed off future time. With your glasses un-fogged… it’s now or never.
Halftime At the Money Bowl
Nobody talks about midyear resolutions.
It’s just as good a time as any to adjust. To take a sober look at things before getting on with the second half of the year.
Halfway through 2025 has most people somewhere between dazed and crazed. You might remember Coffee Shop Kate, who asked in late March if “NVIDIA (NVDA) would go back to $150?”
For just a moment, imagine what it’s like to stroll into your favorite coffee shop, in your neighborhood, pick up a lingering copy of The Financial Times, having intentionally left the phone back at the apartment… and face this type of question… From a neighbor you don’t particularly know… who clearly owns too much NVDA and right now only wants to know if it’ll go back to $150. It’s akin to being flagged down by a carnival barker to guess the weight of a pinned animal.
At the time of the question, NVDA traded for ~$120 down from a recent ~$150. It had a freshly formed death cross on the chart. This is when the 50-day moving average (pink) falls below the 200-day (yellow). It’s a bad sign. In this case, shares fell another ~25% to the low ~$90s over the following two weeks.
Kate got an answer she didn’t like. Based purely on the chart. Likely direction, down. Two weeks later, it looked accurate. That fall to ~$90 was gravitational.
Eight weeks after that, it’s at a new high of ~$157, beyond her badly desired $150. She probably moved the goalposts at some point anyway. Which is common with non-professional stock owners.
For reference, at the time of the question the company singlehandedly made up ~5% of the entire value of the U.S. stock market. Meaning the ~38% fall and ~60% rise in merely three months is an indication of serious financial whiplash.
Kate no longer responds to customary salutations at the coffee shop. Which is a neighborhood place by the way. She gives the old, can’t hear you because I have headphones on gesture. Which we all figured out a while ago is not true…
But it might be for the best, as the March interaction was just another nuisance disrupting a sacred and well-deserved, gadget-free, chocolate croissant and espresso ritual. This type of unwanted disruption happens all too frequently.
People make subjective money decisions, and then look for external validation from strangers. Being on the receiving end of it gets old. Mostly because they never share any of the profit, only the blame.
What you buy is your business. Knock yourself out. The profits are yours, but so are the losses.
NVDA seems like the world’s best chip company. However, ~$3.85 trillion feels like a lot of market cap.
The entire U.S. stock market is only ~$64.7 trillion as of mid-day Monday. Which was the end of the quarter, and the first half of the year.
That chart looks a lot like NVDA. It’s hard to tell which one is the leader.
Perspective Shift
Kate probably doesn’t read TTL. We’ll know for sure this weekend if the headphones come off, abruptly. Either way, she should join up, and she can afford it.
When it comes to money decisions, the trick is, ask better questions. It’s not the is NVDA going back to an arbitrary $150 that helps you see clearly. Or the worst question of all, what stock is most likely to 10x soon… People really ask that, it’s unbelievable.
The whole notion of quick gains is the root of the problem. When she didn’t like the NVDA answer Kate asked for the, “best idea” which subscribers know at the time was the world’s largest concrete company…set to spin off its American division by quarter end. That idea only produced a ~15% gain for the trust through quarter end, which was Monday. The gain includes a hefty dividend in early June.
15% in 10 weeks is a sorry excuse for stock performance… in modern America.
There were times when people sat with a financial advisor who argued the stock market rises ~6% per year over a century. People fought that. They reminded the licensed advisor wearing an ill-fitted suit of 1929, 1987, 2000, and 2008…proudly claiming to know with certainty money is at risk when it owns stocks.
Not anymore. 15% in 10 weeks gets you the earphone treatment.
This is the YTD performance for the Trustee Portfolio…which many people say is not enough. (Symbols scrubbed out of respect for regular and Founding subscribers)
For reference, the S&P 500 Index (SPX) is up 4.96% through Monday’s close. That’s the official halfway point for the year. Include dividends and it’s a clean 5.5%.
Time is money, or it used to be. 5.5% from the index over 26 weeks should be penalized for taking so long. The 15% on our concrete stock only took ten weeks. But who’s counting…
The bigger question is around the market conversation you’ll have at NYE 2025, six months from now. Nobody can think that far ahead anymore.
Even a good guess at the answers might shed light on what you want to own, or not own, between now and then.
Halftime Predictions
We’re going on the record with a few predictions for the second half. Quote them, bookmark them, print them out, and feel free to either toast or roast us this New Year’s.
Fair warning, we’re not predicting NVDA $175 or any other arbitrary stock-at-a-price type thing. It just doesn’t matter. If the overall market rises, it’ll probably take NVDA with it. Or if NVDA rises, maybe it takes the market with it... However, we expect the market to go nowhere.
People brush off 15% on a concrete company spinning off its American business…which we’ll own for a very specific reason in the second half of 2025…as you’ll see below. Yet they’ll send part of their paycheck into an index tracking fund going nowhere.
The S&P 500 Index (SPX) doesn’t look great. Even the dramatic recovery from April lows still shows a death cross… which could prove a short-term ceiling.
Stocks may chop and flop frustrating index buyers, the crowd who chips off part of the paycheck into low-cost funds the way Jack Bogle told them would always work… this crowd is a ticking time bomb. They tend to be unaware owners, waiting too patiently for something they think is a guarantee. Only later to lurch at just the wrong time.
