“I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy.” –Warren Buffett

Good Afternoon,

It is weeks like this one that make that Warren Buffett quote above so easy to see but also so very hard to live by. On the way up this mountain toward long-term goals, the ugly parts never feel good. Of course, that’s why so few get through the entire journey.

We are living in an incredible time. So much change. So much damage. So much to repair, make better and overcome. It is those very elements which tell you how great the future opportunity has become.

The spring-loading effect is unfolding as you read these words. It’s ugly and beautiful at the same time. It is painful and exciting all at once. It is sharp – and it is what separates the trader from the investor.

While we are watching the “election prep” fear roil the markets – and the media is happy to help you jump off that ledge – solid events which define a better future are unfolding.

…read ’em and reap…

The GDP was only up 33% annualized over the last 90 days. That does not make up entirely for the 2nd quarter shutdown plunge – but it takes back an awful lot more than almost anyone imagined.

Confidence and manufacturing continue to steadily trek back up the mountain as well:

I have a hunch the confidence boost on the consumer side was becuase income was better than expected as well:

Under the “bad news is good news” category, the press wants you to believe bad things are going on in housing.

They are right –we are running out of homes to sell– hence fewer closings of New Homes – until you build more of them. LOL

Note the YOY increase is hidden in there (under the bad news headline)…up 27% from last year…incredible.

And Yet -Fear Reigns Supreme

The red ink this week – covered often as a likely candidate before the election vitriol was completely spent has done exactly what one would a) expect and b) prefer.

Scared the crap out of everyone.

Once again, the indicators – and the crowd’s emotions – are falling right in line. The latest AAII data came in right before the last two ugly days – but even then, it remained paltry – with 2/3’s of the audience having no desire to own stocks…

I’d say “almost perfect” –but that is between you and me…

Meanwhile – the earnings season flood continues – and the beats keep coming.

So look – we all know the bad stuff. We are inundated with it 24-hours-a-day. The strong-minded, disciplined and patient investor pays a steady focus on the higher horizon ahead. Standing tall in the storms is imperative in meeting long-term goals, even when it hurts sometimes.

Let’s Not Forget the Good Stuff

ISM’s solid

Manufacturing solid

Supply chains coming back to the US

Business openings exploding

Small business optimism and forward-looking hiring plans

Auto production fully recovered

Tech washing over every sector of the market

Earnings and Margins set to shock people a year or so down the road

Massive cash levels serve as future fuel at higher prices

Generation Y just beginning to buy homes – with 20 more years of that to go…

Look for increasing family formations and marriages as the next stage

…in essence – the US economy, thanks to all of us collectively never quitting – is nearly completely off the leash.

I know that sounds like rose-colored-glasses type thinking. We try hard to have clients think in very long-term perspectives…beyond the chop and waves on the surface.

Let everyone else be thrown off their pathway – you can stay on yours.

Alas, one gains confidence by studying the underlying dominos falling our way…set for years and years to come.

In Summary

The Grim Reaper will keep coming. Don’t fret…bring it on.

When he knocks on the door of your mind and stokes your fears — laugh at him and look forward – not back.

This rocket-ship ride is just getting loaded up for the trip.

Long-term investors have learned that when all of the above ingredients are baked into the pie, the road ahead has been marked by a clear and resounding message:

…surprises to the upside.

It is our job to withstand the assured storms ahead and be disciplined in our planning for clients’ goals.

Sure, more choppy waters are likely as the earnings season unfolds ahead. Oh – and we have that election thing too.

The media will do their best to knock you off your focus, grabbing at your fears and taking you off your pathway. Most especially with the hatred they have collectively dialed up as we head into the most-covered election ever.

Focus your mind on rising above this tension and angst.

Pull your seatbelt tighter and hold on to your popcorn.

Exciting things are dead ahead.