On almost every call these days I get asked what I think about the markets.

My honest answer is I don’t know. It is why I have been keeping a high cash position.

It is easy to blurt out ‘don’t fight the fed’. It has been true.

It’s also easy to think that most technology stocks can go up without the old economy stocks going up because that is what is happening, but throw in massive unemployment and a virus and your guess is as good as mine.

I loved this tweet from Modest Proposal about all of this to the tune of John Lenon’s ‘Imagine’:

General Electric was the LARGEST company in the world 15 years ago and technically it will be a penny stock this week.

Warren Buffett looks tired and confused. The most bullish thing he said in his four hour Zoom call with disciples was ‘don’t bet against America’. That does not inspire!

Howard Marks released his latest investment memo yesterday and the title was ‘Uncertainty’.

I’ll defer to Howard who ended his letter with…

The more I think about it, the bottom line is clear:

The world is an uncertain place.

It’s more uncertain today than at any other time in our lifetimes.

Few people know what the future holds much better than others.

And yet investing deals entirely with the future, meaning investors can’t avoid making decisions about it.

Confidence is indispensable in investing, but too much of it can be lethal.

The bigger the topic (world, economy, markets, currencies and rates) the less possible it is to achieve superior knowledge.

Even our decisions about smaller things (companies, industries and securities) have to be conditioned on assumptions regarding the bigger things, so they, too, are uncertain.

The ability to deal intelligently with uncertainty is one of the most important skills.

In doing so, we should understand the limitations on our foresight and whether a given forecast is more or less dependable than most.

Anyone who fails to do so is probably riding for a fall.

As Neil Irwin wrote in the article cited on page 4:

It would be foolish, amid such uncertainty, to make overly confident predictions about how the world economic order will look in five years, or even five months.

Despite all the uncertainty about banks and the economy I am pretty certain the Nasdaq will see 10,000. I just don’t know when.

I’m also certain it will be 100 degrees again next week in Phoenix so I will enjoy the few days I am getting in the 90’s this week.