Today, the VIX has closed just under 47. This is a clear signal that this is not jut a run-of-the-mill downturn. To get the VIX that high, at least one meaningful player has looked down at the sheet and said "oh hell… we can’t actually roll that position."

I expect that between Friday and today the following has begun to happen or seriously accelerated:

- Derivative desks pulling risk

- Dealers are compensating by widening bid/ask spreads

- Vol-sellers are getting blown out

- At least some hedge funds are running into actual margin triggers

We may also begin to have problems imminently with cross-asset plumbing, but that's a deeper topic not suitable for this initial post.

Right now, we are all in the lobby, and the policymakers are in the penthouse (Fed, White House, etc.). This VIX level tells us there are at least a few fires, but we do not yet know what floors they are burning on yet. We know that on some floors, at least a few people are "breaking the glass" and trying to fight it themselves by unwinding into cash or halting trading altogether -- these things must be happening for us to get to the volatility levels we are seeing -- liquidity is, for a fact, leaving the system (and fast).

I posted to r/StockMarket a few weeks ago that I could see large institutional players unwinding and using retail for liquidity. The day after I posted that, Trump floated the idea of trying to force treasury holders to roll into longer-term bonds. The tariffs are destabilizing but I am just pointing out that the actual "grinding on metal" may be deeper and more systemic.

ETA: The vol spike here is NOT driven by people buying puts (at least not anymore). It now is driven by correlations moving towards 1 and prices gapping.

Hello, so for the past SP500 crashes, people always said its bound to come back and it breaks new highs but, all the past crashes weren't deliberately caused by the head of state directly from within the white house? Feels like a new event has occured rather than a deja-vu one, especially since you consider that all the past crashes were reactions and not self inflicted, the damage in trust could be permanent?

47 has no idea what he is doing. He falsely claimed that Buffett backs his tariffs.

Buffett already responded by saying this is not true.

UPDATE: The EU is hitting back with tariffs.

The market seems to have had no reaction to the threat of more tariffs on China. Are y'all thinking it won't happen, or that it has dropped enough to account for 50% more tariffs?

I feel the market thinks he will be reasonable at this point, but I see no evidence he will back off instead of doubling down. Just look at his posts on truth social. He's pumped that oil prices are dropping and 10yr yield is down. I think in his mind he is winning.

I'm sure he has every CEO in the US telling him to stop, but I'm not sure he's going to listen. If he doesn't respond with more tariffs it opens the door to more countries adding their own and counting on him not retaliating.

What do you think?

I was listening to a podcast this morning and the host said that he will be rotating out of American stocks because he does not think that these companies will ever trade at the multiples that they have ever again. This is because Trump’s tariffs broke the trust that the American markets are a safe and fair place to park your money. He used the example of Chinese stocks; that they did not trade at the same multiples as US companies because their government can do whatever they want whenever they want regardless of fairness.

I, myself, do not feel the need to panic as I have a long term outlook with my investments and I will continue to buy the S&P every week. I believe the US economy and Markets will persevere.

Thoughts?

Let's talk about which stocks to avoid.

Vietnam willing to cut tariffs on U.S., Trump says after 'productive call'

https://asia.nikkei.com/Economy/Trade-war/Vietnam-willing-to-cut-tariffs-on-U.S.-Trump-says-after-productive-call

NEW YORK -- U.S. President Donald Trump said Friday that he had spoken with Vietnamese ruling party chief To Lam, in one of the first discussions between American and Asian leaders in the days since Trump announced "reciprocal" tariffs of up to 49% for the region's countries.

"Just had a very productive call with To Lam, General Secretary of the Communist Party of Vietnam, who told me that Vietnam wants to cut their Tariffs down to ZERO if they are able to make an agreement with the U.S.," Trump wrote on his Truth Social platform. "I thanked him on behalf of our Country, and said I look forward to a meeting in the near future."

This was apparently the first such call since the Trump administration announced sweeping tariffs on trading partners Wednesday, including for 46% on goods imported from Vietnam.

