“The desire to perform all the time is usually a barrier to performing over time.”

– Robert Olstein

Good Morning,

Not sure you have been seeing the theme unfold across the auto industry – but expect it to soon hit others.

How fast are we growing? I’ll tell you:

We are running out of computer chips.

Think about that for just a second.

How in the world could all the garbage in the press actually be true if we are running out of chips? How could it be bad if companies are setting records? How could it be bad if we have never seen the companies of America earn more?

How could it be bad if the national per capita net worth has never been higher? How could it be bad millions if people are saving thousands of dollars in outlay a year by refinancing?

How could it be bad if the very fear everyone runs from is causing that savings to be available?

How could it be? Simple – it isn’t.

I know I sound like a broken record – but The Barbell Economy® is upon us. Its force is just beginning to show up – sort of like a butterfly making its first movement coming out of a cocoon. It is a 25-30 year runway.

Think flying taxis are odd?

Check this – it’s happening everywhere:

Here is a picture of the stock market in 2009-2010.

The mass hysteria then was simple enough: “the market was a complete bubble because the Fed’s QE program had distorted everything, inflation was going to burn us alive and prices had nothing backing them up” after the Great Financial Collapse of 2008-2009.

That was 21,000 points ago:

Notice what was required?

  • Patience for the crowd frenzy to pass
  • An understanding of a much, much larger underlying current pushing us forward

Here is what it looks like in the larger picture now:

The red boxes are the same in both images of the DOW. This is the tough part of this deal: The higher prices rise, the scarier it gets. The bigger the mountain the harder the slide down – or so it seems. The thinner the oxygen, the larger drops feel. Soon – intra-day swoons of 600, 700 or 800 points will be normal.

But they sure won’t feel that way.

Somewhere out there – the DOW will fall 35,000 points from its high (more than traveled in all market history combined) – and it will still be higher than where we are today.

Scary? You bet it is…that’s why so few take the ride.

Long, Long Wave

Forget economics – raise your eyes to the larger horizon, above all the noise where the air is crisp and the clouds are well below you. Think demographics instead.

We can disagree all day long, this year, next year and the year after – about all the demographic data we share with you here. We can disagree that People Make Markets®. But I’ll let you in on a little secret – disagreeing will not change the facts.

These 88MM kids are coming – whether we like it or not. The Boomers and the Ys are a force that must be understood and embraced to gain the benefit of what is ahead in the decades of disruption that we all face.

Many will run, much stress will be felt. Alas, new opportunity always looks that way. New worlds look that way too.

Ours is coming.

An Update to Earnings

They keep getting stronger overall, even as pockets will remain weak. To give you a sense of how much the Q4 growth pace has changed in recent weeks and how good the latest reporting season has been, keep in mind that as recently as mid-December 2020, the consensus estimate was for a decline of -11.2%…it is already in the green YOY – meaning better than where we were in Q4 2019 – before the pandemic: astonishing.

Two Zacks snapshots below:

We now have YOY growth in both earnings and revenues – against the Q4 2019 data – post pandemic and all within the same calendar year. Never bet against America. Never.

It has also continued to influence the expected strength in Q1 2021 data as companies push estimates higher given massive efficiencies being driven by tech. Take a look at the upswing ticking higher each week of releases:

That is a 5 percentage point gain from early December (42% increase in expectations) – and my hunch is they will still be wrong by 70% + when the season arrives in mid-to-late April.

Point? Pray for a correction. Even though it will sting – it will create massive benefits ahead as the spring-loading effect repeats itself.

In Closing

It is understandably difficult and a bit of a mind-game to get your arms wrapped around all of this good news when the media is pouring bad news into your life with a double-barrel firehose.

Sadly, this dichotomy is unlikely to end anytime soon and the stats above prove it for you.

We must all remain diligent and prepared to always stand tall against the storms. Standing apart from the crowd permits one to always be ready to do what most will not.

The largest week in the flood of the earnings season is dead ahead.

Make no mistake: The fear-mongering march will continue as the headlines pounce on anything about a miss here or a miss there – or my favorite, the “Yeah, they did great but can they keep it up?????” syndrome.

Corrections and setbacks serve a role – they build your value for the next run – and we are unlikely to get very many of them in the years ahead.

Even when they hurt in the near-term, they create the gains of the long-term.

Next Steps!

Stay focused on what many will not see. Think above the clouds. Try hard to not get lost in the fog. See the horizon which is far beyond – and vastly more beneficial – than the headlines.

Many storms will still arrive on our shores – and then they will pass.

It is our job to help you remain focused on your pathway. We are more excited about that today than ever before.

  • The future is brighter than currently perceived.
  • The Decades of Disruption ahead carry massive opportunity…

For the prepared, patient and focused long-term investor.

Buckle up and pull that harness tight…this ride is just getting started.

You’re missing out!

Subscribe to Our Morning Notes

Join today to continue reading and receive subscriber-only articles to your inbox with even more financial insights.













      No thanks, I’ll continue reading without signing up.