Market Update - Glass Half Full
The reason I want to touch base with you, I want to ask you a question. How many of you go out there on a weekly or maybe even a monthly basis and get your home appraised on a regular, regular interval? Do you do that? No.
Why not? Well, because again, what difference does it make unless I’m selling my home? What do I need to know what the current value is on any given day? Right. So, therefore, if my house and again, most likely itis down from where it was even 30, or 60, 90days ago when the housing market was at its peak, someone told me,
Hey, Dave, your house is worth $40,000 less today than it was three months ago. What, is that going to change my emotions for the day? I’m going to start treating people mean or something like that? No. Absolutely not nor on the other hand, if they said it was up $50,000, but I feel that way, what am I getting to? And my point is we have said, just like we did back in April, if you go back and look at my website, which I’ve got attached here, you’ll see that we said back in April this year that we had gone to about a 40-50 % cash position.
There was a plan behind that because we knew, and you had to be kind of not paying attention, that interest rates were going to be on the rise, inflation was going rise, and therefore, we felt as if we were going to be in a better position to be in cash around 50% of our portfolio than where we’ve ever been in 40 years of being a registered investment advisory firm. So that’s where we moved to with the idea that about August, or September, we would begin to dip our toe back into the water, buying up companies that have gotten beaten down, not based on the fundamentals and technicals, but basically just gotten beaten down because of what’s going on with the supply chain issues. With interest rates rising, the cost of doing business has just gotten out of hand.
So, we see a CPI number come out this morning that went from about 8.2 percent last month down to I think 7.9 or 7.8 this morning just a tiny move but what I’m showing you is that any good news is what the market is looking for and that’s why you’re seeing the reaction today you’re seeing all this green over here on the screen okay now when we continue to get good news I believe without a shadow of a doubt the 40 years that I’ve been doing that the market. They’re going to tighten their belts because they want earnings for their investors right so that’s why yesterday when the market was down 600 points on the Dow that matter was the only thing that was up yesterday and again stands up huge today so these are just small examples of what we’re trying to explain to you that when you see days like this don’t get all excited thinking this is going to continue we’re in that turn right now but it’s an indication of what’s to come My phone doesn’t ring on days like today because the market is up, but emotionally, I’ll get a couple calls when people say, “Dave, what’s going on in the world? The sky’s falling; it’s coming to an end,” but they never call me on days like today anyway. I just wanted to touch base with you to put things into perspective a little bit and hopefully set your day off better in the future.