It's the beginning of trading in the month of October and the markets have seen a steady decline. This is one of the more difficult market environments we've seen. Jonathan Ruffer, one of the greatest investors of whom you have never heard, recently wrote, “(i)n the forty-five years I have been an investor, I cannot recall a more dangerous period than today.”
We had some positive feedback on our myth-oriented update, which inspired one reader to ask we theme an update on Ulysses, the James Joyce classic, not the star of Homer’s Odyssey. So, I went to the library and checked out a 30-year-old edition that appeared to have never been opened.
Investors felt a little like Milhouse in July because despite a deluge of bad economic and inflation data, equity markets still posted strong returns. We will look at both the news flow and the market’s reaction; and where it might all go from here in this Milhouse-inspired update.
As referenced on our recent podcast, there is a modicum of excitement around Top Gun: Maverick. The original is iconic, in part due to its legendary soundtrack, including Danger Zone, by the unofficial king of soundtracks, Kenny Loggins.
As referenced on our recent podcast, there is a modicum of excitement around Top Gun: Maverick. The original is iconic, in part due to its legendary soundtrack, including Danger Zone, by the unofficial king of soundtracks, Kenny Loggins.
I said no camels. That’s five camels…Can’t you count? Before we get to the elephant, well, camel, in the room, which is a historically bad April for equities, let us look at one of the root causes: The Federal Reserve. More specifically, investors tend to view rate increases like camels: fewer is better. Going into the meeting, we were expecting over ten…by December. The Fed made good on two (2) at the May meeting, bringing the count to three (3) hikes so far, with eight (8) more anticipated.
Our family drives…a lot. Unfortunately, the driver (usually me) does not control the music. That falls to the children, and recently the music has been almost exclusively the soundtrack to Encanto. As a Hamilton fan, I will grudgingly admit some of the songs are catchy. Having said that, the charm wanes after listening to the same song a dozen times on a three-hour tour. Just the same, given the fantastical and magical rally we saw in March, we will look at these charmed markets and see if they might last.
What a difference a month makes. Last month, we used the potential for a Bengals Super Bowl win as our backdrop; sadly, the orange and black fell just short. This month, we are writing as the world and, less importantly, markets, are focused on the blue and yellow of the Ukrainian flag. This region is not new to conflict, having inspired one of history’s most famous martial poems, Tennyson’s The Charge of the Light Brigade.
There are two things we cannot ignore in this month’s recap. One, the historically dreadful January we have seen in stocks. Second, though, is the tremendous run the Cincinnati Bengals have made. Given that today (February 1) marks the beginning of the Lunar New Year and begins the Year of the Tiger, perhaps a fortuitous portent for the orange and black.
We are done with memes as a theme. The market, however, seemingly is not. Look no further than December 23, when a giant ape was delivered to oppose the famous Wall Street bull. A little too on the nose, as far as symbols go.
Notifications