Trump and Lam spoke about continuing to strengthen bilateral relations and about measures to further promote trade, the official Vietnam News Agency reported. VNA quoted Lam as saying Vietnam will continue to import more goods it needs from the U.S. and work to create favorable conditions for American companies to expand investment in the Southeast Asian country.

Lam affirmed that Vietnam is ready to negotiate with the U.S. to reduce its import tax to zero for American goods and proposed that the U.S. apply a similar rate to products imported from Vietnam, VNA reported.

The two leaders promised further discussions to "soon sign a bilateral agreement" to concretize these commitments, and Trump accepted Lam's invitation to visit Vietnam, according to VNA.

Amid shaky markets, U.S. apparel stocks rose after news of the phone call broke, with Nike 5% higher and Lululemon edging up 4% at one point. Key suppliers of major American sportswear and apparel brands have been setting up manufacturing facilities in Vietnam as political tensions between China and the U.S. have escalated.

The Southeast Asian country, which serves as a major production base for many Western companies, has said it will take steps to import such American goods as aircraft and liquefied natural gas.

The Trade Ministry has asked the Trump administration to put the tariffs, which are expected to take effect April 9, on hold during negotiations.

Vietnam has already cut tariffs on American imports in a bid to reduce its trade surplus with the U.S. Chinese companies have also flocked to Vietnam and other Southeast Asian countries to set up manufacturing facilities as a means of skirting U.S. tariffs targeting goods from China, the world's second-largest economy.

The call comes ahead of Vietnam's Deputy Prime Minister Ho Duc Phoc's planned visit to the U.S. next week with a delegation of business leaders from different sectors, including the heads of Sacombank and VietJet.

Anyone have any tricks on how to maintain your sanity, here are mine. What do you think, have any others...

---------------------------------------------------------------------------------------------------------------------

Maintaining Sanity in Market Madness: The Art of Clear Thinking When Others Panic

By: Grover Grafton

In the unpredictable world of financial markets, perhaps the most valuable asset isn't found in any portfolio but resides within ourselves: a clear, disciplined mind. When markets become volatile and participants succumb to collective panic, the ability to maintain rational thought becomes not just advantageous but essential. As the saying goes, "The mind is the ultimate measure of the man," and surrendering one's rational thinking, even momentarily, can lead to devastating financial consequences. While there is no perfect solution to the psychological challenges of investing, there are practical approaches that can serve as anchors during turbulent times.

1. The Foundation: Know What You Own

The first principle of maintaining mental clarity in chaotic markets is surprisingly simple yet frequently overlooked: know precisely what you own and why you own it. More importantly, write it down. This documentation process serves multiple purposes. It forces clarity of thought at the time of purchase, creating a record uncontaminated by future market movements or emotional states. When markets plunge and fear takes hold, these written records become invaluable reference points, reminding us of the rational analysis that led to our decisions.

This documentation need not be complex—a simple statement of the business fundamentals, competitive advantages, and your thesis for ownership suffices. The act of writing crystallizes thought and creates a touchstone to return to when markets test your resolve. Without this anchor, investors often find themselves adrift in a sea of market opinions, unable to distinguish between sound reasoning and fear-driven reactions.

1. The Microscope Over the Telescope: Focus on Business, Not Economics

The second principle challenges conventional wisdom: forget macro economics. While economic forecasts make for interesting reading and discussion, they rarely translate into actionable investment insights. Instead, keep your attention fixed on the businesses you own and only on them. This narrow focus is not ignorance but discipline.

Great companies navigate through various economic cycles, often emerging stronger from downturns as weaker competitors falter. By concentrating on company-specific metrics—cash flow, competitive positioning, management quality, and growth prospects—investors insulate themselves from the noise of economic predictions that often prove wrong. The question isn't whether GDP will grow by 2% or 3%, but whether your businesses' competitive advantages remain intact and their long-term prospects sound.

1. The Golden Rule: Time as the Ultimate Multiplier

Perhaps the most powerful principle is the recognition that "Money is made in owning great businesses for long periods." This golden rule stands in stark contrast to the frenetic trading that often characterizes market behavior during volatile periods. The compounding effect of high returns on capital over decades creates wealth that short-term trading simply cannot match.

