Category: Morning Note

“If you’re looking for a home run — a great investment for five years or 10 years or more — then the only way to beat this enormous fog that covers the future is to identify a long-term trend that will give a particular business some sort of edge.”
— Ralph Wagner

Good Morning,

It’s summer.  Worse than that – it is August – the slowest part of summer.

The part of summer that often leads the most number of investors astray.  The headlines get worrisome, the forks in the road seemingly become more numerous, the chatter gets louder, the road ahead gets darker.  All of it – every single bit of it – happens every August.  And yet, each one – before now, have been a buying point.

The news we should stay focused upon – remains relatively mundane, somewhat repetitive and almost all positive for the future waves of growth ahead.  It’s funny how positive statements about our present or future – are now referred to as just being “optimistic.”  I cannot tell you how many times we can repeat elements which are indeed unfolding around us – and we hear this back:  “Mike, it’s good that you can be optimistic.”

“Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.”

~ Charlie Munger

Good Morning,

I will keep this short so as not to interrupt the summer vacation fun.

If you feel like you are walking through a fog as it relates to markets and the coverage of same – welcome to the August.  Often the slowest month of the year, it often blends into September in a way where it feels like it lasts about 6 weeks instead of 4…just to rub it in.  The haziness, combined with the dreadful lack of really important stuff makes it easy to get frustrated.

But let’s take it all in as the positive upside energy builds under the surface.

“The most important quality for an investor is temperament, not intellect.”

     – Warren Buffett

Good Morning,

The final month of summer haze is upon us.  This stage will go on a little over a month – carrying us through the end of Labor Day week before everyone “really returns” and the cobwebs lift.  Then a race to the Holiday Season will be right around the corner.  And man, what a Holiday Season it is set to be.  No records will survive.  But I am ahead of myself.

First – No Records Left for Q2

When we started this Q2 earnings season a few short weeks ago, the “outlandish” guess at a YOY growth rate was well over 60%.  The bears were growling at the moon suggesting it could never get any higher – and “peak” everything was all that mattered.  What a difference a couple of weeks makes indeed.

Last week we noted for you that the 60%+ number had already surpassed the 70%+ number.  Guess what happened since?

“Individuals who cannot master their emotions are

ill-suited to profit from the investment process.”

~ Benjamin Graham

Good Morning,

Another week – another failed Armageddon.

An idea to share today:  stop watching the garbage called “financial news.”

Seriously.  During the summer haze, it is a great time to learn what helps and what does not help.  Ask yourself this question.  Which “it’s the end of the financial and economic world as we know it” story has been correct over, say, the last 40 years?  And when I say “correct”, I mean which thing that we were told – for certain, by a parade of experts – was indeed the end of the world, with no recovery and new highs ahead.

The answer is – none.  Not a single one was correct for more than a short window of time.  That is a pretty bad record.  As such, why in the world would we keep reacting to it?

“Investing should be more like watching paint dry or watching grass grow.

If you want excitement, take $800 and go to Las Vegas.”

— Paul Samuelson

Good Afternoon,

This week has surely done its job of testing everyone’s patience.  Prices “plunged”, according to CNBC, on Monday – and the day was filled with experts giving all parties lots of reasons for “why it happened.”  Two days later, those reasons seem to have mysteriously been overridden by something else.

As soon as they can figure out how markets returning, basically, to where we started the week is also bad for you – then more will be shared by these experts.

Our Thoughts?

A review of the June morning notes will show that July is almost always choppy after a “big up” in the first half of a year.  This was covered before the Delta variant became the newest reason we are told Covid will never end.  Now, Delta V captures most of the headlines describing why everything “is bad.”

Our message for investors is a little different – it isn’t all bad.

“Never bet on the end of the world, It only happens once.”

~Anonymous

Good Morning,

I owe you an apology – I didn’t get a morning note out all last week due to travel, so I will catch up today.

It wasn’t because little was going on – it was just nothing really important nor anything we hadn’t already covered.

Economic data – better.  Inflation – another false monster.  Earnings – overwhelming analysts.  Delta – the latest scare tactic.

By the way, the 10-year is down to 1.225% this morning – or 81 times earnings.

The title today – “Peak” – will be heard a whole bunch in the next few weeks as earnings flood in.  We recently pointed out that numbers are going to get so shockingly good, that we will likely see “selling the news” even more.  Last week proved that out as well.

“My favorite things in life don’t cost any money.

It’s really clear that the most precious resource we all have is time.”

– Steve Jobs

Good Morning,

The excuse of the day for the red ink and the “sudden” change of direction is apparently related to bond yields.  The experts are all over the media this morning.  They are telling you that it is bad news that rates are falling.  There is a myriad of reasons they are attaching to this “fall” as the triggers of what we should fear next.

“Boy, can you make folks feel what you feel inside?
‘Cause if you’re big star bound let me warn ya, it’s a long, hard ride”

“The Ride” – David Allan Coe

Good Morning,

Thankfully, we still have most of the summer ahead of us.  Comeback records were set on travel this past week.  Expect more – so long as we can take on the media battle with the Delta variant capturing more and more headlines.  There is even a newer one capturing headlines this past weekend.  It is the Lambda variant.  Follow your doctors orders of course – always – but as promised, we can expect that volume to keep getting higher – as more and more head to the beach.  We covered this last week as a likely driver of chop (read: rest) for markets in July.

Idea of benefit:  Focus on the beach  : )

I like today’s quote above.  It comes from a song called “The Ride” and that last line is really what drives home the point.  I have learned a few things in the almost 39 years I have been blessed to serve clients in this profession.  The line in the song sticks with me each time I hear it.  Why?  It seems to me that anything that you will appreciate accomplishing in life, anything that will mean a great deal to you and yours – is, indeed, a long, hard ride.

“Have great hopes and dare to go all out for them. Have great dreams and dare to live them.

Have tremendous expectations and believe in them.”

Norman Vincent Peale

Good Afternoon,

Just a quick note to send you and yours our best wishes for a wonderful, safe, relaxing and Happy 4th of July weekend!

Take in the summer and enjoy much time with family and friends.

When I get a free moment, I am going to ponder how far we have come from a year ago.  What a trip is has been for sure.

I am going to remember how confusing and stressful those first few weeks of the pandemic were.  I am going think back, yes – but only for a brief moment.

I will do so to be excited about how far we have come – together.  I am going to feel pride in how all of us in this country worked together, through thick and thin, to overcome a compelling monster.

As I peer through the haze of the summer ahead and patiently await the next acceleration phase as summer comes to a close, these thoughts will march forth, overcoming all the senseless chatter we must endure:

No matter how hard you punch America, she comes back stronger than before.

No matter what negative force is unleashed upon us, we fight hard to recover and move to higher ground as a team.

No matter how stressful it seems at times – we never, ever – ever – give up.

“The difficulty lies, not in the new ideas, but in escaping from the old ones.”

– John Maynard Keynes

Good Morning,

Well, there you go – the fastest 6 months I can recall in my entire life.  Good Lord time is flying.  Heck, the monsters are even out of breath and seemingly, in recent weeks anyway, cannot keep up with the media calling them on stage for the latest scare.  Shortly, it should be a fun reporting season watching them try to explain away this brand new economy, rapidly expanding earnings and margins – and very young bull market.

Just recall, the new themes are pretty simple:  if it is good, we are not supposed to believe it.  If it is profitable, then you just don’t understand how bad it is yet.  If it goes up in value more than a smidge – it is a bubble and is set to crash down on you – soon.

And – if it keeps going up, well, Armageddon will come knocking.