“We are not going to get the returns in the next five years that we got over the last five years,” said Ed Keon, managing director of Quantitative Asset Management.
Global Market Comments
October 16, 2023
Fiat Lux
Featured Trade:
(MARKET OUTLOOK FOR THE WEEK AHEAD, or TAKING SOME FIRE)
(USO), (UUP), (JPM),
I am writing this letter in a Ukrainian army truck on the banks of the Black Sea right where the Dnieper River flows in. Crimea is 20 miles across the water. We just watched an American HIMERS missile destroy a Russian facility there and the black smoke is billowing upward.
We’ve been stuck here at this army checkpoint for two hours on this gorgeous autumn day so they can check my papers and decide if I’m a Russian spy. I definitely don’t look like your average Ukrainian. What better time to knock a newsletter? After I finished my letter I took a nap.
I have to admit I have been somewhat remiss in following the market the past week.
Whenever I had the choice of checking my stock market app or Look Out Ukraine, which tracks incoming Russian missiles, the latter usually won out. Not always, but usually. Then it’s on to the next app, which gives the location of the nearest bomb shelter.
Some people go to the beach for vacations, while I choose war zones. Different strokes for different folks, I guess. Maybe I’m trying to relive my long-lost youth as a war correspondent in Southeast Asia all those years ago.
It’s Becoming increasingly obvious to all that the Fed is done raising interest rates. The only question is how long they will remain at this elevated level. Then year US Treasury yields, which hit a 17-year high of 4.80% last week, might visit 5.0% and then that’s it.
I must apologize to owners of the (TLT) October $89-$92 vertical bear put spread. I should have sent out a trade alert to take profits on Thursday during the bond market meltdown when the price hit $2.92. I know it hit this price because several followers emailed me to say thanks for the trade.
But I was pinned down by Russian fire on the west bank of the Dnieper River and couldn’t escape until after nightfall. Yes, I know, excuses, excuses.
Technical analysts are having a field day with the (SPY) seemingly trapped between the 50 and 200-day moving averages in a narrowing range. Something big is going to happen eventually.
Indexes could get resolved to the upside when big tech earnings come out the week of October 28, which are expected to be great. It could also be resolved to the downside on November 17 when the House of Representatives shuts down the US government.
Maybe this is why markets are going nowhere. In any case, the disaster in the Middle East is blotting out all other news.
Another matter on which traders increasingly agree is that big tech will lead any upside breakout. A sure sign is that they have been moving sideways for the last 2 1/2 months while interest rates-sensitive sectors have been getting slaughtered. Indeed, Alphabet (GOOGL) is down only 3% from its high for the year, a huge AI winner.
Look no further than Microsoft (MSFT), which trades at only 28.2 times earnings. The company expects 16.2% annual growth for the next three years and is the best growth and AI play out there with its ownership of OpenAI. That’s boosting Mr. Softy’s Azure cloud business enormously.
So far in August, we are up +2.23%. My 2023 year-to-date performance is still at an eye-popping +63.03%. The S&P 500 (SPY) is up +13.42% so far in 2023. My trailing one-year return reached +xx% versus +xx% for the S&P 500.
That brings my 15-year total return to +660.22%. My average annualized return has recovered to +47.71%, another new high, some 2.62 times the S&P 500 over the same period.
Some 44 of my 49 trades this year have been profitable.
It’s a Black Swan a Week that is conspiring to keep markets trapped in narrow ranges. The natural tendency seems to be up into a yearend rally, but they keep getting slammed by shocks, like a government shutdown, a leaderless house, and the Middle East War. The trade has been long big tech, long oil, and short small tech and bonds, of which Mad Hedge caught all four through its various services.
The Middle East Descends on Wall Street, and so far, the damage is limited to a few big techs. Oil (USO) is up 3% and gold caught a bid as well. If this develops into a major regional war expect more downside. It paid to buy every geopolitical crisis over the last 30 years.
Dollar (UUP) Soars on Mid East Chaos, as it catches its traditional flight to safety bid. We could be approaching a top here.
IMF Hikes US Growth Forecast. The International Monetary Fund raised its U.S. growth projection for this year by 0.3 percentage points compared with its July update, to 2.1%. It lowered its euro zone forecast by 0.2 percentage points, to 0.7%. China gets a downgrade too. For the US, 2024 is looking better and better.
