“I will love the light for it shows me the way, yet I will endure the darkness for it shows me the stars.” – Og Mandino

Good Morning,

I know that some of the typed words in the morning notes at times can come across as unfeeling. When comments are made that markets don’t care, they are not designed to suggest we don’t care. Of course we care about the impact of this virus and the crazy, different types of shutdowns going from state to state. It is a topic that has taken on a spectacular political twist so we have chosen to focus on the black and white nature of markets.

That is what will keep investors out of the abyss.

As we speak, there are thousands of investors who cashed out of their long-term plan in March and April of this year…maybe tens of thousands. They permitted fear to completely engulf their outlook. It is understandable – but, sadly, a lesson which has been taught since market records started being kept.

It is pretty basic:

People think “now” – markets think “next”

People think “good or bad” – markets think “better or worse”

It’s a head-spinner for sure at times.

√ Time and patience permit the magical compounding of wealth effect to unfold on your behalf.

√ Fear drives actions which interrupt, permanently, the same magical leverage.

It is happening all around us. Re-read the title of today’s note – Never Doubt America. We are battle tested, rumble ready and we overcome. No doubt we screw things up often. We assuredly get our collective selves into dark corners which seem to stop us – but they don’t. We are living through one of those periods now.

The stage is set for more surprises – good ones – to the upside. You can absolutely assure yourself that the higher up this mountain we climb, the more treacherous and harmful the “setbacks” along the way will feel. As stated often in recent years – the system has been formed to demand that the next monster feel cataclysmic when compared to anything before it.

Laughingly, now, it is somewhat comical to gaze back over the last few years and think about what was the monster of the time – and then what came next. Let’s look back together, yes?

Remember Brexit? LOL Good Lord, you would have thought someone had erased the entire European continent. Very bright people are on tape saying some very dumb things – and perfectly convincingly.

Right before that it was the sheer terror associated with “China letting the yuan fall.” – almost as funny.

Then of course, it was the 2016 “election nightmare” – boy did we out do ourselves this time around huh?

Last year – it is easy to forget that every hour of the day for 365 days straight investors were told – convincingly again – that the most perilous thing to have ever – or would ever – cross our pathway was….The China Tariff War. It was truly the end.

Nope – not really – wouldn’t you agree?

But, we can now see that those “dosings of small Armageddons” were really there just to set the platform for the mother of all world-ending scenarios:

a global pandemic.

Friends, we are going to get through this…we can be confident of that together. As you may have noticed, the market and the economy have already – basically – done so. Please do not make the mistake of tying in political views and “Fed money printing” promos, into the aspect of what the economy will do.

Hundreds of thousands of investors – in March 2009 – were so incensed that the Fed was “endlessly printing money” that they refused to support it by risking their “money” in the markets anymore. The DOW was roughly 6,700 at the time. About the same multiple of change is likely – when we peer back into the fog of the past, eleven years from now.

√ Thank The Lord that the world will be an even more incredible place of opportunity, then. 

Patience friends – and pray for a correction….many of them even, along the way.

Read ’em and Reap

Lots of things showing recovery is coming on strong. Don’t be surprised if we see a couple back-to-backers of annual returns in the double-digit realm – maybe more than back-to-back even:

Notice that the annual return a year ahead tends to improve, the broader the rally gets – and we are seeing just that as NOV really lit the torch of seeing through this fog and into the new US economy ahead.

Let’s Dig Under The Media Fear

We saw earlier in the week how strong Manufacturing is returning to the US with orders books and extremely positive backlogs.

Here is another extreme we have been suggesting you count on for years…we are running out of houses to buy – and the builders are plum filled up with demand…for many years to come:

Notice the term “Off The Charts” really is not an overstatement here. And this cycle is just getting started!

√ Recall that way back in the dark period of March 2009, the culprit was deemed real estate – and I’m quoting the experts: “We will never sell all the homes we have available….” LOL

√ Try running up to Home Depot and grabbing a replacement refrigerator. You will wait months. Expect more filled pipelines of demand for years and years and years.

And guess what? New data out just this morning confirms the theme: this game is just getting started.

Take heed…this isn’t your Dad’s housing market anymore:

Industrial output recovery is real…order backlogs at records:

Stunning….

Do not underestimate the elements unfolding in the US economy. They are being hidden from most observers by rampant and terrifying media headlines. Change is happening so fast it can be a blur.

This is good friends. No, let me take that up a notch – we feel this is great.

Demogronomics® suggests – as stated for years – that the runway of opportunities ahead is long – and profitable. But not without volatility and the required patience to withstand stress and rapid change at times.

√ Again – pray for a correction.

√ Dips are your friend – don’t forget.

In Summary

Take a new perspective and expect that the Grim Reaper will never rest. We all know that media revenues would plummet if he did.

Don’t fret…stand tall in the storm – and look forward, above the noise – not back and into the fog-shrouded dust heap of the past.

This rocket-ship ride is just getting fueled up for the trip – even now in the midst of all of this…we are set for collective good years together like none in history – no matter the politics of it all.

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 future unfolds.

The media will do their best to knock you off your focus, grabbing at your fears, stabbing at the ghosts in the back of one’s mind and working to take you off your pathway.

Focus your mind on rising above this tension and angst instead – as we all succeed together…

It is set in stone with The Barbell Economy®.

Pull your seatbelt tighter and hold on to your popcorn.

Exciting things are dead ahead.

Enjoy The Rest of Your Week – The Holidays Begin Next Week

Please Stay Safe & Healthy

We are here to help always, even if just to talk.

Until we see you again, may your journey be grand – and your legacy significant.