Rather than ask, “Why buy stocks?” Ask: “Are there any reasons not to buy stocks?” Without a reason to be bearish, being bullish is usually the right call.
Italian COVID deaths/day are flat over the last four days and lower than three days ago. No one notices. Similarly, French deaths spiked today but otherwise look stable since 3/18. The UK too. Check the data not the yak yak.
Here is world stock market performance following each cycle’s first Federal Reserve interest rate hike. Obviously, this should scare the bejabbers out of…..somebody. 🙂
Most folks equate wealth with having money. Wrong. Wealthy folks usually hold a tiny percent of their wealth in money. Money is only good to buy stuff. Wealthy folks spent it if they ever had it on quality or appreciating wealth. Money is a waste.
Quote for the Day: “The main vice of capitalism is the uneven distribution of prosperity. The main vice of socialism is the even distribution of misery.” Winston Churchill
You should like stocks a lot right now. I don’t know if you’ll like them more or less in a few weeks. But, a la the legendary line from Buffett, this is a time to be greedy, not fearful.
Quote for the Day: “Never, tell anyone about your problems, 90% of the people really don’t care. The other 10% are glad you have them.” Charlie Munger.
I stole this quote from Chris Brice of Potter Bell Securities in NYC.
One of my favorite Templeton quotes: Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria. My spin on it: Bear markets are born on euphoria, grow on grinding economics, mature on recession and die on panic.
#WednesdayWisdom
Twitter Quote of the Day: "Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful."--Albert Schweitzer
The stock market is an efficient discounter of all widely known information. If you can easily find something online, in print, on TV, anywhere in our 24/7 news cycle – that news is likely already largely reflected in current stock prices.
U.S. growth rate clearly way past exponential and markedly arithmetic. Follow the data, not the media headlines. Headlines want to be scarier as can be.
It is always a bullish factor when people are afraid of stocks because of high P/Es. The fear is in the market already. It’s when there is no fear you should be fearful.
You may feel like stocks are volatile. And you’re right. But history shows us they become less so if you can think longer term. If you do that, your relative performance likely improves over time. Don’t forget that lesson.
The aftermath soon after drops this steep are always a V-shaped response. It almost doesn’t matter how much it drops from here in the short term. A batter doesn’t swing on an 0-3 count unless he is over arrogant. 2019 will soon be great. When? Don’t know but soon.
Great unattributed quote today from Chris Brice of Bell Potter Securities down under: “Dear optimist, pessimist and realist, while you were busy arguing about the glass of water, I drank it. Sincerely, The opportunist”
Many sentiment indicators are near levels similar to the end of recent bears. While there are negatives in the world today, fundamentals are better than many appreciate. (1/2)
For weeks media has said Sweden & it’s no lockdown & almost 100% voluntary actions would backfire. It hasn’t. It’s curve flattened. Yet few study them for even partial clues for success. If herd immunity can be built, they must be far faster than elsewhere.
Can’t you just feel the falling market making people who were more optimistic become more pessimistic. Rationality would argue for lower prices making people even more optimistic.
Quote for the day: “The fact that other people agree or disagree with you makes you neither right or wrong. You will be right if your facts and reasoning are correct.”— Ben Graham
Panic may or may not return. But selling into panic is always wrong looking 6-24 months out as I said here March 13th. Circumstances change but stock markets don’t in their most basic of functions.
Think about investing as a science. In science, you develop a hypothesis, test, confirm, and retest-continuously. It’s a non-stop query session. While investors don’t have a traditional lab, they do have history. History is the investors’ lab.
Today’s action may be reflective of the shorts being squeezed yesterday followed by most of the 2 & 20 liquidators completing today, then the rebound. If so, the right side of the V should start almost immediately with the New Year.
Overall we have Europe’s first material day of decreased new cases. Yet no one notices. Whether it sustains or not, regardless, that is another bullish sentiment sign, that folks aren’t looking for it:
Quote for the day: “Nothing gives one person so much advantage over another as to remain always cool and unruffled under all circumstances.”—Thomas Jefferson
While having no clue on pricing Monday or next week or three weeks from now, panic volatility tells you of higher prices 6, 12 and 18 months ahead, details aside.