The Producer Price Index Jumps 0.5%, more than expected. Markets didn’t really care. Gasoline as the biggest gainer.
The Consumer Price Index Explodes to 3.7%, Inflation is still transitory after over 3 years. Strip out food and energy and core inflation is over 4% year over year. The big question moving into 2024 is if the US consumer can handle these uncontrollable price rises and coalesce a Democratic government that parades around prices not going up less than before. The Fed hasn’t budged from their 2% inflation target, but they are taking their sweet time to get there.
JP Morgan (JPM) Announced Record Earnings, boosting the stock by 5%. With high rates, net interest income is the big winner. Reserves for loan losses were also cut. But (JPM) on dips.
Oil (USO) Jumps 4%, on a tightening of US sanctions against Russia. The goal is to deprive Russia of excess profits used to fund its war against Ukraine. Two foreign-flagged ships were barred from moving their cargo.
My Ten-Year View
When we come out the other side of the recession, we will be perfectly poised to launch into my new American Golden Age or the next Roaring Twenties. The economy decarbonizing and technology hyper accelerating, creating enormous investment opportunities. The Dow Average will rise by 800% to 240,000 or more in the coming decade. The new America will be far more efficient and profitable than the old.
Dow 240,000 here we come!
On Monday, October 16, at 2:30 PM EST, the New York State Manufacturing Index is out.
On Tuesday, October 17 at 2:30 PM, the US Retail Sales are released.
On Wednesday, October 18 at 2:30 PM, the US Building Permits are published.
On Thursday, October 19 at 8:30 AM, the Weekly Jobless Claims are announced. We also get Existing Home Sales.
On Friday, October 20 at 2:00 PM the Baker Hughes Rig Count is printed.
As for me, I’ll record the Story of John Thomas’s Wild Ride, which took place only last Thursday.
We had just finished delivering the last of our food bags to starving peasants in the Kherson region, which is a 12-hour train ride east of Kiev. I received maybe 100 kisses and hugs from aging babushkas who had been cut off from their food supply for months. Most of their homes had been destroyed by Russian fire and they were living in basements.
They said, “Thank you.” I replied, “Stay strong.” They cried.
Then my army escort, a major who we called “Vitally”, got a call. A Russian mortar was harassing Kerson with intermittent fire inflicting casualties, and they were unable to spot it. Would we be willing to act as a decoy and draw fire?
The major looked at me to ask permission. I was on a humanitarian mission and had no obligation to engage in combat. What did I think?
I did the math. A mortar is a notoriously inaccurate weapon, plus we’d be doing at least 80 miles an hour. I decided it was more likely that I win the California lottery than get hit. So I told the major “Sure, why not.” I looked at the rest of my team and they agreed wholeheartedly. So, we headed down to the waterfront in Kherson.
The city has this long street which follows the banks of the Dnieper River. The Russian Army occupies the eastern bank and are well fortified. Kherson was completely deserted without a person or vehicle in sight. It was like a ghost town. Every statue in town had been stolen when the Russians retreated. Once we turned north, we poured on the gas.
We raced along the river as fast as the car would go, weaving left and right to avoid shell craters in the road. Occasionally we hit one and our heads bumped up against the ceiling. We sped through every red light. It was the thrill of a lifetime!
As we approached the bridge over the Dnieper River, which had already been blown up, sure enough, a mortar shell went sailing right overhead, hitting a building 100 yards to our left. Then we screeched to a halt, did a rapid 180, and tore off in the opposite direction. The Ukrainian Army’s 155 mm shells fired over our heads seconds later.
A minute later, we found a bomb shelter and jammed on the brakes. As we piled out of the car the air raid sirens were wailing. Once we got inside, we all burst into laughter. We couldn’t believe what we had just gotten away with.
And I got the whole thing on video.
Sitting in the bomb shelter I felt a stinging in my right hip. I looked down to find an AK 47 7.62mm copper jacketed bullet embedded in my flak jacket about an inch from the edge. When we left the bomb shelter, I inspected the car and sure enough, we had been sprayed with machine gun fire from across the river (see picture below).
It was a lucky hit. The bullet lost much of its velocity crossing the river and the sheet metal of the car slowed it down even further. The Kevlar bulletproof vest did its job. I got away with only a nice bruise.
As we drove out of town the major received another call. Thanks to our effort the mortar had been silenced. He gave me a big smile and a thumbs-up.
