Trump family suffers a 30% loss! U.S. stock speculation overheated, new bond king urgently calls for "cash is king"

On November 17, the three major U.S. stock indices collectively fell, with the Dow Jones dropping 1.18%, the Nasdaq down 0.84%, and the S&P 500 index decreasing by 0.92%. As the Crypto Assets market fluctuates, the stocks and Tokens related to U.S. President Trump's family have dropped significantly by about 30%. “Bond King” Jeffrey Gundlach warned that the U.S. stock market displays dangerous speculative characteristics and suggested allocating about 20% of the investment portfolio to cash.

The three major US stock indices collectively fell, with a differentiation in tech stocks

(Source: Google)

On November 17, Eastern Time, the three major U.S. stock indices collectively fell. By the close, the Dow Jones Index dropped 1.18%, the Nasdaq fell 0.84%, and the S&P 500 Index decreased by 0.92%. This synchronized decline indicates that market risk appetite is decreasing, and investors' optimism towards U.S. stocks is beginning to waver. As a blue-chip index, the Dow Jones Index's 1.18% decline shows that traditional industrial and financial stocks are also under pressure.

Most large tech stocks fell, with AMD and Intel dropping over 2%, and Nvidia, Apple, Oracle, and Meta falling over 1%. The collective decline of semiconductor stocks has raised concerns about an AI investment bubble, as these companies saw their valuations soar due to the AI craze over the past two years, but the current pullback indicates that the market is starting to question the rationality of these valuations. The decline of Intel and AMD exceeding 2% reflects investors' concerns about the competitiveness of traditional chip manufacturers in the AI era.

However, Google rose against the trend by more than 3%, refreshing its historical high during the session, becoming an anomaly among tech stocks. This strong performance is attributed to the news that Berkshire Hathaway, under Buffett, purchased 17.85 million shares of the parent company Alphabet in the third quarter. Buffett's investment decisions hold significant market influence, and his choice to increase holdings in Alphabet is seen as a strong endorsement of Google's AI strategy and business model. Google has now become Berkshire's tenth largest holding in U.S. stocks, marking one of the few instances where Buffett has made a substantial purchase of tech stocks.

Alibaba rose over 2%, and the Qianwen App has officially launched its public beta. The application is built on the Qwen model, which will gradually cover various life scenarios such as office, maps, health, and shopping. This news has provided a short-term catalyst for Alibaba's stock price, indicating that the market is responding positively to the progress of Chinese tech companies in the AI field.

U.S. stock memory chip stocks rose, with SanDisk up over 4%, and Western Digital and Seagate Technology following suit. This counter-trend rise contrasts with the decline of mainstream tech stocks, indicating that market funds are looking for undervalued targets. U.S. lithium mining stocks collectively rose, with Chilean mining and chemical company up over 9%, and American Lithium Corporation up over 6%. On the news front, Citigroup recently published a research report stating that the recent rise in lithium prices is mainly driven by strong demand rather than potential supply disruptions. Over time, Citigroup is increasingly confident about the strong battery storage demand that may emerge in the coming years.

Most popular Chinese concept stocks fell, with the Nasdaq Golden Dragon China Index down 1.21%. Pinduoduo fell 1.46%, NIO fell 1.30%, Xpeng Motors fell 10.32%, Li Auto fell 4.75%, Bilibili fell 0.23%, Baidu fell 1.63%, NetEase fell 1.71%, Tencent Music fell 0.16%, and Pony.ai fell 6.16%. The overall weakness of Chinese concept stocks reflects investors' concerns about the speed of China's economic recovery and Sino-US relations.

Trump family crypto assets lost 30%, market value evaporated by billions

With the volatility of the crypto assets market, the wealth obtained by President Trump's family from crypto assets has also suffered a significant shrinkage. Within a month since Bitcoin reached a high of $126,272 on October 5, the stocks and tokens related to crypto assets held by Trump and his family have both seen a substantial fall. Mainstream crypto assets are once again under pressure, with Bitcoin briefly falling below $92,000, down 2.48% in the past 24 hours, wiping out all gains made this year.

