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Category: Morning Note

Like Pounding Sand

“Based on my own personal experience – both as an investor in recent years and an expert witness in years past – rarely do more than three or four variables really count. Everything else is noise.”

~Martin Whitman


Good Afternoon,

The summer haze is taking its time in clearing.  Volumes remain lower than normal and air pockets are evident as seen yesterday and on Friday.  The “concerns” are flying in the headlines as we go from one problem to another.  The milli-second that the inflation data came in lighter than expected, overnight retail sales data from China came in very light as well.

This morning, bright and early, the headlines were filled with the “Slowdown in China” and any stock selling anything retail in China is getting shellacked today.  Classic examples of the mental mayhem which takes place as markets wait for the real data that moves elements along.

There, I am afraid we will watch these antics until we get to the later stages of September and early October.  Then, we will have set the stage exactly as a long-term investor would prefer it:  kicking off the next earnings season with very low expectations and concerns about the ability to continue forward.  This tends to be vastly better than rallying with excitement into the opening days of Q3 reports.

A Review

As we covered throughout summer, trade ranges serve a purpose.  They build a foundation for what’s next.  The longer they last and get tested, the better the breakout is afterward.   This summer, while no significant “swoon” was forced upon us, the internal churn was evident for anyone watching.

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Swan Dive

“Compound interest is the eighth wonder of the world. He who understands it, earns it.

He who doesn’t, pays it.”

— Albert Einstein

Good Morning,

I mean he wasn’t the sharpest nail in the drawer but heck, he had some good quotes : )

Seriously, hope you had a great weekend as the summer haze is just about officially burned off.

Back to the grind as they say – and wow is this mountain ahead a big one.  May indeed be one for the record books as it unfolds.  The media was all over the “come back from summer” opening week, with markets down all 5 days and an ugly flurry into the finish late Friday afternoon.

The headlines were almost comical at times:

“Market Dives for 5 Days Straight”

“Selling Defies Effort to Reverse Market Tailspin”

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“The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.”

~Benjamin Graham

Good Morning,

I am always amazed over my nearly 40 years at this, when I watch periods of time when so much stress and angst is being felt while the fundamental data shatters records.

The latest?  JOLTs – the job openings report that is akin to the back-order pipeline in the world of manufacturing and heavy industry.  Record job openings suggest record future investment and Capex.   Well guess what?  The latest JOLTs report is a record-setter for sure.

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Hidden in The Shadows

“Once you start down the dark path, forever will it dominate your destiny. Consume you, it will.”

– Yoda


Good Morning,

Hey – we made it!  We got through the perilous, dangerous, chilling, hazardous, risk-filled summer of 2021.  Now, we face the perilous, dangerous, chilling, hazardous, risk-filled last 4 months of 2021.  You get the drift.

Nothing changes on this pathway from the media’s perspective.  There will be no good news.  There will be no “let up” is “the dangers facing us.”  Good Lord, they are all starting to blend together.  Re-read the opening quote today – it will help.

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Happy Labor Day

“The biggest risk of all is not taking one.”  — Mellody Hobson   Good Morning, Just a quick note from all of us to you and yours:  Happy Labor Day…

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The End is Nigh

“The big money is not in the buying or the selling, but in the waiting.”

~Charlie Munger

Good Morning,

Ah yes, for sure.  Another variant is lurking, catching the CDC’s attention just as the Delta variant caps out.  It’s called “mu” by officials and we can be assured more news is coming.

So is the end of summer 2021.

Such a great one for the record books but sort of a “ho-hum” from the audience.  Yea, so what seems to be the response.

Records were shattered everywhere.  It’s all because of the Fed they say.  This is the same crowd that said “it was all because of the Fed” as we came out of the Great Recession back in late 2009.  They said it was just QE.  They said is was DC.  They said it was only for the rich.  They said it was rigged.

They said all of that about 400% ago.

Expect the same reference 12 years from now…simple math…very, very difficult waiting.

Can you just imagine how much crap we are going to have to wade through in the next 400% upswing(s)?

Lots of problems, quite a few disasters, at least a couple which will qualify for “Armageddon” coverage and many more potholes just to screw things up at times.

Count on it.

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Ending The Haze

“Governments never learn.  Only people learn.”

– Milton Friedman

Good Morning,

What a summer. huh?  So much for the terrible (fill in the blank) and its aftermath.  Summer has another week or two to go, not officially, but by market haziness and dreadfully low volumes.  For the second summer in a row, there was nothing one could refer to as a summer swoon.  Sure there were those two really ugly days – but a “swoon?”  Nah – nothing to report there.