At the edge of town, we stopped for a victory photo at the city gates. That’s my team holding the American flag. The major has a scarf covering his face to keep his identity secret.
The major told me I was the bravest man he ever met. Then he turned and started walking back into Kherson.
If you want to watch the video of John Thomas’s Wild Ride please tune into my biweekly webinar on Wednesday, October 18 at 12:00 noon EST.
Stay Healthy,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
Global Market Comments
October 13, 2023
Fiat Lux
Featured Trade:
(THE JOHN THOMAS BIOGRAPHY IS OUT)
(THE EIGHT WORST TRADES IN HISTORY),
(TESTIMONIAL)
As you are all well aware, I have long been a history buff. I am particularly fond of studying the history of my own profession, trading, and investing in the hope that the past errors of others will provide insights into the future.
History doesn’t repeat itself, but it certainly rhymes.
So after decades of research on the topic, I thought I would provide you with a list of the eight worst trades in history. Some of these are subjective, some are judgment calls, but all are educational. And I do personally know many of the individuals involved.
Here they are for your edification in no particular order. You will notice a constantly recurring theme of hubris.
1) Ron Wayne’s sales of 10% of Apple (AAPL) for $800 in 1976
Say you owned 10% of Apple (AAPL) and you sold it for $800 in 1976. What would that stake be worth today? Try $270 billion. That is the harsh reality that Ron Wayne, 89, faces every morning when he wakes up, one of the three original founders of the consumer electronics giant and the world’s largest company.
Ron first met Steve Jobs when he was a spritely 21-year-old marketing guy at Atari, the inventor of the hugely successful “Pong” video arcade game.
Ron dumped his shares when he became convinced that Steve Jobs’ reckless spending was going to drive the nascent start-up into the ground and he wanted to protect his own assets in a future bankruptcy.
Co-founders Jobs and Steve Wozniak each kept their original 45% ownership. Today, Jobs’ widow, Laurene Powel Jobs, has a 0.5% ownership in Apple worth $4 billion, while the value of Woz’s share remains undisclosed but is thought to be a lot.
Today, Ron is living off of a meager monthly Social Security check in remote Pahrump, Nevada, about as far out in the middle of nowhere as you can get, where he can occasionally be seen playing the penny slots.
2) AOL’s 2001 Takeover of Time Warner
Seeking to gain dominance in the brave, new online world, Gerald Levin pushed old-line cable TV and magazine conglomerate, Time Warner, to pay $164 billion to buy upstart America Online in 2001. AOL CEO, Steve Case, became chairman of the new entity. Blinded by greed, Levin was lured by the prospect of 130 million big-spending new customers.
It was not to be.
The wheels fell off almost immediately. The promised synergies never materialized. The Dotcom Crash vaporized AOL’s business the second the ink was dry on the deal. Then came a big recession and the Second Gulf War. By 2002, the value of the firm’s shares cratered from $226 billion to $20 billion.
The shareholders got wiped out, including “Mouth of the South” Ted Turner. That year, the firm announced a $99 billion loss as the goodwill from the merger was written off, the largest such loss in corporate history. Time Warner finally spun off AOL in 2009, ending the agony.
Steve Case walked away with billions and is now an active venture capitalist. Gerald Levin left a pauper and is occasionally seen as a forlorn guest on talk shows. The deal is widely perceived to be the worst corporate merger in history.
Buy High, Sell Low?
3) Bank of America’s Purchase of Countrywide Savings in 2008
Bank of America’s CEO, Ken Lewis, thought he was getting the deal of the century, picking up aggressive subprime lender, Countrywide Savings, for a bargain $4.1 billion, a “rare opportunity.”
As a result, Countrywide CEO Angelo Mozilo pocketed several hundred million dollars. Then the financial system collapsed, and suddenly we learned about liar loans, zero money down, and robo-signing of loan documents.
Bank of America’s shares plunged by 95%, wiping out $500 billion in market capitalization. The deal saddled (BAC) with liability for Countrywide’s many sins, ultimately, paying out $40 billion in endless fines and settlements to aggrieved regulators and shareholders.
Ken Lewis was quickly put out to pasture, cashing in on an $83 million golden parachute, and is now working on his golf swing. Mozilo had to pay a number of out-of-court settlements but was able to retain a substantial fortune.
Mozilo passed away at a well-tanned 85 in 2023.
