The image above is a painting, depicting the “Tulip Mania” in the Netherlands. It was a period during the Dutch Golden Age when contract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels, and then dramatically collapsed in February 1637.
We still have COVID, businesses are still struggling, nations still printing a lot of money, inflation is looming, SME’s, which is the bulk of the economy, can’t get loans… and the stock market is rising.
I am not complaining because I am one of the beneficiary of this madness. TSLA, Bitcoin at all time highs, I don’t have those. Rumor of backdoor listings, shell companies in the Philippines trading at insane valuations. A publicly listed broker crashing its trading platform everyday and its stock is still up.
I want to stay on the sidelines and just hold cash, but I am worried about inflation. So I have no choice but to look for investments where I can put my cash.
Investing in Real Estate
I already looked into real estate and property values are rising too. The property that I bought last March for 2.7M is now selling for 3.9M, 44% increase in just a couple of months. My agent said that if the trend continues where city people are moving back to the province, my property will sell at 4.7M. Meanwhile, some mid market condo in the city of around 24 sqm is selling for 4M. Enough to buy a house and lot. The condo market in the city still not crashing heavily aside from the pogo locations. This is due to promos and more affordable modes of payment. But the contract price of these condos are still rising.
In 2008, the real estate market crashed a few months before the stock market. The real estate market became the canary in the mine.
Cash has nowhere to go but the stock market. Perhaps the next best move is to get into private equity or start a business? Maybe… I’m looking at that too.. But I think I will stay in cash for now. Or get a new skills, get more education and knowledge at other things. Learning is investing too. Investing in self.
The recent trend in the US, money printing and all time high valuations of stocks have us thinking, “when will this end?” or “how badly will it end?” the market is not normal. We are in an uncharted territory. Only the antifragile will survive the next fall.
I don’t want to be the pessimist but I don’t see any logic in the current market situation just yet.
Will there be another crash? We just recently have one in 2020 but it seems like a dream and too soon for another one. But the reality is, even if the markets have recovered from its 2020 drop, the situation is still not better. Only the hope of it getting better that is propping up the stocks and the money printing of course.
What to do now?
I don’t know. Like I said, we are in an uncharted territory. And it pays to be prepared. I’m not going to go crazy in the stock market right now, even if more and more people are now getting excited by it. I am actually getting pretty scared that bad things are about to happen sooner than later.
Would I still be investing?
Yes. Of course. I would still be invested. Just not as aggressively as I did back in 2020 when the market hit bottom.
Love this. Good to see that someone else also thinks that it’s a bit too early for the stock market to rally like it’s doing now. I actually started to think I was crazy for noticing this. Especially the baseless valuations on highly traded stocks like DITO.
Good to know there are people investing in the same manner that Buffett and Munger do. Just stumbled on your website recently so I might read on your articles from time to time. Keep it up!
Glad to see other investors thinking the same way.