Wake Me When It Really Gets Tough…
It’s easy to miss the stuff worth looking at in the media while the headlines are dominated by things like the China Trade War, which is a figment of the short-term imagination; a fog in your mirror and a trigger for a reaction.
So, what might have slipped your notice?
Well, plenty, actually:
The snapshot above covers just a few items of good merit.
Oddly, all of this "stuff" was unfolding while the terrible China Trade War raged on in the tweet-world.
Think about it: Just how many consumers do you truly believe will make their daily life decisions based on whether there are tariffs or not?
Do not under-estimate how small these numbers really are, even in worst-case scenarios:
- Max tariff coverage on China goods: $500 Billion in imports
- Max tariff on same: $125 Billion (gasp)
- Size of US Economy: $21 Trillion, give or take $100B
In other words, wake me when it really gets tough.
If you had a stack of cash 21 trillion dollars high, you would be hard pressed to slice out a piece $125 billion dollars high without it looking a bit meagre by comparison on the floor.
My effort here is not to cause distress - or even suggest this is a non-event – but it’s not nearly as problematic as we’re expected to believe from the experts.
After all, the US has already erased 1.2 trillion in dollar value from equities, forcing billions and billions more into the "safety" of the bond world at 2.40% for the next decade.
This is a terrible, emotionally driven error by many that will only be better understood in the perspective of hindsight in about a year or so from now.
The 1981 Redo
Lots of folks fear the future because the kids in line to take over are made out to be so darned lazy.
Heck, do they ever work? I mean seriously, it looks like it’s all just phones, technology, and entertainment.
And they’re killing off stores and retail, right?
Eh, hold on a minute.
Before we get all bent out of shape about the kids, let's look back at the optics on the Baby Boomers when we were taking over the world in the early 1980s, which was right out of the 1970s:
The generation prior likely had little faith that this motley crew would make much of the world after them.
So, let’s allow for the thought that those about to take hold of the economic baton are smarter, way more productive and have technology coming out of their ears.
Imagine Boomers in the 80s with the technological advantage of an iPhone, a laptop, the cloud, an app store, wireless everything, real-time everything else...and Microsoft…
Good Lord what we could have built.
100 Days Ago
You might recall in Q4 of 2018 (about 100 days or so ago) one of the many things we were told was that there were clear signs that the world was ending (again), that real estate sales were soft, and builders were in the dumps.
It was sort of like the replay from a year earlier when retail was dead, and retailers were toast.
It would appear that Generation Y is starting to move out of their parents’ homes.
The (Not So) Bad News?
About 45-55 million of them will do that over the next 3 to 8 years.
Sounds like a lot of stuff will need to be built, produced, created, bought, and sold to accommodate that wave, eh?
The world is changing for the better, fast, and with plenty of problems to solve. And the lifeblood of a solid long-term investment plan is the need, indeed the requirement, for plenty of problems to solve.
Grin and bear it folks - every summer is riddled with reasons for a "summer swoon" so let's just deal with it, accept it, and take it all in as part of the required landscape for the lengthy trek up the mountain ahead.