Market Blessings in Disguise
Is anyone else as shocked as I am to note that in a few short days, the first quarter of 2017 will be in the books?
Time is flying by, and while I'm not all that certain many people are having fun yet, for those investors focused on the Barbell Economy this could be a blessing in disguise.
Last week's AAII sentiment stats (released on Thursday) showed a paltry improvement in bullish sentiment, from 30 to 31-ish.
Note how the chart below shows a pretty stark reality. Looking right to left you can see we’re in about the same spot as this reading showed less than three weeks after the lows of March 2009 (see the red dots).
Just a thought - Thank your lucky stars that the masses are still petrified of any red ink lasting more than a few days.
After you do that - pray for a correction.
I know this gets pretty monotonous in a world that seems to need new data every millisecond, but records have been set again in the area of US household net worth.
You see the breakdown for this in chart below.
And in the rush to make sure the Trump Presidency is by far the most attacked in the media ever, these positive morsels of information are unlikely to show up anywhere anytime soon.
I would also bring your attention to the rate of recovery in US real estate values, along with the idea that this is not built on a big pile of debt; no matter what the naysayers might suggest.
Notice how the levels of debt (in purple on the chart) have remained relatively steady since the 2008-2009 debacle, even as assets recovered.
Data on Friday also showed that we beat expectations again on the Philly Fed numbers - even though a retreat from the previous big spike was expected.
The actual decline was smaller at 10.5 points, bringing the index down to 32.8. To keep this in a healthy perspective, outside of last month's blowout reading the current level would still have been the highest reading since November 2014.
So just keep in mind that while the press continues to attack every twitch or syllable that comes out from the Trump administration, know that while we were becoming fearful of everything that terrifies us today the market rose 20 times over from 1982.
Be patient, stay vigilant and ignore the noise.
The fear is a blessing in disguise.