The Dog Days Of Summer Drone On
Equities start the day higher as the dog days of summer drone on. I’m pretty sure the market has gone nowhere this week (it hasn’t, the past two days have had the smallest intraday range of the year) but that doesn’t change the fact that we are perilously close to new All Time Highs in the S&P. Are you excited? No? Well you should be because this train ain’t stopping for you to get on. The Russell 3000 has already made new highs, the Wilshire 5000 has made new highs, and this is all being done on relatively tame sentiment (AAII Bulls 36%, was 60% back in Jan). Earnings are nearly over and they were the best in 6 years…SIX. Not only that but the next two quarters are expected to have double digit EPS growth so it’s not even over. Hey…you know what all this earnings growth has done to the market? Brought down valuations. That’s right my friends, back to historical norms, so don’t @ me with your dumb CAPE nonsense. But Mike, what about all this Trump trade war / tariff nonsense, you told me it’s sitting on the market? Sure, it’s a thing, and I won’t try and minimize the potential impact of a policy mistake, but for now all it seems to be doing is putting a damper on bullish enthusiasm so I guess we can rate that as a good thing. Yep tweeps, the grind continues, and if it weren’t for Elon Musk this week would be a throwaway in market history. Elon Musk…man….I’ll tell you what…I actually love the guy. Now I’m not an analyst (we have a great one in TSLA) so I’m not making a call on his company, but I think Elon Musk is the kind of person we see rarely in history, the kind of genius maniac who shakes a pizza box or drinks Mouton Rothschild with enchiladas because he wants to do things differently. Check out this piece by Morgan Housel because it’s spot on. “People love the visionary genius side of Musk, but want it to come without the side that operates in his distorted I-don’t-care-about-your-customs version of reality. But I don’t think those two things can’t be separated. They’re the risk-reward tradeoffs of the same personality trait.”
After the open we went absolutely nowhere fast, in fact if I can get 100 words out of this section it would be a miracle of creative writing. The market hasn’t gone anywhere since the open on Tuesday and today was no different. Alright winners and losers let’s go (if you’re one of the CEOs I have on this blog I hope you always read this section, it’s fun to write). CTL gained 13% but it’s been falling for 7 years so take it easy, FLS added 6% on earnings and the stock is dangerously close to breaking a ton of sideways, MTCH +8% because Tinder is still red hot (I was young at the worst time), and WP soared 8.5% because Fintech is the future. The biggest losers were PRGO -10%, WBT -9%, TSLA -4.5% (back below the whole tweet thing), and ELF -37%. ELF Beauty…ever heard of this one? Eyes Lips and Face, also one of the best Christmas movies of all time. Maybe each segment was down 10%? Guys, the lip business sucks right now, maybe we focus on face instead. Meh, chart is a soup sandwich, maybe they need to use this stuff on their 8-K. By lunch we were still going nowhere.
The rest of the day…I mean come on you know what I’m going to say here. Look, it’s early August and people are trying to cram in those last second holidays. There’s no news and I think someone must’ve slapped the phone out of his hand because Musk hasn’t tweeted since the Tuesday thing. We closed at 2,854 down 15 bps with new all-time highs just a hair width away. A watched pot never boils people so go outside and hang with your friends, take your kids for ice cream, sit on a patio and eat burrata, walk barefoot thru the sand with your wife or husband or unicorn or whatever you love and after you do all that write my bosses and tell them I don’t suck.
Final Score: Dow -29bps, S&P500 -14bps, Nasdaq +4bps, Rus2k +24bps
- Succinct Summation of the Day’s events: Here, let me sum up market movement over the last 3 sessions
- This paragraph is amazing, advisors must read: “In a world where informational and analytical edges are fleeting, behavioral edges are the most important advantage available to us. Having a behavioral edge over other investors is far easier said than done. The reason this edge exists is because it’s uncomfortable, counter-intuitive, and sometimes downright painful. It means relentlessly following a financial plan and its corresponding investment portfolio, even when it feels wrong.”
- Batnick has a big ole piece that includes talk about buybacks, pensions, wages, wealth, etc. Click here
- I endorse this wholeheartedly. If this, plus the death of ties, continues to evolve I will celebrate millennials forever. “The rise of the laid-back approach to shaving, most popular among men under the age of 45, is causing some serious problems and strategic readjustments in the razor industry, CNN's Nathaniel Meyersohn reports. "Today, men are not judged negatively when they skip a shave — it is not considered lazy or disrespectful," Massimiliano Menozzi, the vice president of Gillette North America, told CNN.”
- Omg this might be my favorite link of the summer. This History Channel dives into the Battle of Hoth
- An oldie but a goodie where a trader learns a powerful lesson. Turns out this guy covered his short right before the 87 crash…..ouch……: “I concluded that my emotions were my worst enemy in the market and that listening to predictions from gurus and other prominent market forecasters was worse than useless, it was destructive. It also opened my eyes to how early reactions by the media to such momentous events are almost always spectacularly wrong. I still have many of the newspapers and Barron’s from that time, as well as news magazines, etc. re-reading them now shows how any early reaction is also primarily based upon emotions and utterly fails to put anything in correct context”
We’re going to end tonight with something I didn’t think possible. I had heard whispers of this on the wind but never thought I’d live to see the day that someone shot-gunned a bottled beer.
Have a good night