This is my kind of stock market.
I’m a trend follower and so I like seeing prices move up to the right. A melt-up is underway. This morning Google is up $100 and McDonald’s is up another $5 (I am long both).
The S&P and Nasdaq are at all-time highs. Sentiment is still rather skeptical. Consumer confidence is high (I would argue in an era of apps and smartphones, where people do not need as much stuff, it is easier to keep consumer confidence high). Interest rates are low, unemployment is low and even bank stocks are rallying. My mostly aggressive growth portfolio is working. Yay.
While I do not pay people to help me find trends, I do pay people to help me understand what may lie on the other side of the trends.
Ben believes our leaders are spreading a disease that zombifies and oligarchifies a global economy…creating financialization.
I love this from Ben in his latest email:
What does Wall Street get out of financialization? A valuation story to sell.
What does management get out of financialization? Stock-based comp.
What does the White House get out of financialization? Re-election.
What does the Fed get out of financialization? A grateful Street and White House.What do YOU get out of financialization? You get to hold up a card that says “Yay, capitalism
Ben’s partner Rusty is out with a great piece today titled ‘So I Got That Goin’ For Me‘ which is a good follw up to Ben’s ‘This is Water‘. Read them both as they elaborate on Ben’s email quote.
I think Ben is dead right, but that has nothing to do with the trend I am riding right now. Ben is not telling me to sell my stocks, but he is pointing out the flaws in the system which keep me humble about the gains I am making.
My friend Charlie who is neither a bull nor bear pointed out that EVERY maturity of Swiss Government bonds have a negative yield. The government can borrow money for 50 years and be paid to do so.
Charlie also had a fun data factoid about fake meat Beyond Meat whose stock has been the darling IPO of 2019. Take a look:
From Charlie’s lips…The height of insanity.
Charlie is not telling me to sell stocks, but it’s good to be reminded that we may be on borrowed time.
These markets have something for everyone. No wonder Robinhood has a $7.6 billion valuation and CNBC still has an audience.