Market Muhsings

 

I'm committed to making my market commentaries here shorter than in the past because, contrary to what the financial noisemedia will have you believe, prognosticating and analyzing the very recent past is of absolutely no value whatsoever to the long-term investors who might find their way to this page via my newsletter

 

Instead, if we're looking back at the last month, let's comment on the markets from a behavioral investing perspective: the markets are idiotic, paranoid, shortsighted, and completely and utterly ignorant of the past, as always. Once you realize this, it'll make you a better investor. Horace Walpole once said "The world is a tragedy to those who feel, but a comedy to those who think."

 

 

Obviously what the noisemedia is making hay about lately is a strain of Coronavirus, which has led to a few hundred deaths primarily in a Chinese city of 11 million. Yet, according to the media it's, like, Ebola. Not Ebola in real life, which has been contained each time it broke out, but Ebola from the movie Outbreak, or the virus that wiped out most humans in the latest Planet of the Apes franchise. We're all going to die, or at worst this means China is going into recession.

 

 

Will it fizzle, like every other outbreak before it? Will it have zero long-term effect on the markets or the businesses of the great companies of the world? All I can assure you is that a ton of noise will be made in the short-term. That is their business; that is how they get clicks. If you were living in a vacuum the past few weeks and you're just reading this now, you've probably already googled Coronavirus and are reading the latest headlines. You've seen the targeted ads on their website and their work is done.

 

Subscribers to my newsletter will have gotten my predictions for the 2020s:

 

  • There will be more bad news, more geopolitical strife, more wars, more stuff to worry about [add killer-virus epidemics]
  • There should be, by historical average, at least 2 bear markets, just as there were in the 2010s (in 2011 and 2018)
  • There should be a 10% or greater decline, on average every year (just as there were 9 in the 2010s). A 10% pull back from the highs brings the S&P 500 down to 3000; formerly an unassailable high (yet the financial noisemedia will still make a fuss over it)

 

Tweets and Articles for January

 

Whenever I read something good, I tweet it out from @CGWM_Muhs. Follow me on Twitter if you want live updates of what I'm reading. For those who don't have the time for Twitter, a short list of some of the best stuff I read below.

 

More Stuff

 

Capital Group's 2020 Outlook CLICK HERE

 

RBC Global Asset Management's One Minute Market Update for Fall 2019 CLICK HERE

RBCGAM's One Minute Market Update is a short quarterly overview of the markets. What I especially like is their "Fair value range" charts on the right side, taking very long term views of various markets and where stocks are trading relative to long-term fair value.

 

JP Morgan's latest Guide to the Markets CLICK HERE

This 60+ page slideshow is chock full of charts, facts and figures, that give you pretty much everything about everything you could possibly want to know about the economy and markets. Want to know how U.S. stock valuations compare either historically or with the rest of the world? Want to know how much the U.S. government is borrowing? You'll find it all here.

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