Anyone have any thoughts on whats going on in the market? I’ve noticed a couple things. First, theres a housing “recession” though it seems like its pretty mild and in the early innings of what that would look like since theres still way too little supply, and prices havent fallen that much. Housing is also a leading indicator of a recession so thats kinda important.
Secondly, I’ve noticed a lot of the growth stocks seemed to bottom out early this year and they’ve been getting better since. Ive got some growth indexes in my retirement fund like ladyx, and its up 20%+ since its bottoms earlier this year. I also follow a bunch of meme stocks and have noticed they’ve started rising a bunch again. Not anywhere near a year ago but they’ve gone up a lot in the past month. I think it may be because august is a low volume month, and some investors may think the fed is going to be more doveish?
And I’ve also noticed that Michael Burry dumped almost all his stock investments. He thinks theres going to be earnings compression in the coming months, though he’s been early before, of course.
Any thoughts on whats going on? Are things actually getting better? They look negative to me but the market seems to be headed in the other direction.
50/50 each in JLGMX and SCHW. I wanted to go in on QQQ last year but it wasn’t an option in my 401k. Sucks because its beaten JLGMX by ~14% so far this year, but I’m doing ok. Not even sure if growth is the move going forward with the higher interest rates. I also was primarily in conservative investments until late last year because I viewed the market as too hot during a lot of 2021 and 2022, and moved into these two positions primarily in and after August, so I was still down ~5% during the year but that beat the market by ~14% so I’m fine with that. Up ~19% so far this year in total vs. ~14% for the market. Overall looks like from the beginning of 2022 the market is down about 8%, and I’m up a little above 11.5%, so my picking beat the market by a little under 20% during that period.
Also concerned about this piece by Vanguard and what they think different classes are going to do going forward, though my understanding is they’ve been under estimating growth for decades. Shitty decades are also generally better for young investors since historically theyve tended to be followed by really good decades, so I’m fine if the coming decade is kinda shitty.
So we just had an earnings recession or 2 quarters of negative eps growth. It’s actually 3 now. I like to use ed yardeni for this. https://www.yardeni.com/pub/yriearningsforecast.pdf
While this is happening, prices have gone up 15%. People are probably focused on 2024, where people expect a large bounce.
Overall, the market is trading for 2023 at 20x or 18x for 2024. It’s about a 5% earnings yield.
Meanwhile the risk free rate is at 5%.
Now I don’t like to time the market. Even when the market crashed in 1928, you still had about a 6% cagr in the next 50 years.
But if there was a time to pullback, it wouldn’t be the worst idea. I figure I don’t have to for three reasons:
And I’m good looking.