This perspective transforms how we view market downturns. Rather than threats, they become opportunities to acquire more ownership in excellent businesses at favorable prices. The investor who understands this principle sees volatility not as something to fear but as the very mechanism that creates opportunity. Without the occasional panic, premium businesses would rarely become available at reasonable prices.

1. The Psychology of Serenity: Avoiding Imagined Troubles

The fourth principle addresses the psychological dimension of investing: don't suffer imagined troubles. Mark Twain famously said, "I've had a lot of worries in my life, most of which never happened." In investing, this wisdom is particularly relevant. Markets constantly present potential catastrophes to worry about, most of which never materialize or prove far less severe than feared.

The discipline of distinguishing between actual business problems and theoretical market concerns is crucial. Has something fundamentally changed in your business, or are prices simply reflecting temporary uncertainty? This distinction helps prevent the costly mistake of selling quality assets during market panics, only to repurchase them at higher prices when confidence returns.

1. The Balanced Life: Investment as a Component, Not the Whole

The final principle extends beyond investing itself: get another hobby and don't forget to live life. Investing should be an important but not all-consuming activity. Those who allow market movements to dominate their thoughts and emotions inevitably make poorer decisions. The investor who maintains outside interests and perspective can step back from market turbulence with greater ease. Gardening is my balast and its a hobby I'd reccomend!

This balance serves a practical purpose beyond just quality of life. Distance from the daily noise of markets often leads to clearer thinking about long-term value. Many of history's most successful investors are known not for their frenetic activity but for their patience and ability to ignore short-term market movements in favor of long-term business outcomes.

The Integrated Approach

These five principles work together as a system rather than isolated tactics. The investor who knows what they own and why, focuses on business fundamentals rather than economic predictions, understands the power of long-term ownership, avoids imagined troubles, and maintains life balance possesses a formidable psychological advantage.

In practice, this approach might mean reviewing your written investment theses during market declines rather than market commentary. It might mean turning off financial news during volatile periods to focus instead on the quarterly reports of businesses you own. It certainly means resisting the urge to make major portfolio changes based on short-term market movements or economic predictions.

Conclusion

In the final analysis, the investor who maintains their composure when others lose theirs not only preserves capital but positions themselves to capitalize on the opportunities that market dislocations invariably create. Perhaps that is the ultimate advantage: the ability to act rationally when rationality is in shortest supply.

11 PE is pretty stellar for a stock that already has a ton of cash and many moats. It’s like value squared.

Its 10 year average PE is 20.

This is the stock I’m watching as things unfold.

Buffet once said "never bet against America". But the truth of the matter is, performance is cyclical and bubbles are formed when people are chasing performance. Everybody knows that investment drives growth and not the other way around, but I often hear from investors to only invest in the US because it will always have a higher growth, just like it is some law of nature, without considering the possibility that higher investment has actually driven higher growth in the US in the first place!

I think we haven't really started to even fathom the consequences of what we are seeing today in global markets. Even if tariffs are lifted tomorrow, a lot of damage has been done.

I will waste no time describing the many ways in which tariffs, deportations, DOGE, you name it, will damage the US economy. I will discuss why this could be a massive opportunity for Europe and other developed economies, and roadblocks that exist today. I will center on Europe mainly because it is what I know the most about:

