The overnight markets on October 9th demonstrated just how pointless it is to follow the markets over the extreme short term. Made even more ridiculous with the global financial markets’ fascination with such inane subject matter as the current progress of Chinese trade deals or Brexit. In a Twitter thread from one of the financial noise networks that afternoon/evening, we first saw Dow Jones futures tumbling over 300 points…. 

 

 

Then quickly recover their losses, only to dip again on some other news out of China…

 

…then open up on Oct 10th and finish the day at 26,497 (around 500 points up from the overnight lows).

 

My point is that all of this is just irrelevant noise. Even my table of market returns above for the month of October should be completely irrelevant to anyone with a long term investment strategy. I do these tables just out of my own fascination really, and I think the Potential Drawdown Table provides far more useful information in setting the right expectations. You'll notice by the blue shaded cell on there that the S&P 500 made a new all-time high in October, only two months after the noise networks rung the alarm bells over a more than 5% decline from the previous high...

 

 

The really curious thing about today's markets is that despite hitting new highs, investor sentiment remains pretty crappy. According to this graph, sentiment never really recovered from the last highs in summer 2018 and hasn't really been anywhere near "high" since January 2018, so I don't know....

 

 

Tweets and Articles for October

 

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 Mid-Year 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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