How P/E Ratio Affects Your Future Returns in Equities 📊

The price-to-earnings ratio (P/E) measures how much investors are paying for each dollar of earnings. It is calculated as price divided by earnings per share. If a stock trades at $100 and earns $5 per share, its P/E is 20.

🔍 For the S&P 500, the same logic applies at the index level. The trailing P/E uses earnings from the last 12 months. The forward P/E uses expected earnings over the next 12 months, based on analyst estimates. Forward P/E reflects what investors are willing to pay today for projected profits.

Historically, valuation has had a strong relationship with long-term returns. When investors buy the S&P 500 at low forward P/E levels, subsequent 10-year annualized returns have tended to be high. When they buy at high forward P/E levels, long-term returns have been much lower, sometimes negative.

🗓 The historical data show a clear negative relationship between forward P/E and future 10-year returns. At a forward P/E around 22, which is roughly where the S&P 500 trades today, past observations imply average annual returns near 2% over the next decade.

That level of return is barely above zero in real terms and can fall below inflation depending on the macro backdrop. High starting valuations compress the probability of strong long-term outcomes because more future growth is already priced in.

🧠 Past performance is not indicative of future results. Markets can deviate from historical patterns for extended periods. BUT, the best predictor of future behavior is past behavior.

#FAQ

Netherlands Passes 36% Tax on Unrealized Gains 🇳🇱

The Dutch House has approved legislation that will tax investors 36% on annual gains, even if they never sell the asset. Not on realized profits. On paper gains.

Starting January 1, 2028, the Netherlands will tax any annual return. Each calendar year, the tax authority compares the value of your assets on January 1 and December 31. Any increase in value is treated as taxable income, even if you didn’t sell. You then owe about 36% on that paper gain when filing your tax return the following year 🗓

It's a cartoonishly evil fiscal policy and the deliberate nail in the coffin of an already decaying system:

🤔 Take a simple example. You invest $10,000 in a super stock market and it compounds at 15% per year for 30 years without going down (dream scenario). In a normal system where gains are taxed only when realized, that grows to about $662,000. Now apply a 36% tax on gains at the end of every year. Your effective growth rate drops to roughly 9.6%. After 30 years, you end up with around $157,000. More than half a million dollars erased.

🤔 Now a more realistic scenario. You invest $100,000 into a biggest Dutch company: ASML. It doubles in a year. You now have $100,000 in paper gains. The government wants $36,000. You either sell part of your position or pay from your own cash.

Let's say you are diamond hands holder and pay the tax from your pocket. Next year the ASML stock drops 40%. Your $200,000 becomes $120,000. You started with $100,000 and already paid $36,000 in tax. Despite the stock still being above your entry, you are effectively down $16,000 without selling a single share.

😠 Why do people invest? Because if they leave money in the bank, inflation destroys it. Inflation punishes saving. But, an unrealized gains tax punishes investing. So the system punishes people for saving instead of spending, and also punishes them for investing. That’s how you suffocate capital formation.

@Coin_Post

In the last 8 trading days, at least 115 S&P 500 stocks have dropped 7% or more in a single session.

🤔 And yet the SPX is still sitting just 2.6% below its all-time high.

📆 The last time we saw this kind of internal damage while the index was still near the highs was late in the dot-com bubble. Breadth weakened first. The index held up. Then it didn’t.

Historically, when this breadth threshold was triggered, the average maximum drawdown that followed was around -34%.

🔍 The reason the index looks calm today is concentration. In 2000, the top 10 stocks made up about 26% of the S&P 500. Today they are closer to 37%. A small group of mega-cap names can offset widespread weakness underneath.

I can't say things like, "we will crash just like that time," because back in 2000, that concentration was built on unprofitable growth stories and extreme speculation. Today’s leaders are highly profitable, cash-generative, and structurally dominant businesses 💸

@Coin_Post

Polymarket launched 5-minute prediction markets 🎰

Just so we’re clear, your chances of making money in this kind of short-term binary game are worse than roulette.

🎰 At least at a casino you don’t pretend you can “read” the wheel. Here people stare at a 1-second chart and convince themselves they can predict short-term price movements. In fact, the chart makes chances of most traders here even lower than 50% because of their psychology and same reasons why most retail traders fail.

I’ve already seen tweets saying you only need to be right 17 times in a row to turn $10 into a million. Let’s run it:

🧮 If each bet is basically 50/50, then:

P = (0.5)^17
P = 1 / 131,072
P ≈ 0.0000076%

So you’d need about 131,000 attempts on average to expect one 17-win streak.

Don't gamble 🙅‍♂️

@Coin_Post

What Is the Hindenburg Indicator 📊

The Hindenburg Omen is a market breadth divergence signal. It triggers when a large number of stocks are making new 52-week highs and new 52-week lows at the same time while the overall index is still elevated. That combination means the index looks strong, but many stocks are already breaking down.