4) The 1973 Sale of All Star Wars Licensing and Merchandising Rights by 20th Century Fox
In 1973, my former neighbor, George Lucas, approached 20th Century Fox Studios with the idea for the blockbuster film, Star Wars. It was going to be his next film after his American Graffiti, which had been a big hit earlier that year.
While Lucas was set for a large raise for his directing services – from $150,000 for American Graffiti, to potentially $500,000 for Star Wars – he had a different twist ending in mind. Instead of asking for the full $500,000 directing fee, he offered a discount: $350,000 off in return for the unlimited rights to merchandising and any sequels.
Fox executives agreed, figuring that the rights were worthless, and fearing that the timing might not be right for a science fiction film. After all, who bought space toys in 1973?
In hindsight, their decision seems ridiculously short-sighted.
Since 1977, the Star Wars franchise has generated about $27 billion in revenue, leaving George Lucas with a net worth of over $5 billion by 2023. In 2012, Disney paid Lucas an additional $4 billion to buy the rights to the franchise.
The initial budget for Star Wars was a pittance at $8 million, a big sum for an unproven film. So saving $150,000 on production costs was no small matter, and Fox thought it was hedging its bets.
George once told me that he had a problem with depressed actors on the set while filming. Harrison Ford and Carrie Fisher thought the plot was stupid and the costumes silly.
Today, it is George Lucas that is laughing all the way to the bank.
$150,000 for What?
5) Lehman Brothers Entry Into the Bond Derivatives Market in the 2000s
I hated the 2000s because it was clear that men with lesser intelligence were using other people’s money to hyper-leverage their own personal net worth. The money wasn’t the point. The quantities of cash involved were so humongous they could never be spent. It was all about winning points in a game with the CEOs of the other big Wall Street institutions.
CEO Richard Fuld could have come out of central casting as a stereotypical bad guy. He even once offered me a job, which I wisely turned down. Fuld took his firm’s leverage ratio up to 100 times in an extended reach for obscene profits. This meant that a 1% drop in the underlying securities would entirely wipe out its capital.
That’s exactly what happened, and 10,000 employees lost their jobs, sent packing with no notice with their cardboard boxes. It was a classic case of a company piling on more risk to compensate for the lack of experience and intelligence.
This only ends one way.
Morgan Stanley (MS) and Goldman Sachs (GS) drew the line at 40 times leverage, and are still around today, but just by the skin of their teeth, thanks to the TARP.
Fuld has spent much of the last 12 years ducking in and out of depositions in protracted litigation. Lehman issued public bonds only months before the final debacle, and how he has stayed out of jail has amazed me. Today, he works as an independent consultant. On what I have no idea.
The head of equity trading, a very old friend of mine, sold all his Lehman stock well before the bankruptcy and today is content growing papayas on a farm in Hawaii. Timing is everything.
Out of Central Casting
6) The Manhasset Indians’ Sale of Manhattan to the Dutch in 1626
Only a single original period document mentions anything about the purchase of Manhattan. This letter states that the island was bought from the Indians for 60 guilders worth of trade goods, which would consist of axes, iron kettles, beads, and wool clothing.
No record exists of exactly what the mix was. Indians were notoriously shrewd traders and would not have been fooled by worthless trinkets.
The original letter outlining the deal is today kept at a museum in the Netherlands. It was written by a merchant, Pieter Schagen, to the directors of the West India Company (owners of New Netherlands or today’s New York) and is dated 5 November 1626.
He mentions that the settlers “have bought the island of Manhattes from the savages for a value of 60 guilders.” That’s it. It doesn’t say who purchased the island or from whom they purchased it, although it was probably the local Lenape tribe.
Historians often point out that North American Indians had a concept of land ownership different from that of the Europeans. The Indians regarded land, like air and water, as something you could use but not own or sell. It has been suggested that the Indians may have thought they were sharing, not selling.
It is anyone’s guess what Manhattan is worth today. Just my old two-bedroom 34th floor apartment at 400 East 56th Street is now worth $4 million. Better think in the trillions.
7) Napoleon’s 1803 Sale of the Louisiana Purchase to the United States
Invading Europe was not cheap, as Napoleon found out, and he needed some quick cash to continue his conquests. What could be more convenient than unloading France’s American colonies to the newly founded United States for a tidy $7 million. A British naval blockade had made them all but inaccessible anyway.
