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- The Stock Market is Good
At the start of this week, with Memorial Day, we paid tribute to those who sacrificed their lives to defend our country and our way of life.
We also discussed how we believe that we should respect their sacrifice through our actions. One of the most significant actions we can take is maintaining a sense of OPTIMISM
about the USA and the world. Just as in the financial markets, perceptions about the future DO impact the future.
If we believe that the world is good and getting better – and take positive action to make it happen – than it will happen.
We think the stock market is a fascinating laboratory for human behavior. It is like a scoreboard where human behavior and progress are represented as data.
This past week, we saw a few great pieces of data, some from other folks we follow, and thought we would share those with you.
The conclusion? The stock market is in pretty good shape.
The first of these is from author Morgan Housel. If you have never heard of him, seen him speak, or followed him on social media – do so. NOW.
He is the single author that I have found that sums up long-term perspectives simply. His insight allows investors to cut through the "noise" and focus on what really matters to grow their wealth.
He posted this the other day…
At every point on this chart you could have made a plausible case that:
1) the future was dim
2) the young generation was lazy
3) politicians were screwing everything up— Morgan Housel (@morganhousel)
12:03 PM • May 23, 2024
We think about this concept a LOT!
As much as we want to think that every moment in time is unique, different, and special – it is NOT. Just because we happen to be living, it doesn't mean anything has changed.
Ultimately, we are all human beings and still have the biological wiring (and behavior) we had thousands of years ago.
The details – technology, economies, governments, etc. – might have changed, but the outcomes remain the same.
What is that outcome?
Progress! I believe that we live in the single greatest moment in human history that has ever happened every moment.
There are plenty of problems, but we continue to move forward.
The stock market is not a direct measure of that progress, but it isn't a terrible one either.
Morgan's chart brings it home. It feels like every moment is the worst, and everything is about to collapse. Factually, the opposite has been true.
The next thought comes from another one of my favorites – Charlie Billello.
He is another one that is a MUST follow. His X/Twitter account is particularly awesome.
He posted this the other day…
The S&P 500 ended the day at a new all-time high, its 24th of the year. Over the last 12 years, the S&P 500 has hit 371 all-time highs, which is more than any 12-year period in history. $SPX
— Charlie Bilello (@charliebilello)
8:20 PM • May 21, 2024
The last few years – with COVID and the BEAR MARKET of 2022 – it may feel like everything has been pretty terrible in the stock market.
However, we have gone through one of the best twelve-year periods in the 100+ year history of the stock market.
There has been a ton of volatility, but if you stuck with it, you have crushed it. Again – perspective.
Finally, we share a thought from our great friends at Stansberry Research. Most of our readers are familiar with them, but we encourage you to follow them on social media and sign up for their free daily email.
They shared this chart recently…
Since the stock market bottomed from the 2022 BEAR MARKET, it has been 19 months, and it is up almost +50%.
That is a fair amount of time and up a decent amount. Should we be worried it is over?
Not at all. Look at the table.
The AVERAGE duration is 60 months, and the average return is +178%.
We are not saying that this BULL MARKET is going up for that long or that much, but we ARE saying it goes higher.
There are many reasons to be optimistic, and we think you will get paid for doing so in the stock market!
How long do you think this BULL MARKET will last? Share your thoughts in the comments section online or email us at [email protected]
Check out Enrique Abeyta’s conversation with his former colleague and “Wall Street Beats” team member, Berna Barsha on the latest HX Podcast episode, or watch on YouTube below.
This week Enrique welcomes another former colleague and "Wall Street Beats" team member, Berna Barshay. Berna continues the mantra of WSB's Herb Greenberg of "know thyself" when investing, (and invest in what you know).
For her that means capitalizing on her knowledge and experience in the consumer space. She and Enrique also discuss retail and apparel, and what Kate Spade and Crocs could possibly have in common!
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