Regarding BRK's downgrade right before their quarterly report, as lions noted before, analysts recommend the opposite of what they do.  It sounded like price manipulation.

Sure enough, BRK reported a big jump in profits after the downgrade.

Of course, if it was legit, it would symbolize a peak of dysfunction by downgrading everything which isn't Nvidia.  It still didn't go anywhere near past lows from the downgrade. Lions believe it represents the fair market value.

Being overweight BRK, the lion portfolio has been a dumpster fire for the whole year of course. The competing duality of VOO & BRK actually kept it from going anywhere, but lions view the S&P as extremely overpriced. 

Suspect the S&P is going to take a Nikkei 225 nosedive & similarly not recover for 35 years.  There is no passive investing.  The benchmark nikkei boom was 300% in 5 years so the S&P probably has a way to go.  The S&P stands at 200% in 5 years.  Its 300% point was 10 years ago.

We're dealing with a moving 5 year window, so the low end constantly grows.

https://en.wikipedia.org/wiki/Japanese_asset_price_bubble

Important notes: a 5 year span, excessive monetary easing policy, parallel stonk & real estate bubble, rate cut from 5% to 2.5% in the beginning.   It's possible the current rate cutting cycle that started at 5% & now stands at 3.5% is the beginning of the bubble rather than the end.

Assuming 2015 was the last fair price & annual growth is nominally 10%, the S&P should be 5700 today, a roughly 20% drop.  We had a 20% dip in March.  Lions aren't good enough at market timing to trade around that, but usually buy in during those events.  Lions still aren't exposed enough & have enough gains for a VOO dip to not cause a disaster.  With a large portfolio, 6 figure dips are going to be a necessary part of the package, no matter what.  When it drops, everyone is going to be poorer.  Every gootuber, movie star, politician, executive, doctor is in the same stonk.

Being in the cards though, a permanent drop should probably be hedged against.  This is why the taxable account can't be 100% stonk & the IRAs can't be 100% cash.

The other factor is the stonk market was much less of the economy in 1987.  The government would most certainly award bailouts if a Japanese asset crash happened here now.

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Renting instead of buying a man cave seems easy enough.  There's a lot less risk of having to sell in a down market.  Much better locations are attainable.  

Helas, lions believe their income is going to be too high to qualify for senior housing & the long term cost of rent is going to be crushing.  If less stonk market exposure is in the cards, there could be more interest income.  The fed is succeeding in artificially lowering 10 year yields & will probably get the current 4 back below 2% before lions retire.  2% interest + 1% dividends are probably low enough.  + social security would be right on the edge.  + RMD's would definitely cut lions off.




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