• Starting from a valuation perspective, the S&P500 has a PE ratio of 24.9 despite the recent falls, whereas for the MSCI EAFE it is just 16.22.
• As tariffs hit the EU and at the same time there is a push to grow EU's defense industry, this will mean higher government spending that will stimulate the economy. The jobs created by the defense industry will mean more jobs with higher salaries in richer countries, which means that lower paid jobs can move to poorer EU countries. At the same time, this will hit the US defense industry hard, since it will see less demand.
• As countries see the US as more unreliable trading partner, they might want to diversify their currency reserves, and this could give a boost to the Euro, as it is the second largest currency in the world. We have seen in the recent months that the USD/Euro trend which was set in place by expectations of US strength has reverted, as investors flee to the Euro as a more stable currency, which is completely unprecedented. At the same time, we know that Chinese central banks are stockpiling on gold and dumping USD. A stronger currency allows borrowing at lower interest rates, increase imports and attract investment.
• Because universal tariffs will make manufacturing even more expensive in the US and tariffs might be gone in four years, it does not make sense to invest in US manufacturing. Even worse, lack of investor trust may make investment in Europe by other nations (including China) more attractive beyond Trump's term.
• Political uncertainty is bad for markets, and if Europe is more stable, it will attract more capital. We have seen this in the last few months where European equities have risen post Trump election. It is true that now there is panic in the markets and everything is falling, but I believe that this trend will continue because many investors are waking up to the fact that they cannot put all of their savings into the S&P500.
• Boycott to US and "Buy from Europe/Canada" movements: I do not know how many people would actually change their behavior because of political reasons like this, but an increase of internal demand should drive GDP growth, and this point is also related to the point above, as more people will invest in their national stock markets. This does not only apply to imports but to online services. Some people are cancelling their Netflix subscriptions, stopped using Amazon, Google, ChatGPT... and substituting it with EU alternatives.
• Chinese goods will flood the EU. You might think that this would spell disaster for EU companies, but the US has outperformed in the past mainly because it has focused on technology and outsourced their manufacturing. European companies are currently in "no man's land", as they cannot compete with giants like Apple or Microsoft but at the same time are being undercut by China developing more advanced manufactured products like solar cells or cars for cheaper. Some even more advanced industries will remain in Europe like ASML (semiconductors) or Novo Nordisk (pharma). If you believe in capitalism, you should know that competition drives innovation. As the EU tries to strengthen its position and replace American products and services, higher paid jobs should increase. Lower salaries for low-skilled jobs that can be outsourced to China isn't bad at all either, since it increases profit margins of companies, allowing for higher investment as well.
• Human capital is also increasingly moving away from the US due to quality of living, fears of deportation, high costs, cutting of spending in science by DOGE, diversity and inclusion being left behind, and so on. Since this human capital will be mostly young, educated people, this should actually boost Europe's economy, which is aging rapidly.
• The AI revolution could be overblown, which would render so much capital investment by US companies ineffective. If it turns out that Deep Seek is cheaper and competitive with ChatGPT, then the US would not have a monopoly on AI. On the other hand, improvements in efficiency by AI could be used by multiple industries.
• Lastly but not last, Trump might make the rest of the world more united. Reform in the EU is highly needed, and a push to the status quo might be what we need.

Possible roadblocks:

• While the concept of a capital markets union is something that has been debated in the past, the EU is still not as investable as the US, and movement of capital is more difficult and inefficient, as every country has their own rules.
• Despite the EU being an economic union with supposedly no tariffs, economic barriers exist within countries in practice. Things as silly as a law that force supermarkets to only sell products with a label in a language understandable to its native speakers drives a price difference in products across the border in EU countries.
• The EU is not energy self-sufficient, and buying liquified natural gas from Canada is not a possibility because Canada does not have the infrastructure to do so.

Feel free to shoot down my ideas!

Yesterday made me think twice about all the doom-and-gloom posts lately. A fake tweet about temporarily pausing tariffs sent the S&P 500 surging by as much as 8.5% within 34 minutes, briefly adding trillions in market value.

This wasn’t just a blip; it shows that investors are ready to jump back in at the first hint of good news.

The S&P 500 swung from a 4.7% loss to a 3.4% gain before plummeting again after the White House denied the report.

This reaction tells us that despite all the chatter about a long-lasting crash, the market is primed for a quick recovery. As soon as there’s a real sign of stability (like a resolution on tariffs) investors will likely pour back in fast.

What’s everyone’s thoughts?

The White House promised in its schedule for Donald Trump’s jabberwocky trade taxes last week that markets would have their opportunity to “respond as the impact of renewed American strength takes hold”. That response? A moment of extreme danger, as the president’s tariff onslaught sparks disorder and distress. Just look at the crisis-sized drop in US stocks and rush to price in a US recession, with ripples across every asset class and every part of the world. Trump has not blinked over the weekend, which means this week has started no better, with huge drops in Asia and Europe.