Normally, when the market is strong, most stocks move in the same direction. You see many new highs and very few new lows. When both start increasing together, it shows conflict inside the market.

📊 That internal split matters because cap-weighted indices can stay near highs even if a large portion of stocks are weakening. The S&P 500 Equal Weight Index is outperforming the standard S&P 500 this year by the largest margin since 1992. That tells you large caps like Nvidia or Apple are not carrying the market the way they usually do.

Look at the chart. Over the last 9 years, Hindenburg signals have appeared near major local peaks with a very high hit rate. The red dots cluster before bear markets.

🚨 Recently, several new signals have triggered again. This does not guarantee a crash, BUT, it means internal conditions resemble prior periods that preceded weakness.

To me, this is one of many factors indicating an upcoming correction and supporting my bearish bias.

#FAQ

@Coin_Post

Man, Economy and State: what can we learn from this book 📕

Author is Murray Rothbard who was an American economist from the Austrian school and who rebuilt economics from the ground up. He starts with a simple point that people act to improve their situation, then builds out to explain prices, wages, interest, money, booms, and what government policies do to all of it.

🤔 He looks at what people actually do after a rule changes. Not what politicians promise, not what the first week looks like, but what unfolds once everyone adjusts their behavior. Most of the damage or benefit shows up later, in the reactions.

Five simple lessons 👇

1️⃣Rent caps sold as protection lead to fewer new apartments, weaker maintenance, and tenants clinging to controlled units because moving means losing a subsidy (just look at Stockholm or NYC). Forced affordability tightens supply and makes the market more rigid over time.

2️⃣Price freezes during crises do not increase availability. They empty shelves, create long lines, and shift access toward those with connections. The visible price stays put while the real cost moves into waiting and uncertainty.

3️⃣Printing money to fund spending does not raise all prices at once. The first sectors touched by new money benefit while wages and everyday goods adjust later, leaving ordinary households to absorb higher living costs without having shared in the early gains.

4️⃣Student loan programs that make credit easy push tuition higher, because universities know students can borrow more and adjust prices accordingly.

5️⃣When healthcare is free at the point of use, demand keeps rising while supply stays limited, and the pressure shows up as months long waiting lists for surgeries and specialist visits (UK and Canada are well-known examples).

@Coin_Post

HyENA Red Packet Campaign: Free USDe 💸

HyENA, a perpetual futures DEX built on Hyperliquid’s HIP-3 framework, is running a 14-day Lunar New Year campaign from February 14 to February 28. During this period, users can claim USDe “Red Packets” distributed in three timed windows per day.

🧧 Each packet is randomized between 0.8 and 888 USDe. In practice, most claims will be around the minimum 0.8 USDe, but you can claim up to 2 per day per wallet, with one per window.

To be eligible for a daily drop, you must meet at least one of the following conditions:

🟢Keep a position worth >$100 open for more than 1 hour

🟢Trade more than $10,000 in volume

🟢Maintain more than $5,000 USDe as margin

The cheapest way to qualify is the first one.

Go to HyENA app, deposit around $30-50, open a low leveraged BTC position, hedge it, keep it open and you’re eligible 💰

And hey, don't forget you can use as many wallets as you wish 😉

@Coin_Post

It's better to own stock in good companies than to trade it 🔍

I have a simple belief. If you invest in a blue chip index, such as the SPX, or hold stock in great companies, you shouldn't micromanage your positions. Instead, you should hold onto them and buy more whenever the price drops significantly.

Let’s say you’re a guy from NYC who is bullish on Palantir and wants to invest in this company for long-term gain. You buy $10k worth of stock at $50. You think it will rise long-term but right now it's overbought so you sell 11 months later at $200 timing the top. $10k turns into $40k. On paper, that’s a 300% gain and a $30k profit.

Because you held less than a year, it’s short-term tax. Federal 24%, NY State ~6.85%, NYC ~3.87%. Roughly 34.7% combined. On a $30k gain, that’s about $10,418 in taxes. Your real profit is about $19,582, not $30k 🧮

Now assume the stock drops to $130 and you reinvest the full $29,582. At $130 per share, that buys you about 227.5 shares. You originally had 200 shares. After a perfect 300% run, paying taxes, and buying back after a crazy 35% drop, you end up with roughly 13.8% more shares.

🤔 Think about the risk-reward here. The odds of perfectly selling the top and perfectly buying back lower are already tiny. But even if you somehow execute it flawlessly and go all-in at ideal prices, the upside is just 14% more shares. You’re taking massive timing and execution risk for a pretty modest edge.

Simply own good companies and indexes. Don't try to trade them ❗️

@Coin_Post

Back in November I wrote that it was a handful of AI megacaps dragging the whole S&P 500 index higher. That story is shifting 😮

Megacaps used to command premium multiples because they were asset-light and didn’t need massive reinvestment. Now Meta, Microsoft, Amazon and Google are spending hundreds of billions on data centers to stay competitive in AI. That’s capital intensity closer to manufacturing than software.

