I haven’t updated my blog in a while, so here are some random market thoughts (in no particular order):
1) This is a very strong, liquidity-driven market. We’re not that smart. I constantly remind my Educational Members that this is a rare time in history. I’m certainly not complaining about it. I’m just reminding people to keep a level head. Take advantage of it, keep things in perspective, take some profits along the way, but keep your emotions in check.
2) If you’re struggling this year, don’t beat yourself up. If you own a concentrated group of growth stocks, you most likely did very well last year, but many of those stocks have been consolidating this year. Just look at the Ark Innovation ETF (symbol: ARKK). It is currently down year-to-date after a strong year in 2020.
3) We are currently in one of the seasonally strongest times of the year (Nov-Jan). Keep your mind strong and focus on the best leaders out there. You don’t take Lebron James out in the 4th quarter and substitute him with a lesser player. If you don’t know what some of the leaders are, then you are not paying attention.
4) If you are new to the market, don’t forget that it corrects. Although I’m expecting continued strength into year-end, please keep in mind that we will see a normal correction next year. Don’t forget about February of this year when many growth stocks corrected 20-50%. It will happen again.
5) If you’re confused by valuations, you are not adjusting for the low interest rate environment, and the expanding profit margins (which are at multi-year highs). I’m not an economist, nor do I care to overthink the Macro picture. I simply use the technicals to guide me and follow what the big institutions are doing. After all, they control the market.
6) Under their current leadership, the Fed will never raise rates again in our lifetime. They can’t. They might say that they will (like they did in Oct 2018), and the market will correct (like it did in Q4 2018) because of all the deleveraging that will need to take place, and then they will say “just kidding” (like they did in Jan 2019).
7) The Fed does not have a dual mandate of stable prices and maximum employment. They only care about one thing: The Stock Market. They are the stock market’s bitch. Yes, I said it and I’ll say it again. If the market drops significantly next year, they will increase their bond buying again. I agree this whole thing is laughable, but I don’t care. Like I said earlier, take advantage of it, but keep a level head.
If you’re looking for regular analysis on the market as well as strong stock ideas, here’s the link to my Educational Product. I’ve received great feedback from the members and I’m confident you will learn a great deal when you sign up!
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