Discovering A $$$ Lobang! Find Opportunities In Financial Chaos!

Summary

The speaker discusses the current volatility in the US stock market and treasury bonds, highlighting the fall of US assets amidst geopolitical tensions and a potential US-China trade war. They explore the opportunity presented by high-yield US Treasury bonds, while considering the risks of withholding taxes and exchange rate fluctuations. Despite the crisis, the speaker suggests that this situation may offer a silver lining for investors, urging feedback and collaboration from the audience to navigate the complex market dynamics. The video emphasizes the importance of seizing potential opportunities while managing risk.

Takeaways

• 😀 The U.S. stock market and Treasury bonds are experiencing significant volatility, with many assets falling in value.
• 😀 There's a possible investment opportunity in U.S. Treasury bonds due to their high yield rates, currently approaching 5%.
• 😀 The U.S. has intensified its trade war with China by imposing tariffs, though both countries are now signaling a potential for talks.
• 😀 The U.S. Dollar has fallen recently, reflecting global fear regarding U.S. assets and trade policies.
• 😀 Despite the risks, Treasury bonds could offer an attractive return compared to traditional stocks or fixed deposits.
• 😀 A potential bond price drop could lead to even higher yields, possibly reaching 6% if bond prices fall further.
• 😀 The key risk with U.S. Treasuries involves exchange rate fluctuations, especially with the U.S. Dollar's current downward trend.
• 😀 Withholding tax on dividends from U.S. Treasuries is a concern, but there are potential tax refund mechanisms through brokers like Interactive Brokers.
• 😀 Some brokers, like Mumu, are reportedly offering tax exemptions for non-U.S. tax residents on Treasury bond dividends.
• 😀 The speaker seeks feedback from the audience to help assess whether the current situation presents a genuine investment opportunity or risks outweighing the rewards.

Q & A

What is the current situation with US assets mentioned in the video?

The video highlights that almost all US assets are currently falling, with a lot of volatility observed in major indices like the S&P 500 and NASDAQ. There's a significant downward trend in these assets, which has raised concerns about a potential crisis.

What does the speaker mean by 'W-shaped' trajectory in the market?

The speaker is referring to the market's daily fluctuations, which seem to follow a 'W-shaped' pattern, meaning there are quick rises and falls, unlike the typical V-shape or U-shape recovery. This indicates a volatile and uncertain market.

What is the significance of the US Treasury bond market in the current scenario?

The US Treasury bond market is a key focus because bond prices have been falling significantly, leading to a rise in yields. This situation is unusual and presents potential opportunities for high returns if one invests in US Treasury bonds.

How does the US-China trade war impact the market?

The US-China trade war is intensifying with increased tariffs on US goods. This geopolitical tension is creating uncertainty in the markets, and the speaker suggests that both countries might be heading towards negotiations. The speaker also mentions the possibility of the EU joining China against the US.

What is the speaker's perspective on the US government's approach to China?

The speaker suggests that while Trump is publicly claiming he won’t negotiate unless China reaches out first, this is actually a sign of the US backing down. The speaker views Trump's posture as part of a strategic game, trying to avoid appearing desperate while still signaling a desire to negotiate.

What is the main investment opportunity presented in the video?

The main investment opportunity discussed in the video revolves around US Treasury bonds, which have high yields (around 5-6%) due to falling bond prices. The speaker suggests that this could be a good time to invest in these bonds, despite the risks of exchange rate fluctuations and withholding taxes.

How do withholding taxes affect the potential returns from US Treasury bonds?

Withholding taxes, which can be as high as 30% on US Treasury bond dividends for non-US tax residents, reduce the net returns. However, the speaker mentions that there are potential ways to mitigate this tax, such as through brokers that offer tax exemptions or refunds.

What strategies are mentioned to avoid withholding tax on Treasury bond dividends?

The speaker suggests that brokers like Interactive Brokers and Mumu may offer mechanisms to mitigate or refund the withholding tax on Treasury bond dividends, especially for non-US tax residents. Interactive Brokers, for example, might refund the tax after reclassification at the end of the year if the bond qualifies as Qualified Interest Income.

What are the risks associated with investing in US Treasury bonds at this time?

The risks include exchange rate fluctuations, as a drop in the value of the US dollar could reduce returns. Additionally, there is the risk of continued volatility in the bond market, which could cause bond prices to fall further, potentially affecting yields and returns.

Why does the speaker consider the current market situation as offering a 'silver lining'?

Despite the crisis and market volatility, the speaker sees a potential 'silver lining' in the form of high-yield investment opportunities in US Treasury bonds. If investors can navigate the risks, such as withholding taxes and exchange rate fluctuations, they could secure substantial returns in this uncertain market.