Market Wisdom From Monty Python
Equities start the day flat and I think it’s time to revisit a movie classic so I can make a point. In April of 1975 Monty Python’s Holy Grail debuted to little fanfare but as time passed and its comedy aged like a fine Bordeaux it would end up on many “Greatest Comedy of All Time” lists. John Cleese, Graham Chapman, Terry Gilliam, Michael Palin, just a who’s who of funny Brits. It was a movie that heavily satirized Arthurian legend and included such classic scenes as a bunny wreaking havoc on a group of adventurers and a Knight who never quits. In one of funniest parts an undertaker is moving from dirt hovel to dirt hovel telling people to “bring out your dead” . A guy slings what must be his father over his shoulder and tries to dump him on the pile all while the poor gentlemen protests his fate. “I’m not dead yet…I feel fine….I feel happy.” You know what this poor beleaguered soul reminds me of? The US Economy. We keep trying to dump this expansion on the death cart of history all while it silently murmurs “I’m not dead, stop it”. Q2 GDP, as measured by the Atlanta Fed’s GDP Now debuted around 1.5%, fell below 1%, and we were practically burying it in a mausoleum. How often have people called for the end of not only the economy but of the stock market? Is it 50? 100? Ironically, after a slew of decent economic data last week, GDP Now ticked up to 2.1%. That’s right, exactly where we’ve been for years. I’m sure you’ve heard the term “muddle thru” but it has been, as always will be, the best description of the post Financial Crisis period. Economic growth keeps muddling thru (as Perma Bears lead people astray) and that’s been enough for the stock market to have one of its best runs in history. At the end of the scene they club the poor guy in the head and drop him on the pile finally ending his protestations. Will that club be Tariffs? A Trade War? A policy mistake? A good ole fashioned economic slowdown? None of us know but for now we’re not dead yet.
Wow that first paragraph ended up a bit long didn’t it? Luckily absolutely nothing happened today. Since there’s a Fed meeting on Wednesday, and the Fed is all the rage nowadays, the market went nowhere on no volume (about 20% below a 30 day avg…yikes). Hey, dear reader, Vanguard had a really cool study on “How America Saves” that’s worth your time (its long though). I liked this graphic which shows the % of allocations to equities by age. I’m heartened by the fact that this number has consistently risen for those under age 30, in fact I wrote a piece to my millennial friends urging them to do something similar (you can read it here). You’re doing great guys, I’m excited to see what you can accomplish, just know that your boy Mike is here to help out whenever you need something answered like “why does Wall St have to use so many complicated terms” or “why do people eat bone in wings when boneless is so much better” or “what finance book should I read as a 25yr old” (this one). I got your back, like and subscribe!
So yea, the death of the economy and the bull market have been greatly exaggerated for years now. Let’s have @StrategasRP weigh in here with one of their wonderful charts from today (thanks Jason and Ryan). Here is their Bull Market Top Checklist and if I’m reading this thing right (I’d like to think I am) then the real trouble looks to be a ways off. Frankly I’d love it if people keep calling top and worrying about the death of our economy, we want that Wall of Worry to be a mile high. In fact some argue that an end to the Trade War would be a “sell the news event” because it chips away a huge brick in it. Anyway, everyone is waiting for the Fed on Wednesday so don’t expect much action until then. Relax, have a cream soda (can you name the movie?)
- Morgan Housel, who I basically revere at this point, nails it when it comes to public speaking (I aim to do this in front of our clients): No one wants a lecture. But everyone likes stories. You can put lecture-like material into a story, but without a story you’ll lose people’s attention after a few minutes. Someone can reread a paragraph, or rewind a video. But a live talk is a one-shot deal where the audience probably isn’t even taking notes. They have to understand the topic instantly. And stories are the easiest way to quickly contextualize complicated topics. This is as true after a talk as it is during a talk. Dump a bunch of numbers on someone and they’ll forget them before they walk out of a room; tell them a story with those numbers and they may remember it years later
- Ok, so you’re bearish and think a recession is coming sooner rather than later, Barry says to do these things: Since we can all agree that another recession is inevitable, I am going to go out on a limb and suggest that now is the time to plan for it. Maybe these will help you get through relatively unscathed
- This is an incredible story about parents watching one of their kids struggle with depression. Must read.
- Is this a cool item? I’m leaning towards it being cool and wanting to buy it but it’s $299.
- Yo…YOOOOOOOOOO these look SO GOOD. Someone make these and report back
- Cullen is thinking about 3 charts (the forecasting one is painful)
- Factoid of the day: American Pie is the longest song ever to reach #1 on the charts, 8 mins and 35 seconds. (you know what other 8 min, 30 second song I love? Paradise by the Dashboard Light)
- Yo can I uh…work in here..
- Ever since I left trading to be a strategist things be like…
“Fly Me to the Moon” was the first song I danced to with my wife so it holds a special place in my heart. This hip hop version not only modernizes it but reminds me how timeless the song truly is
(how awesome was that first dance with your spouse? What an incredible memory)
https://www.youtube.com/watch?v=O1puRnV6gwE&feature=youtu.be (you need to be able to hear this)
Have a great night