Friday, February 24, 2023

Economic Update (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust: 

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.


  1. Thanks Marty! PWA indicator at -29 is getting interesting. Corporate earnings have been holding up so far. We will see what happen by the end of May. Mike Wilson predicts that the market will bottom by the end of Spring. We will then have a bull market with record high S&P by the end of 2023. I am not sure that the market is that easy to predict. I am more neutral and open for whatever the market thinks it will do. We will have multiple comments (Lorie Logan, Michelle Bowman, and Raphael Bostic) from different people next Friday.

    1. My pleasure Sam! Yes, underlying general conditions are on-balance not good. Wilson's thesis pretty much comports with ours, in terms of where the next leg of the bear market (if there is one) will come from, and that once the necessary shaking out is done, opportunities abound...

      With regard to earnings, always keep in mind that they're expressed in the media in comparison to expectations going in (which were ratcheted down notably), and that they reflect what occurred last quarter...

      One thing not mentioned, but very important to consider, is earnings growth, and in Q4 it was, on balance, a train wreck --- materials -24%, staples -1%, tech -10%, communications -28%, financials -13%, healthcare -6%, utilities -10%... That said, industrials, consumer discretionary, energy and real estate saw positive earnings growth to the tune of 36%, 58%, 24% and 7% respectively... So, not all bad, but we'll say unusually bad, and very much conflicting with the rosy picture some are painting...

    2. GM Marty! Thank you.
      I finally had the chance to read your book "making lemonade" late last night. I have the following summary:

      1. I want to be Jane and not John
      2. Step one: think long-term
      3. Step two: observing your surrounding
      4. If buying stocks at the right time were easy, everyone would be rich.
      5. Charles Merrill of Merrill Lynch wrote an article in Leslie's Weekly magazine called "Mr. Average Investor'' (Merrill is an amazing long-term term investor compared Livermore (I called him a gambler between 1929-1935). Merrill saw it while everyone saw only greed before 1929.)

      I will keep this book as a personal collection and will read it once in a while to refresh my memory.

    3. Very cool Sam! Published that little book 15 years ago, and, as you might have gathered, my view of, and approach to, markets have evolved a bit over the years since... Although many of the basic fundamental principals will forever apply.