More Random Thoughts
After a week off, you would think I would have a long list of things to write about, what with everything that happened last week. Really? Last week was not an eventful week and I am glad I was down in Florida for most of it. While the weather in New York has been relatively nice for winter, Florida was stunning.
However, I am back and it’s time to start writing about things that people actually are interested in. Florida has a lot going for it for sure but the one thing it may never have is grit. New York has grit. New Yorkers have grit. Transplants get grit. Those that don’t move back to Mommies basement in Raleigh and work at some Research Triangle startup and are never heard from again.
As the country moves to “softer”, New York remains hard. There are other cities that have fought that “softer” approach. Philadelphia, Chicago, Detroit. To name a few but none have the grit of New York. I am not sure if it’s a good thing but that grit has helped New Yorkers overcome so much and I am thankful I have a little of that left in me.
Today is the second day of the Worlds biggest gathering of hypocrites, The World Economic Forum in Davos Switzerland. This confab is basically a reward to CEO’s and Heads of State for a job well done. It is by far the biggest waste of time and money that we see on an annual basis. Nothing changes, CEO’s talk about all the hot topics of the day. They come up with zero solutions and spend tons of corporate and governmental money discussing the trials and tribulations of the World. To see the tarmac at the Davos International Airport, littered with 50-100 private jets tells you all you need to know. Global warming surely can’t be helped with all the fuel these jets use ferrying around potentates and minions to this bougie meeting in the Alps. John Kerry was roasted on Fox for flying exclusively in a private Gulfstream jet to every meeting but the reality is, every CEO is guilty, even Fox News execs, of burning up a lifetimes worth of fuel flying to and fro.
They want China to curb coal burning and switch to what? They want every nation to ban gas powered vehicles? I mean, come on, enough with the stupidity. Enough with the hypocrisy.
The press is all about the impactful discussions all these geniuses will have over the next few days. In between the skiing and the jumbo shrimp cocktails. Great. Let them talk. In all the years I have been following Davos, not one thing was discussed (let alone a solution reached) that wasn’t in any number of college student newspapers. Sure, you have Nobel Prize winners discussing economic policies at length but who even understands those people and again, nothing is solved.
They make it out like the World is on the precipice but I contend that the World is always on the precipice and this year is really no different from any other year. There obviously was one exception, The Pandemic, but they didn’t meet in person and that video version of Davos left a lot to be desired.
To finish up my point. Davos is really a waste of time. Anything anyone says there has been said hundreds if not thousands of times before. It has zero decision making capacity and every agreement that was “signed” there has failed. Climate change, still here and getting worse. Inflation/recession, each country will deal with on their own. Rising sovereign debt, everyone agrees its a problem but no one is writing a check or forgiving a debt.
More important things. The markets have had a robust start this year but it is just the start of the earnings season and at the end of the day, it’s about earnings. In past decades we always had a bell-weather stock. GM, IBM, GE were all bell-weather stocks. The very old adage “As GM goes, so goes the country” was partially true. You could almost guaruntee if GM was doing well, the country was doing well and the stock market would be doing well.
No longer. There is no such thing anymore because markets are much deeper, economies more complex. However, you can make a case for a sector showing the way and maybe I am biased but I have always felt that the financials were that sector. Not in their earnings announcements but in their guidance. When the money center banks and the Goldmans and the Morgans tell you that they see a lot of headwinds, believe them. They see flows of money for future projects and can get a good idea of what the economy may look like in six to nine months based on their deal flow. It’s not infallible however.
Reading through statements by the leaders of these big institutions is usually better than trying to read between the lines of Fed Chairman Jerome Powell. Jamie guarantee is as straight a shooter as you will ever find and he will not sugar coat anything. David Solomon is another CEO that gets right to the point. The key point here is not to do a deep dive in the past. Why they missed or beat is no longer important. It happened. What you want to hear is what they are going to do about it and what they think the economy is going to look like in the future. Their annual statements are pretty good indicators of their own companies prospects along with what the overall economy will look like.
Or you can listen to me.
I will still hold that the first quarter will be choppy and there may be multiple opportunities to reenter the market at attractive prices. I will say that I am not into market timing and a balanced reentry strategy will work best over the quarter. Few people every win the market timing game. Dollar cost averaging is my preferred strategy this year.
My last thought and I will probably expand on it at some point is about the confidential documents that were found in Joe Biden’s garage. Forget the egg on every Democrats face since their beloved buffoon is guilty of the same thing as Donald Trump. I think it was a semi-well thought out plan by his own party to slowly kneecap the President and make sure he decides not to run in 2024. I know Joe Rogan brought this up in a whimsical way on his podcast but I actually heard it mentioned early last week and I got to thinking.
Do I think this will lead anywhere? Probably not. Thats why I think it might simply be a way of telling Joe Biden he should not run. Ultimately, preventing the embarrassment of him going through a primary season and losing the nomination.
While the press, the DOJ and every political hack in Washington is pressing for charges against Trump because of classified documents that he did not turn over to the National Archives. Papers that were locked away in a secure compound. They will not press too much for an in depth investigation of classified documents in an open garage at the President’s house in Delaware. A house that is guarded by the Secret Service but yet has no sign in sheet for visitors. Along with the fact that no Secret Service agent can recall who visited and when? HMMM.
Again, more hypocrisy.