Knowledge Transfer Series #39: TIME the Cycle 2of3
So in this supposed “meltup” what should we not look at that we can expect to hear about constantly through this phase?
TUNE OUT during Meltup:
Wall Street predicitions about expansions/recessions not tied to the real estate/banking crisis cycle
Euphoric predictions about index levels (e.g. DOW 60,000; DOW 100,000) – this always comes at the end. 😂
Federal Reserve antics – they have two mandates – while they can work to change the water’s path – in nature – the river ALWAYS regains it’s course over TIME.
Presidential Politics – No matter who becomes President. They will do different things – both parties will attempt to fix - but instead make things worse. While they can influence particular securities, they cannot influence the cadence of the real estate/banking crisis cycle. History proves it simply does not matter what they do – the cycle will end on TIME.
Most everything you hear from any news source about the market. Including your neighbors that don’t normally talk stocks because of their new found stock market (paper) wealth. 😂
Stocks increasing/decreasing earnings estimates. Forward guidance is most important right now. If a company is decreasing for macroeconomic reasons, it’s TIME to get out. If it’s for a temporary operational reason, just follow the long-term guidance and continued beating estimates. 😁👍
RAPID market pullbacks over a few days or weeks. 4-6% are typical (remember April this year – or did you already forget!) but 10% is not uncommon (last week). As long as stocks hold their lower Bollinger Band, they are within their trading range and will revert to their long-term trend.
So what kind of things should we TUNE IN to?
TUNE IN during Meltup (partial list):
Crime climbing due to persistent inflation. Have you heard of shrinkage? That’s the level of stealing that companies accept. It’s rising – you know that. Removing self checkout. Crimes of all kinds rise. People are pissed – it’s an indicator of the unsustainability of high inflation. The stocks move ahead of the cycle end – look up Core Civic, Brinkers, Diebold, Axon Enterprise. 🤢
Geopolitics – Tensions, disputes, and wars between countries elevates ahead of the cycle end. Defense spending worldwide rises. 🤢
The stock market turns into A RUNAWAY BULL MARKET. Speculation hits an amazing frenzy. So anything speculative that has no business or balance sheet starts climbing. You know these things…..Crypto, AI anything, Microcap stocks, Flying machines, Robots, Options, Warrants, Forex trading, Private Credit, etc. on and on.🤑
…..CONTINUED in Knowledge Transfer Series #40
