Dear Financial Samurai,
Trade-war rhetoric is heating up again. Trump just threatened a 100% tariff increase on existing tariffs against China starting November 1. But at least there’s some good news — a cease-fire in Gaza and time for China and the U.S. to negotiate before the deadline.
If history is any guide, another deal is likely. As a result, I’m buying on the way down again.
The realistic downside risk for the S&P 500 is around 5,400, or roughly –17%. That’s based on the current forward EPS estimate of $300 × 18X, the average P/E multiple of the past decade. Knowing your downside helps you mentally prepare and better space out your investment tranches.
A sharp recovery this week would be unrealistic, so be careful deploying all your capital right away. There’s still more than two weeks before November 1, plenty of time for more volatility. But if there's another purge on Monday, then I will be buying more aggressively.
Relevant post: How To Get The Courage To Buy The Dip
A Bullish Trip
I’m writing this newsletter on a packed flight back from San Diego, where both LegoLand and SeaWorld were jammed, even on a random Thursday and Friday during off-peak season.
It’s always fascinating to watch what people do with their money, not just what they say. And right now, they’re spending aggressively on experiences that yield zero financial return and 100% memories.
I’ll share more soon about just how busy it was and what I learned from it. But seeing all this spending makes me more confident about buying this dip using my free cash flow and maturing Treasury Bills.
Speaking of Treasuries, I’m pleased to see the 10-year yield fall to 4%, giving a much-needed boost to the real estate market. I believe the commercial real estate recession is over, and spring 2026 will see increased activity and price rebounds.
The Journey To Prove Your Ethnicity
While the world has shifted away from DEI toward “merit,” the past few years were a stark reminder that performance alone isn’t enough. I’ve been around long enough to know that connections, wealth, and luck play outsized roles in success. But before 2020, those X-factors were mostly unspoken.
While in Hawaii for five weeks this summer, I set aside one morning to get official documentation proving I’m part Hawaiian, which in turn, establishes that my kids are too.
Who knows, maybe one day a Hawaiian will be in charge of deciding our futures, or maybe the federal government (or tech billionaires buying up Hawaiian land) will provide reparations or special benefits for Native Hawaiians. You just never know.
If you’re curious about this process and want to prove your ethnicity too, read my journey here: The Cost To Prove Your Ethnicity And Heritage
Yes, it’s sad that we even have to think this way. But having insurance for your identity isn’t a bad idea, especially if you're art of a minority group nobody really fights for at the moment.
Saving Your Children From AI
If you’re worried about your kids getting a fair shot in the future, you’re not alone. I’ve been living the AI disruption in real time.
My dad and wife no longer edit my posts because I use AI. Meanwhile, Financial Samurai’s organic traffic is declining as AI models scrape content without credit. Fewer people are searching on Google because they’re asking ChatGPT or Gemini directly for the answers.
Zoom out, and the data is sobering: layoffs, slower hiring, fewer openings. Fast-forward 10–15 years, and the job market could look bleak for today’s 8-year-olds.
After consulting with many readers earlier this year, I realized most people aren’t thinking deeply about AI disruption. Perhaps it's because they’re not sitting here in AI-central San Francisco, where startups are racing to automate everything in sight.
In my latest post, The Main Way To Save Your Children From AI Is to Invest In AI, I break down a simple framework for how much to invest in AI today to hedge against tomorrow.
Every $1,000 I put into AI makes me feel a little better as a father. And maybe it will for you too, especially once you see the math. The easiest way I'm investing in private AI companies is through Fundrise Venture, where I've so far invested over $500,000 through various accounts.
Government Shutdown Watch
Finally, I predict this latest government shutdown will last 37 days, two days longer than the 2018–2019 record. The longer the standoff drags on, the greater the risk that more government employees lose their jobs.
It’s a bit like what happened at Twitter, where Elon Musk cut roughly 80% of the staff and the company still ran mostly fine.
If you’re a federal employee offered a severance package, I’d seriously consider taking it. The era of guaranteed government job security is fading. Therefore, you might as well earn private-sector pay instead.
To Your Financial Freedom,
Sam
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