Summer, Summer, Summertime
Equities start the day rip roaring higher as summer winds down. Yep, that’s right, the days are getting shorter so pack it up and get the rakes out, summer is practically over. What a first half of the year though right? 10th best start in HISTORY to the stock market and our economic expansion is now the longest on record. How about them apples? @HumOnTheMarkets posted this picture showing what happened for the full year when the market was up at least 15% in the first half and yikes, those are some crazy numbers. Either a surge into year-end or a colossal selloff with only one tame outcome in 1976. Of course anything can and will happen so while that little graphic is fun to look let’s remember that the future is difficult to predict. Speaking of difficult to predict, I’m still blown away by the fact that the market is soaring while economic data slumps, trade wars are being waged, and almost no one thinks the economy will accelerate in the 2nd half. You know what’s that’s called right? A wall of worry. There are some very smart people out there who have stuck by the notion that a protracted trade war is GOOD for the stocks because it locks in negativity/fear. Once again investors who ignored fear mongers, top callers, and basement dwellers are being rewarded. Behavior is the most important thing you can manage when it comes to investing so congratulations if you ignored all the blaring headlines in the first half of 2019. We are sitting at new all-time highs and guess what? Making new highs is more bullish than not making new highs.
After the open we saw a whole lotta selling and very little buying. A gap up of about 1.1% invited all kinds of profit taking and by lunch half of that gain had been lost. Let’s talk stocks shall we? It’s been awhile since I’ve sarcastically picked apart an intraday move. The biggest winners were all chip names after this weekend’s ceasefire between the US and China. Imagine trying to run a chip company right now, how much of your stock performance is out of your hands? 90% 95%? AAPL gained 1.8% on the heels of Jony Ive announcing his departure. Is this a good thing for Apple consumers? I’m leaning towards yes. Maybe the next design team will stop trying to make everything as thin as phyllo sheets. Dude, I want a battery that last longer than 8 hours, not a phone I can’t see from the side. The biggest loser was COTY, a beauty products company that fell 14% after announcing a $3B writedown on some of their cosmetics brands. I guess they didn’t build their COTY on rock and roll? God that was so bad, I may give up writing forever. By lunch it looked like all the excitement around the Trump Xi meeting had fizzled out as we kept sliding lower.
We caught a small bounce from the session long selloff and managed to close at 2,964, up 0.77% which is a new all time high on the S&P500. So let’s wrap this up with one final tidbit: if we manage to hold on for another 6 months this will be the first decade without a recession in the US since the early 1800s. Now I hope I didn’t jinx it there but that’s a remarkable fact and a testament to the resiliency of our nation to bounce back from an awful housing/market bust. Imagine you spent the last ten years worried about every single slowdown in economic data or ripple in the market. Imagine you listened to the bubble callers and spent all your money on canned tuna and underground shelters. Markets go up and down, cycles come and go, spend less time worrying about those and more time on what makes you happy and you’ll have found a secret to life. Besides, who ever got rich betting against the United States of America? NO ONE.
- 8 hours a day, 5 days a week is a relic of the past for a great many jobs: “The traditional eight-hour work schedule is great if your job is repetitive, customer-facing, or physically constraining. But for the large and growing number of “knowledge jobs,” it might not be. You might be better off taking two hours in the morning to stay at home thinking about some big problem. Or go for a long mid-day walk to ponder why something isn’t working. Or leaving at 3pm and spend the rest of the day envisioning a new strategy.”
- I think this is a great take by Cullen Roche: “And that’s what brings us to the current expansion – while it’s been a weak expansion there are no obvious signs of a widespread boom. And the booms are what we need to be most concerned about. Yes, there have been pockets of unsustainable growth (such as San Francisco house prices and perhaps the stock market boom), but there hasn’t been a widespread surge in any specific part of the economic that is likely to cause a large and sustained bust. And that’s why I believe that if there is a bust it will be a fairly mild bust. So, yes, the expansion has been long, but it’s been smooth and that could be a good thing because it means that it won’t end with a big bust.”
- You know what? Being average is OK: “Keeping my head down, working on things I love doing, spending time with people I love, and not worrying where the race is headed and where I stand in ‘alpha-dom,’ I think has kept me somewhat sane over the years. This has helped me in my investing too, where not chasing “above-average” returns has helped me stay away from hot sectors and stocks for most of my investment career, and in turn achieve adequate returns that have helped me meet my goals so far without having to resort to any heroics”.
- I know you’re looking for an easy recipe to feed guests on the 4th of July. Your boy has one for you right here! This is a layup!
- You think the wifi is good there?
- I typically don’t get jealous of other people’s homes because I cherish all that life has given me but yea…im jealous.
Hey, it’s a holiday shortened week and that has me in a great mood so let’s see how awesome people are! (do we think these are all real? Some seem impossible)
Have a great night