Nov

12

Transition?, from Larry Williams

November 12, 2026 |

I wonder if the transition we saw at the polls yesterday is part of a great societal wave change.

With the advent of artificial intelligence, more reliance on government for public transportation, health, etc., we're switching to a social democracy. The rugged individualist idea is gone, there are too few of us, and it's a solution that doesn't seem to work well for the masses who don't want to stand up and fight their own battles. The masses, in any democracy, have the majority of the votes.

I'm deeply thinking this is the change that we've just seen: a transition in politics that has far-reaching ramifications for stocks.

Edward Kozun writes:

Playing with some data with my analytics bot that I built and here is the result:

The wave-election test is done, and history doesn't back buy-healthcare, fade-tech idea. After the four Democratic waves in 2006, 2008, 2018 and 2020, energy and tech beat SPY most often. Healthcare, biotech and staples lagged.

Over 12 months, tech beat SPY all 4 times, by 10% on average. Energy beat it 3 of 4 times, by 17% on average.
Biotech lagged all 4 times, by about 10% on average. Healthcare lagged by about 5%.
The first two days since this election look like LW's thesis so far. Medical devices are up 6% against SPY, and tech is down 5% against it. Two days is noise, though.

Treat this as context, not a rule. It's only 4 events, and the 2008 crash and COVID muddy them. Sector ETFs only go back to 1998, so 1994 couldn't be tested.

In Texas, the vote seemed it was mostly about corruption and getting rid of Paxton vs liking Talarico. Thinking a lot on how society is changing for sure.

Asindu Drileba asks:

Positive or negative ramifications? Of what kind?

- Norway type wealth tax?
- Higher capital gains tax?
- Subsidies on consumer products?

Kora Reddy looks to Daily Spec:

Mid - Term Election Rally?
October 30, 2014

ps: Maybe the end of radical right wing and India's Modi next #IDon'tKnow

Nils Poertner comments:

Societies looking for too much certainty, we as specs want to embrace the uncertainty. No need to know it all in advance as it can't be known.

Peter Ringel writes:

Larry Williams wrote:

The rugged individualist idea is gone, there are too few of us

When Vic died, one of my first thoughts was: god dam, we lost another voice for freedom. Junto, "Agrarians", "the idea, that has the world in its grip" that deeply resonated with me.

And I, too, fear the day, we are too few. And yes, the Millennials as a generation have a terrible socialist bias. Europe is long gone. America still held better.

But I also see the next generation. The new "builders", often AI empowered. Anecdotally, they seem to be more based.

And we do not need 100%. Progress, invention, business and freedom is driven by a sufficient percentage. The entrepreneur citizen.

What percentage is needed? 20%?

Nils Poertner adds:

Once we enter a proper bear mkt and recession, deficits will be a big topic again#
Social moods going to change as well. As a spec we just go with it whatever comes.

James Gavrity writes:

I was expecting chaos; I read Tuesday's results this way; maybe it's wishful thinking. I believe this is just another cycle, The individualist idea is gone—I hope not, maybe just a bit dulled. The left-wing progressives and social democrats may be getting the headlines, but the real winners were the centrists who actually picked up seats. Even California voters rejected a tax targeting billionaires.

I don't think Voters were endorsing socialism or turning against capitalism. They were voting against the current state of affairs and broken promises. For more than a decade, politicians from both parties have been consumed by ideology, letting their titles go to their heads and focusing on party elites instead of the practical, common-sense concerns that exist within 50 feet of their constituents' front doors. This BS has to end.

I still hope and believe Capitalism, private enterprise, and small business remain the foundation of this country's strength and prosperity. The grass may always look greener on the other side of the fence, but many people living in advanced countries that supposedly have everything would gladly trade places for the opportunities available here.

For both the country and the markets, the real test now is whether Republican and Democratic leaders, along with these newly elected members, can sit down together, cut out the division and political theater, and get back to doing the people's business. I hope they understand people were not voting for them; they were the only choice we had. Leaders like Ronald Reagan and Tip O'Neill, or Bill Clinton and Newt Gingrich, often had sharp disagreements; they would regularly have lunch together and found ways to work together and get the people's business done. I hope this new group of leaders sits down and examines how and why they came to power.

At the end of the day, many of the promises being made by some of the newly elected democratic socialists will run into reality. Programs and benefits cost money, and eventually someone has to pay for them. When people enter the workforce, pay taxes, cover their own bills, and experience the real-world costs of housing, healthcare, technology, and daily living, their perspectives often become more practical. Problem is the 28-year-olds still living at home with $2,000 phones and $400 shoes, acting like it's a birthright. I've known plenty of former hippie idealists who lived in a commune in the 1960s who eventually got a reality check, went to work on Wall Street, became THE MAN, gave birth to "Fortunate Son," raised families, and realized that nothing is truly free. Probably missed moms home cooking, In the end, lasting prosperity comes from opportunity, hard work, innovation, and economic growth, not from promises that cannot be funded or sustained. The kids will find that out when those free buses break down and get gum stuck on their $200 jeans, they will be begging for a private pay option or an uber. Better yet they want a free clean bus, they have to give 10 hours a month of community service cleaning it with a mop and bucket of Clorox to clean the bus; I love to see that one. My kids think free internet stinks. They know this because when I took them to Cuba in 2019: "Wow, Dad, free internet!" They have free internet for all, but you just have to go to the public square to use it, and it takes half an hour to upload a selfie. When they got home they were so happy to pay the $49 a month bill I gave them.

William Huggins responds:

a city-owned grocery store is unsustainable but slashing trillions from federal revenues is? please rest assured that its not the "broke poor" who don't know how to math - its rich would think they can keep milking the middle class while calling them lazy communists who have been making the really bad choices.

Adam Grimes writes:

I don't think there's a lot of subtlety here. I believe this was simply a swing of the pendulum–the far right swing was easily predictable due to the social climate in the Covid and post-covid area… as people are saying, it was a reaction to "woke".

But, again predictably, the pendulum swung very far in the other direction and much of what is happening under the current administration reads as abuse and corruption to the "person on the street", in addition to seeing multiple failed promises. I think there's also at least the perception of an undertone of cruelty and Christian Nationalism that was certainly a step too far.

I read the election results as a reaction to that. What happens next? I'm guessing we swing too far to the other side. The question becomes when things have gone too far for the center to hold. Hopefully there's an element of anti-fragility in the system–seems that there may be.

It seems to me (based on nothing but a guess) that claims that the era of individualism is over are histrionics, that it's too soon for AI to be having any real impact on the social fabric (because people don't understand what has happened), and that historical analyses have limited power here. I think we're seeing the rise of societal level memes (I don't mean the internet pictures you send to people… I'm using the word in its bigger and slightly older sense) that are driving change.

Good or bad? Both, as always. And neither at the same time. I suspect we are near the end of some things.

The real "thinking around the corner" is that financial markets in general could, conceivably, cease to exist. The reason they exist is that it's the only way, in all of human history, we've found to allocate resources (capital and other resources). Correctly aligned algorithms might have the potential to do something we've never seen before… anything from efficient allocation to extinction of the human race.

We do live in interesting times.

Larry Williams is sanguine:

I am just about fully retired - 2027 forecast and that’s it.


Comments

Name

Email

Website

Speak your mind

Archives

Resources & Links

Search