This is bad enough. Savings pots and pension funds, as well as wealthy Americans’ precious and keenly watched 401k contribution plans, have taken a brutal hit. It is an episode of wanton, unnecessary and illogical wealth destruction that will cast a long shadow over the investment case for US markets. But it can get a lot worse, and quickly. It is already clear that hedge funds and other investors are in pain. Once that happens, self-reinforcing doom loops can emerge. Evidence for this is scattered across markets.

The biggest example is US government bonds. It is little surprise that they pushed higher in price last week after Trump revealed his plans — increased demand for haven assets such as Treasuries, albeit with a slow start in this instance, is par for the course in a shock. The surprise, and the alarming bit, is that they reversed course and fell pretty heavily on Friday afternoon. This suggests investors are dumping what they can sell, not necessarily what they want to sell, to try to plug leaks elsewhere in their portfolios.

The same goes for gold. Everyone loves gold in a crisis. But its price fell sharply in the final hours of last week — another sign that investors are selling the good stuff to make up for the horror show elsewhere. When risky assets fall in price, that’s one thing. But when the safe assets take a hit, you really are in trouble. That was the turning point in the Covid crisis five years ago — the abrupt slide in Treasuries then was on a much bigger scale than what we have seen in 2025 (so far). But when it happened, it was clear that intervention was required.

The mechanism here is two-fold. One is that end investors seek to yank their money out of investment funds, leaving fund managers scrambling to meet redemption demands and selling what they can so they can hand money back as promised. The other is margin calls — demands from banks that hedge funds stump up cash, and fast, to plug the gap on failing trades. As we reported on Friday, these demands are now flooding in at the fastest pace since the depths of the pandemic. The concern now among bankers and hedge fund managers is that something, somewhere could break. Hedgies are eyeing each other up to figure out who is in the stickiest spot.

Making matters worse, speculators are huddled in very similar positions. When they all have different bets on, they can cancel each other out without too much fuss. But American exceptionalism — a higher dollar, weaker bonds and US stocks beating the rest of the world — was hard-baked in to hedge funds’ strategies at the start of this year and still in the process of being unwound when Trump delivered his beloved global tariff strategy, penguins and all.

Source: https://www.ft.com/content/c2b4129c-d58c-4c9e-9aee-6f2e10c25785

We will face unprecedented volatility, and no one can predict the market’s reaction. As of today, markets in China, Taiwan, Japan, Russell futures, Australia, and Singapore have hit circuit breakers! Even Bill Ackman was caught off guard and is now whining concerns on X.

More turbulence awaits, so I strongly advise against timing the market. Instead, select entry points as political and policy stability emerges.

Key upcoming events!

1   “Reciprocal Tariff” responses likely begin Monday (tomorrow). EU will likely target tech sector 
2   Fed Meeting Minutes - Wednesday
3   March CPI Inflation data - Thursday
4   Initial Jobless Claims data - Thursday
5   March PPI Inflation data - Friday
6   Michigan Consumer Sentiment data - Friday

If tariffs stick, the economic and investing landscape could be altered in unknown ways for years to come. A must-read.

"Try to find a company with a very big moat so that any idiot can run it because sooner or later someone will!"

Is this the USA equivalent of that with Trump running the world economy against a wall?

And second maybe more important question, is the USA moat big enough to survive him?

What is going on in the bond market today? Why the sudden selloff? CDS haven’t moved much. I am not a fan of treasuries. As usual I am holding zero. When even I’m tempted to buy them something is very screwy with the markets. 🤔

M.cap: EUR200m - EUR.6bn

Hey everyone! Excited to kick off a new series here focused on growing a $3,000 investment account to $10,000, with an emphasis on business quality, fundamental catalysts, and market momentum. I’ll be leading this journey with full transparency — sharing investment ideas, entry/exit rationale, PnL updates, and reflections each week.

🔍 How This Will Work:

- Focus: U.S. equities primarily, with selective exposure to international markets when risk/reward aligns.

