Market Update - September 14, 2020

September 14, 2020

I hope that this finds you healthy and as positive as one can be during this continued odd time.

This past weekend, the Detroit Lions held a commanding 17-point lead in the fourth quarter, only to find themselves down by 3 points with 6 seconds to go.  They proceeded to drop a winning touchdown pass just as time expired.  Another inexplicable loss, S.O.L. or Same Old Lions. While mourning yet another loss, it occurred to me that perhaps I should be rejoicing. Maybe this is an indicator that life is beginning to return to normal?

Stock Market and Big Tech

The stock market continues to defy odds with technology companies carrying lofty multiples and valuations.  Although we are grateful for a short-term V-shaped recovery (but not GDP), more volatility could be right around the corner, ultimately ending at some point with something that is more complex than a simple V. To provide the most notable example of extreme-valuation, consider the following from our electronic vehicle friends at TESLA, familiar to most in the Detroit area.

Continue reading

Covid Response

As mentioned in our prior newsletters, many snakes laid beneath the grass. Throw a COVID-19 impact on top of debt laden society with a previously slowing economy, and it looks like the Indiana Jones moment when he learned that Asps were an entire roadblock between him and the ark of the covenant. I remember back in second grade proudly telling my teacher, that an “a-s-p” was a word in a word-jumble exercise. “It is a venomous snake”. But she wasn’t buying it. Luckily, during recess, my principal, Sister Trudy, and Miriam Webster both bailed me out. But no number of bailouts and packages will save us from economic issues that lie ahead. Essentially, Trump wants nothing more than to seize the ark from Indy and be declared the winner. Neither side of the far left or far right will win. Globally could be even worse. Only hard work, innovation, and better communication while buckling up through some serious snakes will get us out of this.

• This health crisis struck us at a vulnerable moment, at a time when the economy was slowing (contrary to popular opinion), earnings had already peaked in 2018, the Fed was already out of ammunition due to rate cuts, and stocks were at elevated levels. 

Continue reading

Market Update - March 11th 2020

What is transpiring?


The coronavirus has triggered a panic in the market that we have not seen since 2008.  Emotions drive markets, and we are seeing that now.  But we’ve been through major panics before. The difference (minus the unknowns of the virus) is that people have less faith in the Fed’s ability to provide stability to the economy and that is a real issue. The ammunition to reduce rates that I have spoken of at length over the past 2 years, is gone.  

Continue reading

Market Update - March 3rd 2020

With the market volatility recently, below are our thoughts on the COVID-19/coronavirus as it relates to the market and economy.

Ironically, I’m heading to New York City today to visit investment colleagues at First Eagle along with roughly 100 other investment advisors from across the country. The lead portfolio manager, Matt McLennan is likely to expound on the coronavirus during this very informative annual conference.  Matt happens to be co-chair of the Board of Dean’s Advisors of Harvard’s School of Public Health and was involved in assisting the research and fight against the Ebola virus a few years ago. First Eagle is very tied into think tanks and heavily immersed in international policy and healthcare.

Continue reading

Enewsletter Sign Up