“Train yourself to let go of everything you fear to lose.”
Before we get to the chop of the last few weeks – which likely has a bit more to go still – let’s step back and recognize what is unfolding around us. It is very, very easy to be lulled into a hazy sleep with all of the issues unfolding around us. Getting lost in vaccine updates, case counts and closures or openings, triggers the mind to ignore (or entirely miss) the larger events.
And yet, what we have been describing for years is unfolding at breakneck speed. The fact that it is just beginning gives one a sense of a) how much change will unfold in the years ahead and b) the magnitude of the significant and life-changing events on the horizon.
It is a short clip on a drone taxi company funded by the LinkedIn founder and “in the works” for the last decade. Yes – decade.
Soon it will fly you around like an Uber currently drives you.
Years from now (far fewer than you may think), you may find you own a few of these “drones” as income producers. They don’t use gas. They run on software and GPS. They answer to an app and they take no lunch breaks, water breaks or vacations.
They buzz around 24 hours a day, 365 days a year. Just imagine the income stream at $30 a pop.
I digress. The point – big, massive, hard-to-define changes are dead ahead. And they are heading toward us at lightening speed…sure to shock the senses of most who will be unprepared.
To give you further sense of how unprepared, please do yourself a favor – and anyone you care about: watch the video here. It is the story of Elon Musk and SpaceX. We stand by our thoughts shared before. Elon will change more with SpaceX than he will ever change with Tesla….and he will change a lot with Tesla.
The VERY important key to each of the videos above is to pay attention to the background happening behind the focal point. You will find one thing: Kids – young people – not older people – not stuffy offices – not anyone else but young, creative, technologically raised kids – Generation Y is coming….like it or not.
At several points in the SpaceX video, I was touched by how emotional Elon became. We might all want to consider that in order to understand just how staggeringly positive life will become in the decades ahead.
Never. Bet. Against. America. Never. Never. Never.
The SpaceX video also sends another message: Never Give Up. Always Focus Forward.
Back to Good Old Today
The markets have most assuredly been choppy for a couple weeks as a record-breaking earnings season has come to a close.
As the earnings season began in the third week of January – we voiced a mild concern that it does not often help to “rally into an earnings season…” as it sets the stage for “yeah, right, we expected them to be good numbers….”
And indeed, one would easily argue now that this is nearly exactly what we have watched:
The snapshot above is the SP 500 Index with areas boxed in since earnings season kicked off. Yes – you do prefer to see weakness into an earnings season — and don’t fret, the next one is just a little over 6 weeks away. Hence, chop for another couple weeks would be a good thing – not something to be afraid of.
Notice the boxes help you separate the noise – as we have witnessed the markets basically go back and forth over the same general 5% range in the S&P 500 – just a couple percent below all time highs. <–the latter being the most important point for you.
The Street is Sensing an Awakening
The themes noted in the above bullet points are something which will not be new to readers. Indeed, they may even sound boring as much as we have talked about this in recent years.
A new monster is birthing itself from all the “good news.” Interest rate “surges” all the way back to 1.5%. I chuckle even as I type when I think of the various “taper tantrums” along the way as the markets have climbed thousands and thousands of points over the years. That was parallel to all those tantrums.
The current rate increase is what we suggest is impulse in nature. The monster of inflation will be illusive. Yes, it will appear to “spike” as oil bounces, factories fill, supplies are drained and supply chains are stretched.
Then, as that burns away and the massive investment into tech (deflationary) takes hold over several quarters, we will see rates fall again and the lack of inflation be the then newest fear.
The future 40 years will look a lot like the last 40 years from several perspectives: We will have an avalanche of bad news. We will have wave after wave of terrible events, natural and man-made. Think about it for a moment. In the last 40 years we have seen (just a small partial highlight list of “terribles”):
- 6 Former Presidents and Administrations
- A 7th is just beginning (You may recall that all 7 elections were the most important one of our lives)
- Three recessions
- Two banking crises and real estate collapses
- One Great Recession
- Multiple Natural Disasters – all horrible
- Geo-Political Nightmares too numerous to count
- Flood, hurricanes, tsumanis, earthquakes, volcanic eruptions
- Terrorist attacks
- Multiple Wars
- The collapse of Greece
- Constant Middle East Unrest
- Brexit, Brexit, Brexit and Brexit
- China Tariff Wars
The good news? Well, we have apparently vanquished the flu.
Here is the point…all of that and much, much more has happened in the last 40 years. And during that time, we witnessed the DOW rise from 800 to over 31,000, currently sitting about 3% below all-time-high records.
The next 40 years will generally be the same.
The question we all face is relatively simple:
Do we pay attention to the disasters assured to be present along the way?
Or, do we stay focused on the positive horizon, always moving forward, always fixing, repairing, learning, striving, improving, overcoming and mending?
Chop is here – and we will find ourselves working through that over the next few weeks. Its result? New doubts, new fears, new monsters, new platform built for the next leg up as the spring dawns and the US builds into its already underway “new normal.”
So what now? Buckle up. The pace of change is going to be head-spinning – with plenty of gut-wrenching interruptions along the way.
Get comfortable with this process…it will be with us – forever:
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.
Yes, I know some of this is repetitive. Building muscle requires the same actions on a regular basis. Without them – atrophy sets in and it become easy to get caught up by swayed emotions. That becomes an even simpler trip-wire to trigger as prices trudge higher and higher up this very long mountain pathway we are on ahead.
The mind-game is even tougher to get your arms wrapped around 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.
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.