Newsletter

News reports claim that Canada and the U.S. have abandoned the search for downed floating objects.  Apparently, the governments are comfortable that they may never have an

An article in today’s WSJ notes that nearly 2/3 of professional economists predict recession in 2023. This has basically never happened before.

Consumer discretionary stocks have bounced 20% in two months but we’re still hearing companies are expecting mid-single-digit inflation next year, suggesting higher rates and implying risk to the economy and stock prices. We’re remaining with our investment strategy.

Equity prices bounced in October but have slumped to start November.  The S&P 500 is down 20% over the past 12 months and the Nasdaq is off 34%.  Jerome Powell and his not-so-merry band at the Fed signaled their continuing hostility to equity prices by raising rates last week and their intention to keep going.   

Negative Sentiment and Lower Prices Meet a Positive Signal

Friday’s stock swoon argues investors have more work to do to understand the scope and duration of higher interest rates. Run away? We discuss how we’re investing in this climate.

In our opinion, some of the conditions for the market to bottom are in place. We discuss the signal we think is important and has yet to be triggered in our July letter.

Our contrarian suggestion is that demand destruction is already well underway, which should be expected to contribute to lower inflationary pressures and ultimately be positive for stocks.

The market fears recession is imminent, should you sell now?

Analysts and economists are convinced that Fed rate hikes are sending us into a recession. Meanwhile, every retailer and restaurant company we know is hiring as fast as possible. Who is going to be wrong?