Investing November 7, 2026 0 Comments

Tax Turmoil Incoming: Why This Weekend’s Poll Could Shatter Your Portfolio and Rewrite Your Financial Playbook

Navigating the swirling currents of the stock market this week felt a lot like discovering a mysterious aquarium gadget called the Carlson Surge Device — remember those? It’s an obscure contraption that creates sudden, chaotic surges in aquarium water flow, pushing fish around in a wild but brief frenzy before settling back down. That image stuck with me amid the market’s turbulence, where sudden bursts of activity upend expectations, only for calm to eventually return. Ever feel like the stock market’s rhythm is a secret code that only a few can crack—while the rest of us are left nodding in bewilderment? Whether you’re a seasoned investor or just someone watching from the sidelines, this week’s rollercoaster of election surprises, AI trade shakeouts, and market reversals gives us a vivid reminder: markets don’t just climb gently; sometimes they plunge like elevators breaking free. So how do you ride this tidal wave without losing your balance? Let’s dive in and unpack the chaos beneath the charts, because sometimes the best lessons come from the quirkiest of metaphors. LEARN MORE

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What caught my eye this week.

Shared references are a tricky business. For example, if I reach for a few French-ish sounding phrases from the classic BBC sitcom ‘Allo, ‘Allo, a younger reader might think I’m having a brain event.

Meanwhile, I’m sure older folk who weren’t paying close attention to the music scene in the 1990s must often mistake the song title subheadings in Weekend Reading for cryptic brain teasers. Or maybe misguided attempts at poetry.

But today I’ve a reference that will unite you all: in incomprehension.

It came to mind during what was a turbulent week in the stock market, and then I couldn’t un-think it.

A blue wave

I was fascinated as a young aquarist by a bit of kit called a ‘Carlson Surge Device’.

This DIY contraption created chaotic water turbulence inside aquariums. Fish would be happily pushed about by suddenly strong currents, with a force that was impossible to create in those days by directly using aquarium pumps.

Instead of trying to push water in the tank with puny electric motors, Waikiki Aquarium director Bruce Carlson instead plumbed a large reservoir vat above his reef tank display.

This vat was slowly filled with water pumped from the aquarium below.

The clever bit: a syphon tube that led from the vat back down into the aquarium.

Without getting deep into the hydraulics, this syphon would periodically be completed when the water in the vat reached a certain threshold. At that point the stored water would surge down into the aquarium, delivering a tremendous if short-lived flow.

Within a few seconds, the reserve was drained completely. The syphon was broken, the energy spent, and the slow refill of the vat began again.

Here’s a video:

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Well, this Carlson Surge Device seems to me a perfect metaphor for the old investor adage that stocks ‘take the stairs up, but the elevator down’.

The only count against the Surge Device is I’m sure none of you have ever heard of it!

Trump trumped

As I often say, if you’re a passive investor looking at your portfolio on account of my talk of a roiling stock market, you might now be feeling bemused.

After all, a global tracker fund was down less than 2% for the week for UK investors. Even the tech-heavy Nasdaq that took the brunt of the market motion fell barely 4%.

However those numbers belie a week of dramatic reversals, deleveraging out of crowded AI trades, hedge fund liquidations, and the market generally doing what it does best. Which is making those who take a deeper interest in it look and feel like idiots.

Stocks initially soared – to the surprise of virtually all market forecasters – when the Democrats swept the board in the US midterm elections.

But Trump had barely begun to make his excuses before prices reversed and plunged.

You’ve got to roll with it

In the usual way, narratives were applied to these events after the fact.

This time we’re told the admittedly stunning US election results have put the pace of its AI data centre rollout into doubt.

This isn’t unreasonable. Given how far some stocks had climbed on the presumption of almost insatiable demand for semiconductors and the ‘compute’ that powers AI – not to mention a borrowing binge lately layered on top – any slowdown in the buildout risks profit downgrades and a derating across the board.

Well…maybe?

I’ve blown my word count this week talking about aquarium plumbing. Hence we can’t get too deep get into the prospects for slower data centre construction.

But I would point out these monstrous facilities were unpopular and hard to build before.

Also, the whole AI rollout has been marked by one constraint after another. This just seems like the latest to me, and perhaps even something of a welcome circuit breaker.

For my part, I’d say that if the Trump era really is on the way out after this week’s results, then that will only be good for businesses and hence investors in the long run.

Trump’s antics were disruptive to global trade as well as global politics. His dumb choices – not least last year’s Liberation Day tariffs – have put an inflation tax on the whole world, and more especially at home.

Big companies have found it almost impossible to plan for the future when edicts from the White House can change the rules in the time it takes to read a Tweet.

That’s not even to get into big issues like climate change and global stability. If shares going down 20% is the price we have to pay to return to normality, then sign me up.

Wishy washy

A more straightforward explanation for the wild gyrations below the market’s surface this week is that certain shares went up far too much and now they’ve come down.

I know, it sounds far too simplistic. Where are the fancy drivers?

But think Carlson Surge Device, not invisible machinery. Think flows, vacuums, liquidity, and little fishes being blown all over the place.

Here’s how some leading chip makers climbed this year before the week’s little rout:

Source: Google Finance

The putative wipeout this week on the triggering of the market’s liquidity syphon barely registers on the right of this chart. Rather, the drops more seem to me a continuation of prices coming off the boil since summer.

Admittedly, things do look worse for some of the other AI-related companies. Don’t glance at the price chart of a ‘neocloud’ such as Coreweave on an empty stomach.

But mostly I’d be wary of reading too much into one week’s (very) choppy prices.

The relentless rise of a narrow cohort of stocks has been worrying many of us for years.

Even passive investors were getting antsy that expensive US technology stocks were crowding the diversification out of their supposedly globe-spanning tracker funds.

So we shouldn’t be surprised when a reset happens. And we shouldn’t assume it marks a watershed for the stock market.

Taking stock

It might, of course. Stock markets do crash, and they will again.

I’ll be writing here again someday about the US market being 25% or more off its highs. I’ll be pointing to charts showing that it has recovered before.

This is the price of entry. We build it into our financial plans by choosing to diversify across lots of companies, and across different assets, and by keeping our eyes to the long-term. And when the long-term is shrinking for us – typically around retirement age – we bite the bullet and dial down the level of risk we’re taking.

We do all this because you don’t get much warning of a real stock market suck-out.

One day some trigger is reached or something breaks, and the money drains away. It’s exciting to watch but bumpy to live through.

But eventually the energy is exhausted, we’re left bobbing about in the wake, and the pool refills again.

Now you see why the Carlson Surge Device is the market metaphor you never knew you needed?

No? Okay, I’ll get my coat.

Have a great weekend!

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News

UK interest rates hiked to 4% – BBC

House prices falling at the fastest rate for three years… – Mortgage Strategy

…and they’ll drop by 1.5% in 2027, predicts Savills – This Is Money

Desperate flat sellers are creating a downward spiral for prices – This Is Money

Exporters optimistic after UK-EU deal cuts post-Brexit red tape – BBC

Employers to be forced to put salaries on job adverts – Guardian

‘Quiet quitting’ could be hitting the UK economy – BBC

Revolut’s valuation jumps 53% to $115bn – TechCrunch

New York child dies of measles in state’s first case for 30 years – Guardian

Over 80% of global bonds now yield more than 4% – Snippet

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