If you're not confused, then perhaps you're not concentrating?

8th Aug '23 by Paul Hill

3 comments 568 reads

One reason for today's such fierce 'Bull vs Bear' debate wrt the future direction of the markets, is that the US' leading economic data is so contradictory (see below charts).

On the one hand, the Federal Reserve Bank of Atlanta GDPNow tracker has climbed to 3.9% for Q3. Whilst on the other, the LEI & yield curve are both flashing recession.

Enough to drive us investors mad!

Maybe the missing piece is the jigsaw is simply those wonderful 'long & variable lags' (re effects of tightening monetary policy) that the Federal Reserve keeps warning about?

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About the Author

Paul Hill

Premium Member

Stocks owned : EQLS, AGFX, Pfizer, Bristol Myers, Roche, WATR, VCT, MBH, ASTO, IOM, TR25, ESYS, ELCO, IHC, Paypal & AOM Elsewhere, I'm also paid by Vox Markets (as a contractor) to interview interview fund managers, capital market experts & companies (re EQLS, VRCI, BELL, FIN, AVG, AVCT, LLAI, VLG, FADL, SUP, ELCO, LORD , MPAC & ONC). I believe all these stocks are clients of Vox.Lastly my 24 year HIT RATE is only 62%. Meaning 38% of the time I lose money (ie often wrong) - albeit my winners are (on average) 1.5x larger than my losers. Please Do Your Own Research. more »

3 comments

shipoffrogs

8th Aug '23

Well if concentrating on this stuff just leads to confusion, maybe the optimal approach is just to ignore it.

Paul Hill

8th Aug '23

Unless of course you're trying to price in risk &/or a wide range of outcomes into stock prices. Or in other words, what margin of safety to use?

sam viskovic

9th Aug '23

We had a speculative mania in 2020/21 the first wave of which has burst with many profitless tech companies down 80-90%. In March 2023 Mr Market finally realised that the U.S. regional banks had been broke for the last 6 months, which anyone who read the financial statements would have known.

Staggering incompetence from the fed here, who allowed the banks to include long dated bonds paying low interest as highest grade collateral even as they aggressively raised rates. I am sure that they've got complete understanding and control of the global economy though.

I wouldn't have guessed that these were the conditions for VOO and QQQ to rally back to all time highs on the strength of a new AI bubble but they once again jammed the system with money so there you go.

The soft landing myth is hopium and misleading words from the fed which doesn't want to tell people that it is raising rates specifically to cause a recession because it's a shitty thing to do to people and causes reasonable outrage from the public.

See the reaction in NZ when they tell the truth, this is why the fed lies about it.

https://www.stuff.co.nz/busine...

Put me in the bear camp, GLTA.

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If you're not confused, then perhaps you're not concentrating?

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About the Author

Paul Hill

3 comments

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