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Everyone should have known the market was going to have a big dip for one reason or another in 2025 and positioned themselves appropriately.

But we had a similar big dip in 2018 (the year saw the market down 20%) for many of the same reasons we're seeing today, followed by the best stock market increase of all time in 2019 (up nearly 30%). I don't think that's going to happen here, but it's just a reminder not to get too concerned about day to day volatility.

Honestly, for the past couple years, almost all positive movement in the stock market has been in 7 stocks -- that's not healthy, and even if the reason for the correction isn't great, it's still just a fairly normal correction in a market that's massively overvalued. People are laughing at Tesla stock, but it's back where it was in April of 2024 after it nearly doubled for no good reason.

Many analysts were predicting a big downward move regardless of who was in the Whitehouse in 2025, and so the smart money was already getting out of risk on assets. Berkshire Hathaway for example spent much of last year on an unprecedented selling spree, getting out of a lot of positions to be in cash. The key for people who care about what the market did should have been capital preservation for 2025 -- but some people couldn't resist just staying at the trough. Bulls make money, bears make money, pigs get slaughtered.

I made a big move into risk-off assets around the end of 2023, and honestly I've been consistently going up regardless. Pretty easy when the fed pays 5% to park your money in a money market fund. Better yet, it's highly liquid where it is, so if the market dumps 20% and we enter a recession, I can quickly rotate into risk-on.

I also went big into infrastructure because it's a strong asymmetric trade -- power companies win if AI keeps booming because AI uses tons of power, but power companies also win if we go into recession (which is still a high likelihood for 2025) because unlike most businesses people need to keep paying their power bills (at least for a while) even when times are tough.

I tend to agree. There's still way too much air in a lot of stocks.

I think it's still up like double compared to 2019, and nobody with half a brain would say we're in better economic shape today than pre-pandemic.

One of the biggest losers yesterday was a hardware store chain whose stock lost 50% of its value -- and was still at a PE of 40!