Looking back is important in this business.

It’s those difficult time periods in the rearview mirror - the windows of stress, angst, and disorder - where you find hidden blessings unfolding and incredible opportunities being birthed.

They’re much harder to spot in the present.

That’s why so few are able to stay strong, focused, and patient.

Investing and building wealth is not easy. And the difficult periods are what create our future returns BECAUSE of how most people react when they arrive.

Stress is a money-maker, if you know how to handle it.

So Here We Are

The hour is upon us.  

The final camera shots of massive flags waving in the breeze are gone as the campaign closes during the early hours this morning.  

Now we wait.

Or better still, we focus on what’s next…just like the markets do:

It would be easy to overlook just how quickly the manufacturing base of America is recovering.  

The media will want you to focus on our flaws.  I suggest long-term investors focus on the budding roses in the garden, not the thorns.

The ISM and PMI data above are both solid, improving, beating expectations, and suggest 2021 is set to be surprisingly strong.

There's More...

In case you don't see the footsteps in the sand, notice there is a reason we are running out of homes to sell.  

Over the next decade roughly 50 million kids will leave their homes and look for their own.

Just like the Boomers arrived in the early 80s, this wave of people will not stop anytime soon:

Why is this important?

It’s simples!

Supply is down to record lows, which easily explains the record positive sentiment coming from builders (snapshot below in red).  

They have a whole lot of building to do – to catch up on - at least for the next decade:

Earnings Season?

Earnings continue to steamroll expectations. 

Analysts are more behind now than they were coming out of the Great Financial Recession in March 2009 (and that only took them 10 years to catch up). 

Beat rates and guidance raises are both shattering records:

Now, how does the above compare to history?

Well, it actually looks excellent for long-term investors:

The stats are impressive: 

The forward 4-qtr estimate this week rose to $158.32 from last week's $157.10.  Remember, once Q4 data rolls over at year-end and you have a full 2021 look forward.

These numbers are set to be in excess of $168.00.

While the current forward PE fell to 20.6x last week, the 2021 data show a P/E of closer to 19. 

In a world of 87 basis point 10-year bonds, the opportunity spread is incredible.  

Note:  when looking at S&P 500 revenue data, there is (so far) an 80% "upside surprise" (or beat rate, per Refinitiv data) for the S&P 500 components that have reported 3rd quarter 2020 revenue (about 60% of the index).

Everyone is always focused on EPS strength (or lack thereof), but revenue strength and revenue upside are even better for the long run.

Facts can be wonderful for stress when you’re a long-term investor. 

Leave the short-term folks to get their tension from the TV news.