This chart tracks SPX over two years. The 2025 action is nasty. Closing the quarter with a high that’s ~1% above February isn’t saying much when paired with the April jolt.
People who sat still in the index missed a massive opportunity compared to single stock buyers.
As of now, the spoils go to people who bet nothing ever goes wrong. It’s an era of 36-hour wars, smoldering conflicts that never flare, oil that flows more when missiles fly, and gold supplies that grow when mining companies produce less. The message is, ignore all risks…
Meanwhile, the index sits idle taking in trillions in passive money flow. Plus, foreign owners make up ~10% and may opt out at any time. This heaping pile of equity might not increase in value while chopping around the way it did in April. If that happens, index buyers have risk with no return. Factor in inflation and it’s even worse.
So far, it’s the kamikaze stock buyers, who believe every panic is a hold your nose and buy situation… that crowd cleaned up in Q2.
We bought one stock in March up ~47% and another in April up ~23%. Our mistake was in balancing the opportunity against the risks…
Gold Knows the Truth
Then there’s gold. After a big run, it looks range-bound. A very boring range at that. Meaning, it already did what we’ll later think it should do.
People give all kinds of answers on why the price moved ~60% in a year. Many point to central bank buying. Perhaps, but nobody really knows that for certain. The paunchy dictators running most countries are unlikely to submit to an audit.
It’s not from retail demand…which is extremely weak. Dealers say you can get as many coins as necessary, quickly. Some tell me they “swim in” common coins as holders from a decade ago unload after waiting far too long for new highs.
Except for one dealer, Gainesville Coins, who flashes a large warning on its website noting a “5-8 week delay” in delivering those common coins flooding other dealers.
Don’t flatter yourselves… the prices aren’t that low. I know because I bought 20 coins from them over Easter weekend, April 20 to be exact. They confirmed receipt of my wire transfer the next business day. Ten eagles, ten Krugerrands. It’s a simple order.
As of this Monday, we’re in week 11. Half the order arrived in mid-June. The other half is evidently soon to depart Buffalo, NY. We’ll see. The attitude when contacted has the flavor of, “sue me.”
Obviously, this will be my last transaction with the company. My first was 17 years ago. It’s a stunning turn of events for what was otherwise a pleasant business relationship.
If you can’t deliver a product, and will not return customer funds… just don’t do business. It’s shortsighted, and often a sign of trouble.
Sort of like the trouble this gentleman ran into. He happens to have the same last name as the brothers behind the company I’m having trouble with. And lives roughly in the same area. But it could be a coincidence…
Sadly, this type of things happens. It’s why being principled about business behavior can save you a lot of headaches down the road. People who conduct themselves in a respectable manner tend to make plenty of money, and avoid big headaches…like going to prison.
If the final half of my order arrives, as now promised by automated email, I’ll test the coins using my Sigma PMV Pro. The Tucker kids love watching me use it.
Considering the circumstances, verification seems necessary.
Plus, this whole situation is a great reminder that nothing is permanent. Not in life, and certainly not in business.
Things change. If you stay awake, you can change with them. If you’re too busy to pay attention, you’ll feel bamboozled and look for someone to blame.
A good review from a book you read five years ago might not be valid today. It’s wise to stay skeptical when it comes to financial decisions.
As for gold, we’ll sit tight. We bought before the ~60% revaluation. Upward revaluations are always more fun than downward.
Gold sniffs out events before they happen. In 2008 it ran to $1,000 five months before the September turmoil. In 2019 it moved up before the Fed’s September repo drama. Then it ran to ~$1,700 in early Q1 before the onset of the flu panic.
This move, ~60% in just over a year, signals something big. Likely an intervention into borrowing, lending, and the engine of commerce we’ve never seen before. If gold priced that in advance, it might not move much when the actual news hits.
Watch The Curve
The action in gold often comes before the headlines. Meaning, we might soon know why it ran ~60% in a year.
Gold owners have a kind of pre-insurance for fiscal chaos. Chaos in the case could be a forced correcting of the yield curve.
Like grinding down crooked teeth instead of waiting out the orthodontic process, shaping the yield curve would incentivize development, risk-taking, deal-making, and financing for projects of all types.
Yield curve refers to charting the cost to borrow for various periods. From 30, 60, 90, 180 days all the way out to 30 years, this is the cost to borrow two years ago, mid-2023.
Notice the excessively high cost to borrow for a short period… and lower cost to borrow for a longer period. That’s unusual.
And this is the same charting of the cost to borrow today, mid-2025.
Almost “normal” again.
Then consider the recent headlines. The ones picking on the Federal Reserve Chairman. The ones needling for two rate cuts. Specifically… two.
Two cuts would drop the front of the curve down, normalizing it. It’s what the Tweet-machine at 1600 Pennsylvania Ave wants. And we think he’ll get it… likely before he appoints a replacement Fed Chair.
Listen to the Promoter in the Second Half
The chief is a real estate promotor, by trade. Try to tune out news headlines and tune into reality. He telegraphed most of the market action so far, and people did not listen.
The promoter in chief’s son-in-law sits on the board of a company called QXO Inc. (QXO). While we can’t know how involved he is, the ~$15 billion company looks like it has his attention.
QXO either bought or is about to buy both Beacon Roofing and GMS. If you’re in the commercial construction trade, that means it’s aiming to own every new roof in the country.
We’re not buying those today…we can do better.