There Ought to be Clowns…
“Don't you love farce? My fault, I fear,
I thought that you'd want what I want,
Sorry, my dear!”
Judy Collins, Send in the Clowns
Historically speaking, we can be confident that those following the guidance of Wall Street analysts do not yet have a good feel for how the stock market’s machinery works.
And if all goes as it usually does, the "expert" crowd will once again appear very much like the non-expert crowd that it’s supposed to be serving: behind the curve.
The evidence from the 2008/09 debacle, when orders came down from the higher-ups instructing analysts to continue to spread the word "never get out over your skis again" during the run up to the crash, saw them looking awfully foolish thereafter.
Hmmm…how many clowns did they fit in that car?
Expect that process to repeat for decades to come.
So, how far off were they in this first post-shutdown earnings season?
In a word: very.
This is good news for those who can see the Wall Street forest for the trees:
Let your eyes work backwards from right to left from the 76% bar, and then check when it was higher than it is now.
Oh, wait. It hasn’t been. They should put a red nose on top of it!
Now, consider what the chart below is suggesting:
In the midst of the government shutdown – an environment for which there is no precedent from an investment and wealth management perspective - companies raising guidance are vastly outrunning those who are lowering it.
I have two words for this: technology and technology.
The tectonic shift is underway, folks.
The New Economy is forming right before us.
Sure, things will be different, and some of those things will be vastly different. But suggesting we won't win that battle and successfully rise to new heights has always been a bad bet.
The best news of all?
Wait until you get a load of the monster coming after this one. Good Lord! It will make this last six months look like a summer camp.
And if it doesn't, you won't pay attention, the media addiction will fail, their revenues will fall, and the world will become a better place.
In the New Economy ahead, the long-term investor who can remain more focused on opportunity than peril, even as they live through that peril, will win.
It's a tough game but that’s why they never called investing "fun."
While tech sectors could sure use a corrective wave to spook even the small percentage of bullish investors away, I suspect setbacks will be short-lived, with $18+ Trillion sitting in US bank accounts (see Calafia Beach Pundit’s Fed Data below) how and 10-year bonds are selling at 145 times earnings.
Yep, the world and our entire economy is changing forever, and every single thing will become new again.
And if the 1980s and 1990s were the Boomer's Decades, then the 2020s and 2030s are the Generation Y Decades.
The rocket-ship driving that expansion will be “everything tech,” including stuff we’ve not even dreamed of yet.