Philosophical note on our society; Pragmatic prediction for the stock market

2 days ago, I was asked to write a post explaining how to invest in events such as inflation, recession, world wars and such. That got me thinking that lately everything that can go wrong is going wrong. Is there even a way to predict everything and plan for it?

Later that day, Trump was targeted in an assassination attempt during a rally in Butler, Pennsylvania. A bullet miraculously missed him by hardly a few centimeters and grazed his ear. Unfortunately, the shooter managed to kill at least one person in the rally and seriously injured 2 others, before being shot down himself. Trump quickly got back to his feet and amidst his security trying to shield him and whisk him away to security, he managed to show great defiance and courage by pumping his fist and shouting "Fight! Fight! Fight!" The image with blood strewn across his face will live for a very long time.

Regardless of your political bend, this is an event that should be strongly condemned. The mainstream media and the algorithms behind social media benefit from polarizing our opinions and give rise to hate in society. This becomes a vicious cycle. I strongly believe if the liberal media didn't focus all of their energy on Trump in 2019, he would never have become the president in the first place, and we would never have to bear with Biden either.

I have been a lot more invested in the Indian elections obviously, and over the last decade I have been through frustration and a sense of hopelessness about the irreparable damage being caused to the social fabric by the right-wing Modi government. And yet the current elections have demonstrated the strength of democracy and have delivered a clear message to the government that the people have had enough with the politics of hate and that that's not a sustainable political approach.

I am not saying people should stop agitating or expressing their points of view, but that they should avoid being polarized, avoid resorting to or condoning violence and have more trust in democracy.

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All that said, as an investor I have to cope with how the world really works and view everything dispassionately. The fact is that this assassination attempt and Trump's response to it will have a huge effect on the polls. At this point, even replacing Biden may have minimal impact on the polls.

The market will swiftly price in the high probability of Trump Presidency. This means swift rate cuts, which would lead to a quicker recovery of the stock market as I have theorized in my previous post. Trump has also promised corporate tax cuts, which will improve profit margins for companies. Trump has also been a lot more pro-EV than before, while continuing to be anti-China so $TSLA would be a large beneficiary. Trump has also promised to make it easier for students in the US to get Green Cards and that is also a positive sign for the industries. It can create a lot of talent, even leading to lowering of salaries in tech jobs and costs for the companies.

After a brief period of euphoria, I think the market still needs to go through a correction if interest rates drop in September, which could be further fueled by dwindling demand reflected by missed earnings expectations in the coming weeks. This would be a time when I would be aggressively deploying my cash reserve to buy the dip.

If you have been sitting on the fence, I suggest now is a great time to start copying. Start copying with a small amount and add funds periodically to dollar cost average and reduce the impact of bad timing. The best time to add funds would be when the market is going down.

Thank you for reading. I am eager to hear your opinions.

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I am going to still try and put to paper a mental model to think about black swan events and their impacts on the market. For now, one thought I want to leave you with is from Morgan Housel's book "Psychology of Money".

"Risk is what you don't see!"