Beachman's mid-year plan: Markets in Golden Age of the Grift
Markets: Beachman's portfolio tactics based on his read of the markets
I am back at my desk after more than a month of traveling…across 3 continents and 7 countries…countless planes, trains, boats, buses and automobiles.
We literally scaled mountains (by foot) reaching close to 18,000 feet altitude…that was f#$%ing hard, I tell you. but the view from the top was magnificent.
We missed flight connections twice…both of them in Dublin. Aer Lingus (“Air Dingus” as per my kids) is, now imo, the worst airline for international travel.
On the bright side, our luggage was not lost once. No one fell sick. Everyone’s passports, wallets, phones, charging cables and air pods made it home safely.
We knew this was going to be a busy Summer. Both kids graduated…one from high school and the other from college. My wife and I hiked the Inca Trail and other peaks in Peru. Along with the kids, we traveled across Europe…our graduation gift for my son and daughter before they embarked on to new phases in their lives. In Aug, we head to Puerto Rico for a couple of beach weeks and a Bad Bunny concert before we send our son off to college…business school and baseball. In Sept, my daughter will get on a plane to teach in Europe for a year.
By the time Fall comes around this year, my wife and I will be empty-nesters.
One of my ways to measure a vacation is by how much reading I get done. Over the past month, I read 3.5 books…all fiction. This was indeed a very relaxing time.
Being rested and away from the daily market gyrations helped me to think more clearly about markets, investing and trading. It compelled me to think about what I got right and where I was wrong about my investing decisions and trading actions. It allowed me to map out how I want to position for the rest of the year and beyond.
Read on to understand how…
Welcome to the Beachman community, where we follow the most pertinent market signals that you need to know as an investor…AND…the context and the key takeaway for each of these developments.
Thank you for your time and for your readership. We continue to grow because you support us, you share our work with others, you contribute to and nurture our community in many ways. So please keep those likes, comments and questions coming. Every engagement feeds into the algorithm that helps others find our work.
Beachman’s Investing Brief is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
Table of contents
Portfolio update
Macro trends
Market conditions
Coming next
Portfolio update
This investing year has been very surprising in many ways…one of the biggest is how well the Beachman porfolio has performed…
…in spite of all the market gyrations, macro shocks and tweets.
…in spite of being about 47% hedged for most of Q2 along with a high cash allocation.
Currently, the Beachman portfolio is tracking close to 4x the YTD performance of the SP500 as well as that of the Nasdaq.
I would have been happy with a flat year in 2025. I still believe that ending anywhere positive by this year end will be a reasonable outcome to shoot for. However, markets have been kinder to my portfolio and I am trying to make sure that it does not get to my head in a bout of misplaced over confidence.
Now the big questions are:
What to do for the remaining six months of 2025?
How to position best for 2026+?
Macro trends
Summer is here and few are paying attention to macro reports. Right now, we have better things to do with our time…fun with family, friends, sun, sand, barbecues, shandies, fireworks and baseball.
In the meantime…
Trade wars continue…hot, cold and all the degrees in between.
GDP growth rebounded in Q2 due to a tariff induced pull forward effect.
Q2 revenue and earnings estimates are being revised much lower.
Labor market remains strong with few pockets of weakness.
Housing is still weak, but markets don’t care.
Inflation is stagnant.
Interest rates are range bound.
Commodities are weak.
Consumer sentiment is tentative, political and confusing.
No signs of a recession, while consumer spending slows down.
US $ keeps dropping.
US bonds are finding fewer buyers.
Wars continue in Europe and the Middle East.
Market conditions
The market continues to do what it has been doing for the past 3 years…going up and to the right with no real end in sight.
However, it no longer reflects the US economy.
Until Nov 2024, an investor could use fundamental analysis, technical charting, macro metrics and market data to analyze what is going on behind the scenes…to understand why stock prices are rising or falling…to decide when to buy, sell or trim.
But, over the past 8 months, most of those rules, processes and methods have not worked because…
We are now in the Golden Age of the Grift (GAG).
The bond market remains a better predictor of where the US economy is likely heading, but it is largely ignored. Like Rodney Dangerfield, it gets no respect until something actually breaks.
Today’s market participants don’t seem to care about risk. They are incessantly BTDing, while brokerages give them more rope (trading opportunities, privileges and margin).
They seem to clearly understand that the GAG is being written into laws…that GAG is throwing regulations into the trash can and that GAG is guiding the self-serving actions of the administration and corporations.
No one cares about the long term implications to the US economy.
There is a clear-minded, pure focus on personal profits and short term gains.
In 5 to 10 years, the US will be worse off due to our actions and inactions since the pandemic. Sure, this decline started earlier, however things accelerated in 2020+
While the US is slowing…circling the drain, other countries are playing the game with a longer term horizon in mind.
I have been wrong about several things this year because I continued to assume that I could successfully invest like I did in 2020, 2021, 2022 etc…even as recently as 2024.
I assumed that markets would care about earnings, valuations, forward growth estimates, margins and balance sheets. LOL…little did I realize that all these fundamentals don’t matter in the GAG.
I expected AI spending to slow down, but the GAG found ways to accelerate it.
I thought the bond market was more powerful to stop this runaway train, but little did I realize that the administration has many more levers behind the curtain.
TACO does not even begin to capture these times.
Perhaps even using the word GRIFT is giving it too much respect.
Nothing makes sense and it all makes sense.
Everything everywhere all at once.
I read this on WSJ recently…
Every disaster seems to have its famous last words. For the global financial crisis, they were from Citigroup CEO Chuck Prince, 18 years ago today, talking about the buyout boom that was about to implode.
“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing.”
This is no longer our typical market.
It is time to throw out portions of my playbook for at least the next 3 years.
It is time to get up and dance…if one is so inclined.
For short term trade ideas, check out Beachman’s Salty Trades.
On the daily, you can find Beachman in four places…
Beachman’s Substack chat line here
Beachman’s Substack feed here
Beachman’s X feed here
Beachman’s Threads feed here
Please check out the must-reads listed on the About page and the Roadmap page.
Coming next…
Beachman’s plan for the GAG economy.
How Beachman will invest and trade in H2 2025 and beyond.
Cheers!
Welcome Back! A well earned vacation and time with Family is the most important of all. It's what life is all about. I too continue to shake my head and wonder if I've been conservative or scaring myself with all the reading/research that I'm doing. Look forward to your thinking on this matter.