May 30, 2023

 Ignore Wall Street Pessimism…

Buy Stocks

Buy Cotton

I am no markets guru…I get this stuff right AND wrong…But I did spend my first decade in this business working at Merrill Lynch, from the inside so to speak, and those 10 years left me with the impression/knowledge that the absolutely worst market opinions come from the so called strategists, specialists and analysts who are employed by the major banks and brokerage houses as “experts.” They are all extremely well-spoken, well dressed, personable and sound intelligent…and know ALL of the industry and market related buzzwords…but are generally, no other way to put it, perennially backwards and just FOREVER fairly damn wrong about the markets…And this is definitely a generalization, but believe me, if you do have a real feel for the markets, you get hired to trade somewhere, not be on TV or the internet parroting what all of the other boobs in your “profession” are citing as “highly important.”  Yes, that’s strong, and sounds nasty, and not because I am some egomaniac who always thinks he’s right and everybody else is stupid, but after 43 years in this business, statistically and observationally, I firmly conclude that all of the above is correct.

And if you want evidence, here’s a table of Wall Street’s market expectations, and the actual outcome going back to 2000. Just compare the numbers in the two highlighted columns below to gauge their performance…

About the best you can say is that sometimes they only miss by 4 or 5%...but they majority of the time they are much further off, and obviously, quite often so wrong as to be comical…ESPECIALLY when something truly big happens is when they ARE at their worst. Period. ”Experts?” Statistically, the answer is, “NO WAY!”

Let’s get real…Virtually NONE of them were remotely expecting the 2022 crash in stocks…And then last October, when stocks were actually bottoming, they had all become full blown bearish…almost looking for the end of the financial world as we know it. And now? When you get down to it, with stocks now about 20% higher, they are STILL bearish, and cautioning, “Don’t buy it here. Recession coming!” Or citing a host of other reasons why they think the  best bet (and I think the absolute worst) is to be buying One Year CD’s paying 5%...Stuff like…”Stocks don’t like uncertainty,” or “The market has been rallying, but ‘breadth’ is not good,” or “The Fed might keep tightening,” or “Inflation just won’t go down,” or “Housing prices are going to tumble,” or “The Debt Ceiling,” or “The regional bank crisis is NOT over!”…And  on and on and on with reason after reason NOT to be optimistic about the economy and/or the stock market.

My take is that we have just come through the greatest economic deterrent since the Depression…that being the truly global Pandemic that represented a massively relentless body slam for literally every country and economy on the planet…BUT…and I honestly didn’t think we would get anywhere close to this by now…THE PANDEMIC IS OVER…And with my view being that it really only “ended” 2-3-4 months ago, this would suggest that we are now only 2-4 months into the initial stages of a pent up worldwide recovery that will be vigorously spring-boarding higher for, minimally, two to three years to come…

I firmly believe that as we go forward: Inflation will TOTALLY DIE as issue, energy prices will remain stable to relatively low, supply chain issues will be solved (and disappear), interest rates WON’T be going materially higher (1 more raise or so is irrelevant)…and consumers, from India to Indianapolis, will be working…and spending…and LIVING again…Bigtime. Also, that there is not a single industrialized country anywhere that won’t be stimulating their economies using every means possible…And finally?  Beyond that, when you put all of the above together with the fact that the Technology Revolution is STILL roaring ahead, creating totally new industries, new jobs, and new “products & services that routinely become “must haves” for the masses…? I THINK IT ALL SCREAMS “UP!”…FOR EVERYTHING, EVERYWHERE…IN A CONTINUATION OF THE PLANET WIDE SURGE THAT STARTED IN 1982 WITH THE ADVENT OF THE COMPUTER/TECHNOLOGY AGE…WHICH ITSELF WAS THEN FURTHER DRAMATICALLY BOOSTED BY THE “DEATH” OF ECONOMIC COMMUNISM IN 1990  (thereby adding several billion Chinese and Iron Curtain consumers to the global capitalistic equation)…AND…I JUST DON’T SEE THIS TRAIN STOPPING ANYTIME SOON.

Slowdown? I don’t see it…Here, there or anywhere…So again…BUY THE STOCK MARKET…

I don’t care how many times I have been right about the stock market, going back decades (it’s all still on the website), I never get anybody that takes a position in either the Dow, S&P or NASDAQ with me, such that my commentaries on equities are pretty much expressed due to the fact that Stocks obviously do impact other markets…So I’m not going to waste time here presenting a recommendation in any of those indices…But I DO again recommend the following market, which WILL I think move just as bullishly as stocks…

 BUY COTTON

 Do this…

Call me if you’d like to know more…

And oh yeah, New Lows in Soy again today…Still say the crash is underway but absolutely NOT too far out of the gate to get on board the short side.

Thanks,

Bill

770-425-7241

866-578-1001

All option prices in this newsletter include all fees and commissions. All charts, unless otherwise noted, are by Aspen Graphics and CRB.

The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Stock Indices, Cotton