“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%.

Think about it..

 

Mind you – very little has changed, other than getting a little better and yet, investors have decided fear is the “best route.”  Delta?  Afghanistan?  Terrorists?  Masks?  Booster shots?  Delayed reopening?  Sure – plenty to worry about.  But have you noticed yet that as soon as one thing is “fixed” there are six other things to fret over?

It’s hilarious really – and mostly a media farce.  Let’s face it guys:  never forget that America, and all of us together, is pretty good at getting over things.  Betting against that over time has been a fool’s errand – and an extremely poor investment strategy.

Let the “swoon” wash over you like a running stream.  It refreshes, scares the daylights out of the weak hands and sets the stage for the next run of “gosh, that’s not as bad as we thought…”  Recall, we said in May of 2020 – “the most frequently used statement for the next few years will be ‘gosh, that’s not as bad as we thought it would be…'”

Easy to Forget

While many are entranced by the headlines – it is simple to forget that in the last few weeks, records of all kinds have been shattered.  All-time highs have been reached everywhere.  And – forward guidance kept going up when historically, we are accustom to seeing it fall as the next quarter nears.

Here is how Q2 etched its way into the record books

 

More net income than ever seen before – crushing the last record set, 90 days ago

 

Record YOY growth rates, easily surpassing whatever was lost in the shutdown

 

Revenue and earnings growth rates never remotely approached before.  By the way, that 92% growth number highlighted, was only expected to be 61% in early July.  Analysts on Wall Street will be running behind for years.

So…

Let the fear rise.  Let the red ink flow.  Let the panic ripple through all those records.  Let the anesthesia of fear drown that all out in the crowd psyche.

Stay patient and buckle up.  This trek up the mountain ahead has just begun.

Enjoy the rest of your summer. 

It will be 12 months before we get another one – and it too will be filled with monsters – delivered right on time by your friendly media.

 

 

Until we see you again, may your journey be grand

and your legacy significant.