Well, I missed last weeks newsletter - for that I apologize.
Apparently traveling increases ones odds of getting Covid! First, I got it (tested positive Sunday 7/31, but have been sick since Wednesday), and now Amanda’s got it. It was rougher than I expected but am starting to feel better as of writing this today on 8/1. Amanda is just beginning to show symptoms. She’s stronger than I am, hopefully she won’t get put down too hard.
I have definitely not been as sharp as my usual self - the covid fatigue and headaches have kept me off the computer and away from news and current events longer than I expected. Despite that I have some thoughts to share below.
Let’s begin with a tweet from our friend Lance Roberts at Real Investment Advisors:
Also, from Lance and the team at RIA:
“The most significant risk to the bears is that asset managers are terrified of “career risk.” While many active managers have outperformed year-to-date by choosing to be underweight equities, a failure to rotate successfully back into long exposure could lead to full-year underperformance. That pressure to perform relative to their selective benchmark could force managers to chase stocks higher near term.”
While on my trip in Guatemala it became apparent the market was going to break through some resistance and begin to rally. I felt myself fall victim to what Lance references above as “career risk”. I have spent months formulating a hypothesis as to where the markets are going - researching, reading, surveying. I believe it has further to go down. Yet within a day of the market breaking through resistance and showing clear signs of trending upwards the following thought ran through my head.
“What if I mis-time the bottom?”
It’s a risk every capital manager must confront.
If I was having that thought, many investment advisors were sharing it with me.
And many would jump back on the bandwagon for fear of missing out - causing a short-term jump in stock values as money flows back into stocks.
The question is, will they keep flowing in? Is the worst behind us? Do things just go up from here?
My thoughts:
I believe we are on track if not already in recession.
Inflation has not peaked.
Home prices are only beginning to decline.
Hiring freezes have been enacted at many of the US largest companies.
Layoffs are hitting tech and mortgage companies.
The FED is still hiking rates.
It is my opinion that there is more pain to come.
Should new information indicate otherwise, I would gladly adjust my opinion.
As a result, I continue to tread cautiously and be wary of hype and short-term rallies.
Moving on from the Stock Market - a bonus short video for those of us living in CA - how expensive has it BECOME to buy a home and live in our beautiful state? Patrick Bet David breaks it down.
(20) California, This Video May Trigger You - Watch At Your Own Risk - YouTube
.webp)
.webp)
.webp)
.webp)