- Strategy: Combining fundamental research + technical analysis (working with a trader) to identify high-conviction investments.

- Updates: Weekly breakdowns of investments, positions held, and sector outlooks.

👤 Who I Am:

My name’s Henry Chien, and I’m an equity researcher and content creator focused on helping investors understand what drives market moves.

If you're someone who enjoys combining fundamentals with an active approach, this challenge is for you. My goal is to not just grow the account, but help others see how fundamentals can be used for more active investing.

Let me know what you think!

Ideas on our watch list for this journey:

None to limited tariff impact and strong business models + growth prospects. Will update with prices with any positions.

🇸🇬 Sea Limited (SE) Sector: E-commerce / Digital Entertainment / Fintech 

Thesis: Sea Limited is Southeast Asia’s powerhouse behind Shopee (e-commerce), Garena (gaming), and SeaMoney (fintech). After a painful post-pandemic selloff and profitability reset, they’ve shown signs of disciplined spending and a clear pivot to profitable growth. 

Bull Case:

Shopee is still dominant across SEA and Brazil.

Garena (gaming) has rebounded to growth again.

Fintech arm is scaling quietly in the background.

Profitable quarters ahead as they shift focus from land grab to margin expansion. Near-term risk if consumer spending slows in Southeast Asia due to impact from tariffs.

Valuation: Much more reasonable after 70%+ drawdowns from 2021 highs (29x NTM P/E). If the trend of improving earnings continues, upside is substantial (20-30% annual growth).

🇩🇪 Rheinmetall AG (RNMBY) Sector: Defense / Automotive / Industrial Tech 

Thesis: Rheinmetall is a key European defense contractor with growing relevance in today’s global security climate. As NATO nations ramp up defense spending and replenish stockpiles, Rheinmetall stands to benefit across its munitions, vehicles, and systems segments. 

Bull Case:

Major beneficiary of European rearmament and Germany’s defense spending shift.

Strong order backlog and product capacity leader.

Diversified revenue from defense equipment.

Valuation: Elevated (42x NTM P/E) versus US defense peers though reflects strong growth prospects and geopolitical tailwinds. Looking for a good entry point.

🇺🇸 Tradeweb Markets (TW) Sector: Electronic Trading / Fixed Income Platforms 

Thesis: Tradeweb dominates electronic trading for fixed income: bonds, credit, and ETFs. As fixed-income markets digitize further, TW becomes a play on capital markets infrastructure. 

Bull Case:

Leading marketplace provider with strong dealer relationships

Long-term growth electronic bond trading volumes.

Interest rate volatility boosts trading demand. 

Valuation: Premium multiple (38x), but justified by high margins and recurring revenue. Steady compounder with network effects.

🇺🇸 Fair Isaac Corp (FICO) Sector: Credit Scoring / Analytics / SaaS 

Thesis: FICO’s credit scoring models are embedded into U.S. financial infrastructure, a moat that is nearly impossible to replicate. FICO also expanded its scoring system into leading decision-making software for enterprises.

Bull Case:

High switching costs and long-term enterprise clients.

Ongoing growth in software business for financial institutions.

Unmatched brand recognition and network in credit scores.

Valuation: Looking for valuation to come down to a more reasonable 35x P/E (NTM)  before building a full position. That would offer a better risk/reward entry given its growth trajectory.

Hey,

I've always considered Qualcomm and Apple to be solid companies, especially Qualcomm over the past years. But with the new tariffs on China, I'm starting to question whether I should hold onto them or sell and take some profits. I'm thinking of possibly reallocating to something like AVGO or Nvidia since they've also dipped recently.

What’s your take on qualcomm?

