Wait What?

Every now and then things happen in the World that blow my mind. While each one may not be enough to fill an entire blog post I do think they are worthy of a listicle so let’s dive in to a few things that have me scratching my head while I sit in my fluorescent lit, Ikea inspired office, sipping a grande half ice, half caf, one pump vanilla, ¼ chai, “give me strength to get thru the day” latte.

  1. TSLA. Yep, a car company people love to hate on (and almost no one actually owns) is worth a gajillion dollars as its stock goes parabolic (Baird rates neutral). My entire TWTR timeline is filled with people posting crazy stats about the market cap and how it reminds them of a mania they only read about in a book. Look, here’s the thing, stocks do crazy things from time to time, it’s just part of the whole deal. In 2008 Volkswagen was the biggest company in the world after an epic short squeeze. When will it end? Who knows but the last few times we’ve seen action like this (BYND, TLRY) it occurred close to a short term market peak (@hmeisler did a thread on this here. Credit where credit is due). 
  2. Io-what?  I know you are reading a lot of headlines about the Iowa caucuses but I want you to remember that the election process in the United States is a long road full of twists and turns and it’s way too early for the market to make sense of who the front runners are. As such, the events of last night might make for good political fodder but it makes for almost no market fodder. Always try to separate the signal from the noise when it comes to your money.
  3. Super Bowl Ads – I love Super bowl ads, who wouldn’t wanna watch millions of dollars of creativity jammed into 30 second. So there I was googling “Best Superbowl ads” on Monday excited to see what I missed.  As I clicked the first ad I had to sit thru a different ad to watch an ad. ARRGHGHHH. Come on man (Bill Murray had the best one).
  4. China - No one knows what the final impact of the Coronavirus will be but how crazy is it that we are basically shutting off the Worlds 2nd largest economy? Airlines, borders, rail traffic, all of it is trending towards zero. Strategists sit around looking at technicals and sentiment and economic data but there are NO MODELS that account for sealing off China from the World.  Especially painful as we are seeing a bounce in manufacturing data.   
  5. 1917 - is the favorite to win Best Picture? Really? I love a good War movie, and this one has brilliant cinematography, but the plot is paper thin with very few memorable moments. It should probably be Parasite or Joker.   
  6. The Fed – The Fed is not driving the stock market, the Fed does not have a plunge protection team, The Fed is not the illuminati. Don’t fall prey to hucksters and doomsayers who say the Fed is engaged in “forever QE.”  Yes, the Fed can help create conditions that are beneficial to stocks, their mandate is to ensure full employment and low inflation, but if we boil it down a stock market is composed of two things:  corporate earnings and what people are willing to pay for them. That’s it. Here’s a look at corporate earnings and the price of the S&P500.

Ok, I’ve rambled long enough, 2020 is off to a wild start but you know what? So be it, may you live in interesting times.