Friday, June 16, 2023

Economic Update: Inflation, Consumers, Consumption, Cars, Yada Yada (video)

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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! You are right on the money when you predicted the CPI report this week. I listened to the biggest Bull (Tom Lee) about expansion and the biggest Bear (Mike Wilson) about earnings recession. Both of them have their own opinions. Time will tell who is right. But one thing is for sure, things are looking shaky by the days. New Zealand's economy just slips into recession this week. Xi from China is desperately wanting foreign investors to invest in China after 3 years of shut down (his stimulus plan is kicking in high gear). Bank of Japan just kept their yield curve control unchanged due to inflation uncertainties. US economy is holding up so far because of robust consumer spending. Who knows how consumers will react with so many uncertainties in the horizon? Tech companies rally not just because of IA, but because they were ahead of the curve with their earnings when they laid off many of their talents at the end of 2022. I continue to be amaze of the equity market on a daily basis. Extreme greed definitely plays a big factor in powering the market to the moon.
    Marty: thanks for continuing these weekly updates. I find the information that you provided is very informative. Take care. Have a great weekend!

    1. Always my pleasure Sam! and thanks... It's been a long time since I've listened to Tom Lee, but, back then, I don't recall him ever having a bearish (even a cautious) view on the market... Mike Wilson, on the other hand, will make both bullish and bearish assertions based on how he and his team interpret the overall setup... Wilson is far more thoughtful, and objective, and worth listening to, in my humble opinion.

      Ironically, Tom Lee will for sure turn out to be "right," eventually... Whether or not we have an earnings recession and second leg lower (as Wilson predicts) in the meantime remains to be seen.

      In our view, as I continue to stress herein, the risk that Wilson is correct is significant enough to hedge right here... Whether or not he turns out to be right, frankly, really doesn't matter (you can hedge and still make money)... He's 100% right in advising caution, given the macro setup... It's like the blizzard analogy I've been using herein recently:

      When, for example, there's a 50% chance of a blizzard over a given time period, and at a certain altitude, you simply don't go hiking up there until the forecast clears... Whether the blizzard occurs in the meantime means absolutely nothing... Even if it doesn't snow, not hiking up there (given the risk in the forecast) was 100% the right decision... And if one stays consistent and always makes such thoughtful decisions, the odds of one ever going broke are greatly reduced... As, make no mistake, there will be financial blizzards that will materialize in our future; whether or not one occurs in the coming months remains to be seen, but, as we continue to point out, odds are such that prudence is presently warranted.

      As for the "permas"... be they permabulls or permabears... I'm thinking it's simply their personal business plan... The media always needs both... and they like to know who they can count on...

      Have a great weekend my friend!