Not Quite Shaking in Our Boots
“Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering.” - Yoda
So, there you go.
There are just a few short weeks left in the summer stock market haze and the man from China tells you he is going to "add more tariffs on $75 billion worth of US goods."
I’m not shaking in my boots. Here’s why:
- Grab a napkin and jot this down: ($75B x .25) / $22 Trillion.
- Now let me know how many zeros are to the right of the decimal point (Hint: A lot).
The headlines glaring with large fonts and heated words, making certain that any weak-handed traders with the weekend on their mind will hit that sell button in a heartbeat.
And Fed honcho Powell's speech has exactly zero chance of making anyone happy.
The funny thing about humans is that we’re gifted the power of choice.
We can choose to buy into all this garbage, bathing ourselves in the morbid outcome of every single fear-driving headline, lapping up the "expert" chatter, and incessantly teasing us with what may, could, might, or should happen next.
And all the options are bad.
Or we can choose to focus elsewhere:
This is the LEI Index of leading economic indicators from the Conference Board.
They release it each month in arrears.
The so-called "Trade War" has been going on for many moons now and yet, the LEI is rising, even last month.
Note in the chat, that before a recession - which the media has seemingly decided we are having - whether you like it or agree with it or not - the LEI turns down for a pretty extended period of time.
Now, I suppose the rabid media machine which has come completely unhinged over the last couple of years will likely ignore this data, as it does not fit the fake news of "all is bad and will only get worse" paradigm.
And Up Against That Backdrop…
The summer doldrums have done what they should have done - indeed what they always do - stoked fear, angst, resignation to failure and causing the crowd to succumb, sell and rush into bonds, at a paltry 69 P/E.
Not too shabby friends.
Just as we told you here back in May, those preparing for the summer hauntings and numerous ghost sightings will one day you will be grateful for this latest scare mongering.
But only if you do that toughest thing possible; act differently than the crowd does.
There’s that dirty little secret again.
And What Is the Crowd Doing?
Running away from stocks as fast as they can...
So much for the myth of passive investing.
Sure, it sells well on Wall Street but it doesn’t perform very well under stress.
Here is more sentiment data that should comfort you once the summer haze clears:
And then there’s the Bank of America (BofA) indicator and their stats lurking borderline panic button territory.
The new tariffs should help here too:
This summer holds yet more very good lesson for investors, so don't let them go to waste:
- Fear is the new black.
- Trade ranges do good things for long-term investors. They create doubt, concern, fear, and angst. They cloud the future. They hide the horizon. And they squeeze your mental view. #
Off Track, But Funny
If you spend any time at all watching the imagery the media uses to get your attention on various web portals, then you’re gonna love this.
Now, I’m pretty sure the guy in this snapshot below (easily the most photographed guy on the exchange floor) just goes around, grabs someone's arm and stares frantically into the unseen distance, clearly concerned about whatever he sees.
Never shave that beard, buddy.
OF note, the media also have a stock photo of him smiling but they only use it when the Dow Jones is up 450 points on the day.
One Closing Thought
You are the cost of goods and so is your portfolio.
So, try hard to not listen to this junk we keep getting fed.
Our best days are dead ahead, despite the impending, mind-numbing reports of a "paltry Holiday Shopping Season" that will soon be upon us, with hourly readings from the nations cash registers.
Let's set the record straight now.
This Holiday Season will be the strongest ever, and records will be set in all categories:
They all happened while the “terrible” China Tariff War was underway.
Welcome to the final weeks of Summer Haze of 2019, folks.