What is amazing is that President Thomas Jefferson agreed to the deal without the authority to do so, lacking permission from Congress, and with no money. What lay beyond the Mississippi River then was unknown. Today, Jefferson would have been impeached for that.
Many Americans hoped for a waterway across the continent, while others thought dinosaurs might still roam there. Jefferson just took a flyer on it. It was up to the intrepid explorers, Lewis and Clark, to find out what we bought.
Sound familiar? Without his bold action, the middle 15 states of the country would still be speaking French, smoking Gitanes, and getting paid in Euros.
After Waterloo in 1815, the British tried to reverse the deal and claim the American Midwest for themselves. It took Andrew Jackson’s (see the $20 bill) surprise win at the Battle of New Orleans to solidify the US claim.
The value of the Louisiana Purchase today is incalculable. But half of a country that creates $24 trillion in GDP per year and is still growing would be worth quite a lot.
Great General, Lousy Trader
8) The John Thomas Family Sale of Nantucket Island in 1740
Yes, my own ancestors are to be included among the worst traders in history. My great X 12 grandfather, a pioneering venture capitalist investor of the day from England, managed to buy the island of Nantucket off the coast of Massachusetts from the Indians for three ax heads and a sheep in the mid-1600s. Barren, windswept, and distant, it was considered worthless.
Two generations later, my great X 10 grandfather decided to cut his risk and sell the land to local residents just ahead of the Revolutionary War. Some 17 of my ancestors fought in that war, including the original John Thomas, who served on George Washington’s staff at the harsh winter encampment at Valley Forge during 1777-78.
By the early 19th century, a major whaling industry developed on Nantucket, fueling the lamps of the world with smoke-free fuel. By then, our family name was “Coffin,” which is still abundantly found on the headstones of the island’s cemeteries.
One Coffin even saw his ship, the Essex, rammed by a whale and sunk in the Pacific in 1821 (read about it in The Heart of the Sea by Nathaniel Philbrick). He was eaten by fellow crewmembers after spending 99 days adrift in an open lifeboat. Maybe that’s why I have an obsession about not wasting food?
In the 1840s, a young itinerant writer named Herman Melville visited Nantucket and heard the Essex story. He turned it into a massive novel about a mysterious rogue white whale, Moby Dick, which has been torturing English literature students ever since. Our family name, Coffin, is mentioned five times in the book.
Nantucket is probably worth many tens of billions of dollars today. Just a decent beachfront cottage there rents for $50,000 a week in the summer.
The Ron Howard film The Heart of the Sea is breathtaking. Just me happy you never worked on a 19th century sailing ship.
Yes, it’s all true and documented.
Global Market Comments
October 12, 2023
Fiat Lux
Featured Trade:
(MONDAY, OCTOBER 30 SARASOTA, FLORIDA GENERAL JAMES MATTIS STRATEGY LUNCHEON)
(WHY TECHNICAL ANALYSIS DIS A DISASTER)
(SPY), (QQQ), (IWM), (VIX),
(TESTIMONIAL)
SOLD OUT
Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Luncheon, which I will be conducting in Sarasota, Florida on Monday, October 30, 2023. The cost of the luncheon will be $329.
My guest will be General James Mattis, a 48-year Marine Corps veteran, one of our country’s most distinguished soldiers, and America’s most recent Secretary of Defense.
This time things will be a little different. General Mattis and I will be fielding questions about the current state of the world. We will be joined by General Mattis’s former Chief of Staff, Lieutenant General Robert Ruark.
We should make quite an interesting threesome. General Mattis will also be providing some fascinating personal insights during his time in the White House.
An excellent meal will be followed by a wide-ranging discussion and an extended question-and-answer period.
This is a rare opportunity for you to have one-on-one contact with the top brass. Making things interesting is that I will have just returned from the front lines of the War in Ukraine, hopefully with all limbs still attached. There should be a lot to talk about.
I’ll be arriving on time and leaving late in case anyone wants to have a one-on-one discussion, or just sit around and chew the fat about the financial markets.
The lunch will be held at an exclusive Sarasota hotel. The precise location will be emailed with your purchase confirmation. Mad Hedge guests will be assigned their own dedicated table in a ballroom with 200 other participants.
I have been allocated only ten tickets for this event so if you have the slightest interest in attending, please purchase your ticket immediately. They are likely to sell out fast.
I look forward to meeting you, and thank you for supporting my research.