The earnings season for Q2 became so good that it almost got lost in reporting.  There were so few misses that the media needed to find something else to chatter about.  In the end?  Well, in the end, no record was left standing.  The “comeback” from a global pandemic shutdown continues to weave its way into the record books, shattering anything most of the crowd expected.

Margins are robust – we expect them to expand another 20%+ plus over the next 24 months, from 11.5% or so in 2021 to over 14% by 2023.  Blame technology for that – and layers and layers of “new ways to do things” in every single industry or service area of the US economy.  The momentum is significant.

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Just In Case

“We don’t have to be smarter than the rest. We have to be more disciplined than the rest.”

~ Warren Buffett

Good Afternoon.

Here is hoping you and yours are set to have a wonderfully enjoyable and relaxing weekend for sure.

As the haze thickens more in the next couple weeks and then slowly fades away, soon we will be back to worrying about all sorts of things.  Visions of nasty shopping season headlines are already dancing in my head. The joy of it all…

“Sources tell us that shoppers spent 5.3% less than last year between 10:00am and 2:40pm on November 14th.”

I digress – but alas, you get the point.

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I Know – It Stinks

“The stock market is a device for transferring money from the impatient to the patient.”

– Warren Buffett

Good Afternoon,

If I’ve said it once, I have said it 4.218 billion times – summer stinks in the stock market. : )  And August is almost always the more frustrating month.  And here we are – staring into the teeth of the summer swoon.

It has taken a mere few hours and just 400 or so points – nothing to a long-term investment plan – to cut the bullish sentiment in the Fear and Greed Index from 49 to 33.  That is a 32% drop for a move in the market of less than 1.5%.

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Some Perspective

“In investing, what is comfortable is rarely profitable.” 

~ Robert Arnott

Good Morning.

I’d like to encourage you to consider the idea that much of what the public audience has been “taught” about investing and the building of wealth management plans – is almost entirely wrong.

Risk is a required part of the equation.  Volatility is a required part of the equation.  Corrections are a required part of the equation.  Just as are trade ranges, choppy windows, sector rotations, periods of being ahead and periods of being behind.  Market movement or volatility do not define your risk – though one would never know that listening to the garbage produced as financial media today.  Time – yes – time, defines your risk.  Always has – always will.

I have seen it said another way where Daniel Crosby wrote in The Behavioral Investor:

Trusting in common myths is what makes you human. But learning not to is what will make you a successful investor.

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Additional Articles

Lights Out

“What we learn from history is that people don’t learn from history.” ~Warren Buffett   Good Morning, Don’t mind me – that noise you hear in the background is me…

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Happy Thanksgiving to You and Yours

It is that wonderful time of year – a time for family and friends.   We send our very best wishes to you and yours for the highest of blessings this…

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It’s All Around Us

“Those who are not grateful soon begin to complain of everything.”

Thomas Merton

Good Morning.

Once again, sending along heartfelt wishes to you and yours for the very best of blessings on this Thanksgiving Holiday.  God knows, we all deserve it given the last nearly 24 months of confusion.  We send our best to you and again thank you for the opportunity to be of service.

Know that as 2022 beckons, we will work consistently for your interests.  We are grateful for the opportunity – and as always, patience will be the toughest part of the game as we let what is unfolding all around us continue to expand the horizon ahead.

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Happy Holiday Week!

“The investor’s chief problem, and even his worst enemy, is likely to be himself”

~Benjamin Graham

Good Morning!

Before we start into the boring stuff, we want to send our heartfelt wishes to you and yours for the most blessed and enjoyable Holiday Season.  Kicking off this week with Thanksgiving, we want to give thanks to you – as always – for the opportunity to be of service to you.  We are always extremely grateful and enjoy this time of year because we get to tell you that again LOL.

Have a fantastic week with Family and Friends!

And now…to the boring stuff

I know it’s boring because we keep having to tell how records are being set.  Yes, there will be a pause in here somewhere.  Yes, there will be a short window in the pathway ahead where you will swear market investments stink.  It will all be a required part of the pathway that is laid out in front of us all.  Like it or not, our economy is going to running at full tilt for an awfully long time.

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Fever Breaking?

“The stock market is designed to transfer money from the active to the patient.”

~Warren Buffett

Good Morning,

Closing out the Q3 earnings season has become a bit boring in its coverage.  My sense of things?  The media could find few monsters in a string of reports that consistently beat estimates, even as the “inflation war” rages on.  I suppose they realized the “scary stuff” needed to come from somewhere else, hence – yet another record-setting earnings season is quietly put to rest.

Expect more records – with a pause here and there along the way.

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Our Thanks

How do you say thanks for the things they have done? What words would sufficiently honor their bravery and sacrifice? What letter could we write to thank them for stepping…

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