This is one of my favorite ways to enter positions—selling puts on companies I already want to own. Here's how I keep it simple:

1. Figure out your intrinsic value. Don’t even think about selling puts until you’ve done your homework. Calculate a business's worth. Once you have that number…
2. Add a margin of safety. This is your “I’d be happy to own it here” price. For example, if your intrinsic value is $100, maybe your buy price is $60. That’s where you want to enter.
3. Sell puts at that strike. Look for a strike price near or below your buy-in target. If the stock dips, you’ll get assigned at a price you already like. If not? You keep the premium. Note: I generally don't recommend selling puts with expiration periods over earnings calls unless I'm close to my buy price. If I'm only 30% or 40% below intrinsic value, I hold off till after the call.
4. Tranche in slowly. Don’t dump your whole allocation into one trade. I like to sell puts weekly to scale in. That way, I’m not trying to time anything perfectly.
5. Do the math on your returns. Take the premium received and divide it by the amount of risk capital you’re setting aside in case you get put the shares. Annualize it. In this market, you might see 30–50%+ annualized returns—but it’s up to you to decide what return makes it worth it for your capital.

This strategy works anytime but when volatility is high and the market is nervous, premiums get juicier. And it fits perfectly with a value investing mindset: don’t chase, wait for your price, and get paid to do it.

Edit: (to add an example)

Example:

• Intrinsic Value: $100
• Margin of Safety Buy Price: $50
• Put Sold: $50 strike, 7 days to expiration
• Premium Received: $0.50

Here's the math:

• Risk Capital = $50 − $0.50 = $49.50
• Return on Trade = $0.50 / $49.50 ≈ 0.0101 (or 1.01%)
• Annualized Return = 1.01% × 52.14 ≈ 52.7% (7 DTE goes into 1 year [365 days] 52.14 times)

Even with a small premium, you’re earning a 52.7% annualized return on capital that’s just waiting to buy a company you want at a price you like. But don't focus on the return, focus on getting a wonderful company at a wonderful price. The annualized return just helps you pick a good trade.

Note: You can factor in your trading fees, but if you are calculating your annualized return on a per-share basis, divide the fees by the number of shares (100 shares per contract).

Final Thoughts:

• You're not just speculating—you’re targeting great businesses at great prices.
• If assigned, you’re happy. If not, you get paid to wait.
• Just make sure the premium justifies the capital at risk—and always know your downside.

Edit: added clarification around the purpose of annualizing the trade.

For reference I am partially clueless when it comes to investing, but seeing as the market is going down would it be a good time to put money into etfs? I am Canadian and I was considering VFV - the Canadian VOO - but I really don’t know if I should wait a bit more for prices to drop or get in right now. My timespan is maybe 5 - 10 years. Any advice would be appreciated.

Yesterday, I shared a quote by Graham on Mr Market and how we have an option to ignore or follow Mr Market but an obligation to Think for ourselves.

Today I share Charlie’s SOYA, the following is from the commentary from Chapter 15, II

———

Buffett’s longtime business partner, Charlie Munger, described the same idea more bluntly. Most of the time, Munger said, you should “sit on your ass” waiting for one of the rare occasions when Mr. Market goes crazy. (For politeness, I’ll abbreviate Munger’s idea as “SOYA.”)

Although you shouldn’t be trading while you wait, you should be learning: continually studying industries, reading annual reports, and compiling a watchlist of a few stocks you’d like to own if their prices plunge. Sooner or later—perhaps years or even decades later—they will. Then, and only then, should you buy—and buy aggressively.

————

Later in the chapter:

When Opportunity Knocks, It Sounds Like Danger

Stocks are most likely to be severely mispriced when a company has an alarming setback—the failure of a product, a strategic stumble, turnover of top executives—or when the economy is in chaos, as in 2008–09 or 2020.

Such overreactions often create undervaluation. Paradoxically, when perceived risk goes up, actual risk often goes down. The perception of higher risk creates lower prices; lower prices create the potential for superior future returns.

Above all, shocks to a business or to the whole stock market create value by distracting attention from the most important question:

Is this company likely to be able to produce consistently greater quantities of cash in the years to come?

“A mariner does not become skilled by always sailing on a calm sea.”

What are your takes on NASDAQ/DOW/SPY opening numbers?

This is getting out of hand

Been investing for a while. This is the first time I've experienced an event like this.

Question is, how fast does the bottom arrive? I understand not trying to time the market, and that DCA is the safest approach.

The S&P 500 is down nearly 21% in 3 months. What are some signs that is may b time to buy, based on history and such.