To purchase tickets for this luncheon, please click on the BUY NOW! button above or click here.
Global Market Comments
October 11, 2023
Fiat Lux
Featured Trade:
(FRIDAY, OCTOBER 20 LONDON, ENGLAND GLOBAL STRATEGY LUNCHEON)
(THE HARD TRUTH BEHIND BUYING IN NOVEMBER),
(NOTICE TO MILITARY SUBSCRIBERS)
Come join me for lunch for the Mad Hedge Fund Trader’s Global Strategy Update, which I will be conducting in London at 12:30 PM on Friday, October 20, 2023. A three-course lunch is included.
I’ll be giving you my up-to-date view on stocks, bonds, currencies commodities, precious metals, and real estate.
And to keep you in suspense, I’ll be throwing a few surprises out there too. Enough charts, tables, graphs, and statistics will be thrown at you to keep your ears ringing for a week. Tickets are available for $297.
I’ll be arriving early and leaving late in case anyone wants to have a one-on-one discussion, or just sit around and chew the fat about the financial markets.
The lunch will be held at a private club on St. James Street, the details of which will be emailed to you with your purchase confirmation.
I look forward to meeting you and thank you for supporting my research.
To purchase tickets for this luncheon, please click on BUY NOW! button above or click here.
Followers of my Trade Alert service have watched me shrink my book down to nothing over the last two months, the smallest ever.
That’s because I am a big fan of buying straw hats in the dead of winter and umbrellas in the sizzling heat of the summer. I even load up on Christmas ornaments every January when they go on sale for ten cents on the dollar.
There is a method to my madness.
If I had a nickel for every time that I heard the term “Sell in May and go away,” I could retire. The flip side of that is just as valuable, “Buy in November and stand pat.”
Oops, I already am retired!
In any case, I thought that I would dig out the hard numbers and see how true this old trading adage is.
It turns out that it is far more powerful than I imagined. According to the data in the Stock Trader’s Almanac, $10,000 invested at the beginning of May and sold at the end of October every year since 1950 would be showing a loss today.
Amazingly, $10,000 invested on every November 1 and sold at the end of April would today be worth $702,000, giving you a compound annual return of 7.10%!
This is despite the fact that the Dow Average rocketed from $409 to $33,000 during the same time period, a gain of 81 times!
My friends at the research house, NASDAQ Dorsey, Wright, who run a pretty powerful technical service of their own, have parsed the data even further.
Since 2000, the Dow has managed a feeble return of only 4%, while the long winter/short summer strategy generated a stunning 64%.
Of the 62 years under study, the market was down in 25 May-October periods, but negative in only 13 of the November-April periods, and down only three times in the last 20 years!
There have been just three times when the "good 6 months" have lost more than 10% (1969, 1973 and 2008), but with the "bad six month" time period there have been 11 losing efforts of 10% or more.
Being a long-time student of the American, and indeed, the global economy, I have long had a theory behind the regularity of this cycle.
It’s enough to base a pagan religion around, like the once practicing Druids at Stonehenge.
Up until the 1920’s, we had an overwhelmingly agricultural economy. Farmers were always at maximum financial distress in the fall, when their outlays for seed, fertilizer, and labor were the greatest, but they had yet to earn any income from the sale of their crops.
So they had to borrow all at once, placing a large cash call on the financial system as a whole. This is why we have seen so many stock market crashes in October. Once the system swallows this lump, it’s nothing but green lights for six months.
After the cycle was set and easily identifiable by low-end computer algorithms, the trend became a self-fulfilling prophecy.
Yes, it may be disturbing to learn that we ardent stock market practitioners might in fact be the high priests of a strange set of beliefs. But hey, some people will do anything to outperform the market. While we have the most advanced and sophisticated economy and financial system in the world, our market cycles are still agricultural.
It is important to remember that this cyclicality is not 100% accurate, and you know the one time you bet the ranch, it won’t work. But you really have to wonder what investors are expecting when they selling stocks at these low levels, under $422 in the S&P 500 (SPY). Nothing like closing the bard door after the horses have bolten!
Will company earnings multiples further expand from 19 to 20 or 21? Will the GDP suddenly reaccelerate from a 2% rate to the 4% expected by share prices when the daily sentiment indicators are pointing the opposite direction?
I can’t wait to see how this one plays out.
My Sources for Stock Tips is Interstellar