“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.

…read ’em and reap

 

That’s correct – nearly 11 million job openings, a number that leaves all other “robust” job markets in the dust.  You are quickly beginning to see who so many larger companies are now helping to pay for college.  The re-fashioning of the jobs market as the global digitalization process accelerates demands more education.  Leading-edge technologies will require leading-edge thinking.

Generation Y will leave every record in the dust

 

The Better News?

Jobs are being filled as claims fall – even while openings are exploding.  Make no mistake – you are witnessing the complete paradigm shift we have been covering for years.  The 2020s and 2030s are the ’80s and ’90s all over again – but this time on steroids

 

Imagine This…

Focus in on what is happening right in front of us.  The crowd remains terrified.

Try very hard to embrace this idea as the haze from summer burns away:

The experts have very little understanding of how large an impact higher margins will have on the bottom line next year.

If you are concerned that all the “efficiencies” have been rung out already – don’t be.

These kids have barely gotten started.

Mind Bender

For those who are long-time readers and clients, you know we help you focus on sentiment at key points in time.  Why is this window of time a key point?

Well, simple:  other than the last 3-4 days, we are sitting at all-time new highs.  It should come as a very positive and supportive surprise to learn that even in a year which is close to setting records for number of new-all-time-highs, the crowd “just ain’t buyin’ it yet”.

The shock and fear of the shutdown has blocked the audience from embracing all of the financial high-water marks being set.  From money in the bank, to margins, to cash flows to profits – records all.

Wait until you see the surprises for Q3 – and the upcoming Holiday Season?  Records for sure.

…read ’em and reap

 

You know what I love about that 38% Bullish reading?  It tells us that 62% of the audience is not bullish.  In a word: incredible.

The summer haze is burning off with some internal chop just as the doctor ordered.  And look how quickly the excitement is being dimmed from a sentiment perspective

 

In the shorter-term, Fear & Greed Index above (including options and VIX activity), notice that we are already back below “a half bullish audience” reading.   Like we suggested earlier in the week – give us a week or two of chop and you are likely to see the 20’s again sooner than you think.  

One can also see this “fear” from a different perspective by watching cash demand.   We tough on it often for you – but here is the latest from the Fed – Trillions sitting in a “rainy-decade-fund” – levels which would be hard to ever drain away

 

In case you might be wondering – this is very good news as a scared audience tends not to push prices hard with rampant buying.  They chase them instead.

You Gotta Laugh

I am always intrigued with the explanations (after the fact) the media provides for market action.  In case one might not have noticed during the summer haze, we are running out of computer chips – no matter how fast we make them.  The average car today has over $6,500 is computer chips in it.  That number is expected to exceed $10,000 per car by 2024.

In other words, from cars to computers to phones, there is no letting up on demand for tech – and chips specifically.  So I am sure you will join me in chuckling a bit over the headline explanation during the red ink on Wednesday for tech shares…and I quote

 

The net reasoning?  Because there are years of runaway demand ahead of us, “outstripping supply” in multiple channels, chip shares were trading down.   LOL

Expect more of that – and pray for a correction.

In Closing

This is that period between the earnings seasons when the useless noise picks up to fill the time on the airwaves.  Our focus?  The unfolding Barbell Economy® all around us.  You think the last few years have gone by fast?  Wait until you get a load of the next 5 years.

Buckle up and tighten those shoulder straps.  Be confident that the ride ahead will include plenty of bumps along the way, each one pushing us further up the mountain as it is resolved.

I know it is hard to stay focused on this at time, but here is the deal:  Our best years are ahead of us.

 

Until we see you again, may your journey be grand

and your legacy significant.