How To Think About Markets Each Year
Why the unexpected matters most
In 2025 – things like:
- Sell everything when Trump starts talking about tariffs.
- Buy everything when Trump pauses tariffs.
- Buy AI and the Magnificent 7 – SEMI up 32%. (FANG only up 6%).
- Buy Asian Tech – DRGN up 29%. ASIA up 38%.
- Buy Korea – IKO up 69%.
- Buy Asia – IAA up 30%. IEM up 21%.
- Buy Gold – QAU, PMGOLD, NUGG, GOLD, GHLD – GDX up 148%. MNRS up 165%.
- Buy Silver – ETPMAG up 129%.
- Buy Platinum – ETPMPOT up 137%.
- Buy Copper – WIRE up 80%.
- Buy Uranium – ATOM up 59%. URNM up 32%.
- Buy Defence – DTEC up 65%. DFND up 56%. ARMR up 46%.
The list goes on.
Simple things that would have taken all the stress out of it and allowed you to prematurely and gloriously make a lot of money without fuss.
You don’t have to wait for Christmas to do this, of course, but it’s as good a time as any to think about the themes and X-factors that could occur. The most obvious themes are those that are already in place; they don’t stop just because it’s a new year, but the real value comes from guessing things that are unexpected, because it is a rule of the stock market that:
“Anything that is expected is in the price, and the only thing that moves a price is the unexpected”
It is the Catch-22 of investment, you have to know (guess) the unknown, because that’s the only thing that moves a share price, the unexpected. You can study the numbers, assess the PE’s, yields, the fundamentals, but to make any money out of that, you have to spot things that no one else has spotted.
But these days, with fundamental information now a commodity (you can get all the numbers and valuations from a hundred places) the “edge” from information and analysis of the information has been arbitraged away by instant analysis and the algorithmic trading attached. The analysis “edge” is minuscule, so making money, more so than ever, relies on you guessing the unknown, not assessing fundamental value.
So without an edge in value analysis, we have to look for insight – something that is not common knowledge.
Every year, there are a handful of these things that you need to know to sweep away all the bollocks, all the financial theory, all the research, all the complications, and all the endless blah blah blah we were bombarded with (we bombard you with).
It is almost always a few simple events, fads and trends that move prices.
On that basis, the best way to spend your holiday thinking time is not reading reams of research, but sitting by a pool with a gin and tonic and thinking up a few Post-it notes that no one else has thought of, because that’s where your money will be made or lost next year, having an opinion rather than following the crowds.
So what about the year ahead?
……
I’ve gone through how we’re thinking about the year ahead in today’s members article — the themes already in play, the potential X-factors, and what really matters if you want to stay on the right side of the market. It’s less about prediction and more about positioning for what might surprise.
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