Those four names are about 20% of the S&P 500. They’ve already fallen 10–15% in a few weeks as markets digest how to price this infinite capital expenditure with unclear ROI. If returns compress, they won't trade like high-margin software businesses 📉

Market sees two outcomes: Either AI was overhyped and this spending wave was a misallocation that forces lower multiples and drags indexes down. Or AI truly disrupts everything, from software to white-collar jobs, triggering deflationary pressure and recession. That’s not bullish for equities either.

And the data reflects this. Right now, the S&P 500 is having its worst relative year vs All Country World Index ex-US since 1995. Meanwhile, the equal-weight S&P 500 is outperforming the cap-weighted index by the widest margin since 1976.

📈 That means the average stock is holding up better than the giants I listed above. When leadership weakens and leadership is >20% of the index, it goes down.

@Coin_Post

What is Bitcoin Short-Term Sharpe Ratio 📊

The Sharpe ratio measures return relative to volatility. It is calculated as excess return divided by standard deviation of returns. In simple terms, it tells you how much return you are getting per unit of risk.

🕯 A short-term Sharpe ratio applies that formula over a short lookback window. When the ratio is high, price has been rising efficiently relative to volatility. When it turns deeply negative, price has fallen sharply relative to recent volatility.

Extreme negative readings usually appear during panic phases. In prior cycles, deeply negative short-term Sharpe values aligned with bottoms. These were periods where risk-adjusted returns were so compressed that forced selling had likely already occurred.

🔍 Right now, the short-term Sharpe ratio has dropped to a level historically associated with generational buying zones. Similar readings were seen in 2015, 2019, and 2022, near important cycle lows.

That does not mean the bottom is confirmed. The Sharpe ratio measures short-term risk-adjusted stress, not macro structure or cycle timing. Other high-timeframe indicators still suggest broader bottoming conditions may not be complete ‼️

#FAQ

@Coin_Post

The Fed Is in a Tight Spot 😱

US real GDP for Q4 printed at 1.4% annualized quarter-over-quarter, well below the 3% pace markets were expecting.

📊 At the same time, inflation moved higher. Headline PCE rose 2.9% YoY, and Core PCE came in at 3.0% YoY, both ticking up and marking the highest readings since early 2024.

So now the problem for the Fed is that the economy is losing momentum, but inflation is still running above target.

🤔 If they cut rates to support the economy, they risk reigniting price pressures. If they keep rates elevated to fight inflation, they risk deepening the slowdown and Trump will be furious!

@Coin_Post

Trump promised to impose new tariffs after the U.S. Supreme Court ruled that he overstepped his authority when using the International Emergency Economic Powers Act to impose broad emergency-based tariffs. The Court said IEEPA does not give the president unlimited power to set sweeping global tariffs 🤔

That means many of the “reciprocal” and fentanyl-related tariffs were struck down. Markets reacted immediately, pricing in a lower effective tariff rate. It may sound like a clean win for Trump’s opponents. It’s not that simple.

Tariffs imposed under other laws, including Section 232 and Section 301, remain in full force. And just now, Trump announced a new move: a 10% global tariff on all countries 🌍

So yes, the Court limited one legal path. But the tariff policy itself is very much alive. From the outside, everything may seem chaotic, but their goal is simple: reduce the trade deficit and kick-start reindustrialization in the U.S. 🏭

@Coin_Post

Anthropic announced Claude Code Security, an AI-native tool embedded in Claude Code that scans full codebases for vulnerabilities and suggests patches. Cybersecurity stocks immediately sold off 🔽

Investors reacted to the idea that AI can now reason through code and surface complex security flaws inside the development workflow itself.

That directly pressures traditional SaaS security vendors whose core value was vulnerability detection and triage.

🤔 I've heard many opinions of people assuming that AI would boost these and other companies. Instead, they now have to compete with AI.

Expect the same dynamic across other industries. From digital artists to lawyers, doctors...

@Coin_Post

Easy $20 From Bybit for a $100 Deposit 💰

Bybit is running a promo. Deposit $100 and you can get $10 on Spot plus $10 in TradFi Credits.

✅ The first $10 task is only for users who registered but never made a deposit. The TradFi $10 task is open to everyone.

Here’s how to do it:

1️⃣Register on Bybit. Use this link to qualify for special rewards.

2️⃣Go to the Rewards Hub page.

3️⃣Activate both tasks shown in the screenshot above.

4️⃣Only after activating them, deposit more than $100 in USDT to your account.

5️⃣Then go to the TradFi page and activate TradFi trading for your account.

6️⃣Transfer in TradFi balance from main balance >100 USDT.

7️⃣Keep the funds in place until the task period ends so you can claim the rewards.

@Coin_Post