If the Russians could actually do what the magic they’re alleged to have in 2016 in any real way…..why haven’t they succeeded at virtually anything else in the last 40 years?
Quote for the Day: “The intelligent investor is a realist who sells to optimists and buys from pessimists” Benjamin Graham -- Thanks to Chris Brice of Bell Potter Securities.
Quote for the Day: “Never promote a man who hasn’t made some bad mistakes because you would be promoting someone who hasn’t anything worthwhile.”—Herbert H. Dow
Anyone can see what a stock has done. What we want to know is what a stock will do. But no one can. We can’t because despite what someone may have told you, no amount of charting tells us anything about what a stock will do other than the random occasion of unexpected luck.
You make more money sitting on your hands than dancing in their shrieks. This is classic correction action. Bull markets die with a whimper, not with a bang.
Emotions make passive investing near impossible for most folks. You need nerves of steel and ice water in your veins… Or a sensory deprivation chamber to isolate you from every last bit of financial news.
Same as yesterday with one more data point, new Italian daily tests. Note, as new daily tests soar, new daily cases aren’t. That’s a hopeful point media misses. New cases are actually down today.
So sorry to hear today of Jack Bogle passing. Great guy. Great wisdom. Great contribution to the world. An original. A real loss. He will be missed less than most because he will stay with us so long.
Lots of chatter today about backward-looking GDP. Markets look forward. So whether we are in a recession or not, remember: bull markets almost always begin before a recession ends. Stocks pre-price conditions. They don’t wait for data to confirm.
Can’t prove it but it sure behaves like this is hundreds of institutions, like hedge funds, forcing liquidation by yearend or preparing for early January redemptions. I’ve never quite seen a December like this but the closest were bear market bottoms or forced liquidations.
What do you think the effect on markets is when Russia finally gives up on its failing Ukraine war effort? When do you think that is? Or will it end otherwise?
The S&P 500 closed at 269 today. The bottom was 12/24, 37 days ago. 37 days before was Sat, Nov 17th when it was at 273--then Monday at 269. That’s the V I was preaching here starting with posts Dec 21st. Never forget how the V works after big-scary-steep declines.
Great quote sent to me from Chris Brice of Austrialia’s Bell Potter Securities: Opportunity is missed by most people because it is dressed in overalls and looks like work.” - Thomas Edison
Today my father would be 111 were he alive. People ask for photos of him but there were so few. Being the Asperger-ish guy he was he was very, very shy and hence also camera shy. He was…
Quote for the day: “One absolute requirement of a money manager is emotional maturity. If you don’t know who you are the stock market is an expensive place to find out.”—Adam Smith
Another cheap trick I love: medium sized binder clip for cash, credit cards, DL, health insurance and the ilk--instead of wallet or money clip. Lighter, more functional, costs nothing. What are your cheap tricks?
Quote for the day: “If you think you’re cool; you’re a fool. If you think you’re wise; it’s all lies. If you act all snarky; you’re spouting malarkey. If you’re pointing fingers; you’ll get skewered by zingers. If you think you’re smartest; meet the market.”—Ken Fisher
Retirement Tip: Exercise more & eat better. Once you’re retired, you have time to exercise during the best weather the day has to offer. And you can spend more time on menu planning & preparation of meals. Both will help you enjoy and extend your retirement years.
#RetirementTip
Great quote sent by Chris Brice of Bell Potter: “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves” Peter Lynch
If you aren’t sure your reason to trade is correct or you’re in possession of unique-or uniquely framed-information, then you may be overconfident. Sometimes being passive is the most active and appropriate thing to do. Don’t trade just to trade. Practice Humility.
If you care at all, I still think this is all cud chewing correction sentiment before a pretty good up-move, maybe not until next year. I never have short-term views.
Never forget what Sir John Templeton famously said, “The four most expensive words in the English language are, ‘This time, it’s different.’”
#WednesdayWisdom
If you pursue capital preservation as a goal, after 20 years, you likely have your starting value and not much more. Anyone selling you capital preservation and growth as a single, combined goal either doesn’t know much about finance theory or is trying to fool you. Both bad.