My Investing Muse (31 Mar 2025)
Layoffs & Closure news
Hundreds of Canadian workers, many in the steel and aluminum sectors, have been laid off as a result of U.S. President Donald Trump's tariffs, according to a major union and companies. - Reuters
Earlier this month, San Francisco tech company Niantic sold off its hit Pokémon Go and a few other video game titles in a $3.85 billion megadeal. Now, dozens of local workers are losing their jobs. - SF Gate
Buckle up, recession is coming - X user Darth Powell
The above are some of the layoff and closure news. Let us monitor this, as this can lead to market-wide concerns.
Microsoft stops Data Centre
MICROSOFT DITCHES DATA CENTER DEALS IN U.S. AND EUROPE The canceled leases, many of them recent, are reportedly tied to Microsoft’s decision not to expand support for OpenAI’s training workloads. The move comes as investor caution grows around big-tech AI spending, especially with cheaper rivals like China’s DeepSeek gaining attention. Analysts say Google and Meta are stepping in to absorb some of the freed-up capacity. Microsoft, which plans to spend over $80 billion on AI and cloud this year, declined to comment. Source: Reuters
Microsoft cancels up to 2GW of data center projects, says TD Cowen Follows reports of 200MW of cancellations last month Is this due to underutilization, oversupply and underperformance? - DataCenterDynamics
Microsoft has canceled this development. Is this due to optimization, undercapacity, oversupply or a lack of demand?
Should we consider hedging?
Here is some news about the market that suggests the need for hedging.
Hedge - Investopedia
Mohnish Pabrai: "The Odds That The S&P Delivers over 5%/YEAR For The Next 10-15yrs Approximates ZERO"
Retail flows into technology stocks have more than TRIPLED in just a few weeks. Mom-and-pop investors have bought the largest US tech stocks despite the Nasdaq 100 index falling into a correction. - X user Global Markets Investor
Institutional investors are SELLING Magnificent 7 stocks at a RECORD pace: Hedge funds' net exposure to Magnificent 7 stocks has dropped to a 2-year low. This is even faster-selling than during the 2022 bear market. - X user Global Markets Investor
US recession red flags everywhere? - Economic Times
Speculators are now short the U.S. Dollar for the first time since October
Recession can be felt first in the F&B, travel and entertainment sectors. Where else can there be leading indicators?
Investors are rushing to the EXIT: Fund managers' allocation to US stocks FELL by 40 ppts from February to March, to a net 23% underweight, the lowest since June 2023. Over the last 3 months, it has declined by 60 ppts, the biggest DROP this CENTURY - X user Global Markets Investor
My final thoughts
If the tariffs are not managed properly, China will build everything and partner with the rest of the world, including Canada, Europe, Mexico and more. Will America be left in isolation? Are the citizens willing to work in factories? To work together is better.
Let us review our expenditures, income, and savings. Let us spend within our means, invest with what we can afford to lose, and avoid leverage. I am reviewing my holdings and plan to cut losses with businesses losing their competitive advantages. I would also consider hedging and adding some defensive positions.
Let us do our due diligence before we take up any positions. Let us have a successful week ahead.
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