Since reaching an all-time high in October, Bitcoin's price has plummeted sharply without any clear triggering factors, resulting in a market value evaporation of about $600 billion compared to previous highs. Major tokens like Ethereum have also weakened simultaneously, with some varieties experiencing declines of over 10% in the past week, indicating a significant drop in investors' risk appetite. This comprehensive sell-off shows that the Crypto Assets market is undergoing a deep adjustment.

The Trump family's crypto assets investment portfolio includes Trump Media & Technology Group, as well as blockchain company World Liberty Financial and bitcoin miner American Bitcoin. World Liberty Financial tokens and stocks of American Bitcoin and DJT have all fallen about 30% since the bitcoin peak in October. This sharp decline has severely impacted the Trump family's investments in the crypto assets sector, significantly shrinking the previously reported $1 billion profit by the Financial Times.

At the same time, U.S. listed companies involved in “炒幣” are also facing fierce sell-offs. On November 14, Eastern Time, the stock price of MicroStrategy (MSTR), the world's largest “Bitcoin treasury” company, plummeted over 4%, with the cumulative decline over the past month expanding to 32.69%. It is worth mentioning that the company's total market capitalization has decreased to 57.4 billion USD, while the value of the Bitcoin it holds amounts to 62.3 billion USD. This means that its relative net asset value multiple (mNAV) has fallen to about 0.95 times, marking the first time in the company's history that its market capitalization is lower than the value of its Bitcoin holdings.

This phenomenon is extremely rare in the history of the US stock market and usually indicates that the market has serious doubts about the company's business model or future prospects. Normally, a company with a large amount of assets should have a market value higher than its asset value, as the market value includes the company's operational capabilities, brand value, and future growth potential. MicroStrategy's market value is lower than its Bitcoin holdings, showing that investors believe there are risks in the company's leverage strategy or are concerned that it will face a liquidity crisis if Bitcoin prices fall further.

Garnack warns of overheating in US stock speculation, recommends holding 20% cash

Jeffrey Gundlach, a seasoned investor on Wall Street and CEO and Chief Investment Officer of DoubleLine Capital, stated that many asset prices are currently extremely overvalued, suggesting that investors allocate about 20% of their portfolios to cash to guard against significant market correction risks. Gundlach warned that the current U.S. stock market exhibits dangerous speculative characteristics and is one of the most unhealthy markets he has seen in his entire career. “This market is extremely speculative, and speculative markets always rise to absurd heights, every single time.”

This investor, a graduate of Dartmouth College who began his Wall Street career in the mid-1980s at TCW Group, stated that there is a clear speculative overheat in today's AI concept stocks and data center investments, and warned that momentum investing during prosperity cycles often ends in disastrous failures. Gundlach has over 40 years of investment experience, having witnessed the 1987 stock market crash, the 2000 dot-com bubble, and the 2008 financial crisis, making his warnings highly valuable for reference.

Gundlach warns of three major market bubble areas

AI Concept Stocks: Valuations have reached unreasonable levels, with many companies having price-to-earnings ratios exceeding 100 times.

Data Center Investment: Investors bet that the demand for AI will grow infinitely, but the fragility of this assumption has been historically proven multiple times.

Private Credit Market: Size reaches $1.7 trillion, similar to the situation before the 2008 subprime crisis.

He stated that he remains optimistic about gold, but has lowered his recommended allocation ratio from 25% to 15%. In mid-September, based on the logic that “tariffs will drive up import prices and inflation will be difficult to reduce,” he advised investors to heavily invest in gold. Gundlach claimed: “The overall allocation ratio of financial assets should be lower than normal levels. Every time there is a problem in the financial market, it is because people bought those things that are marketed as safe, but are actually not safe.”

Gundlach's suggested 20% cash allocation is significantly higher than the traditional portfolio standard of 5% to 10%. This defensive allocation means that even if U.S. stocks fall by 50%, investors still have ample cash to buy quality assets at a low point. This strategy was proven to be extremely effective during the 2008 financial crisis, when those who maintained a high cash ratio not only avoided massive losses but were also able to acquire quality assets at very low prices during market panic.