The Watchdog on Wallstreet Weekly Recap for 12/12/22

12/12/2022 Why you should be aware of Wall Street chattering class and focus on the fundamentals.

I’ve been finding myself on program panels with Wall Street chattering classes that claim to know what will happen in 2023. Have you ever gone back and looked at their projections for 2022, 2021, or 2020? Have you ever thought about looking? Well, guess what? They are wrong most of the time. 

We, at Markowski Investments, don’t make forecasts. Fair enough, we are not going to guess where the S&P 500 will be at the end of 2023. We don’t know, but we know for sure that we will invest in high-quality companies—companies that pay you to own them. Yes, we are laying the groundwork for volatility and problems in 2023, but we saw them in 2022, and if you had laid that foundation, you would have come out on the other side smiling.

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12/13/2022 Why there is still much work to be done even though inflation is starting to improve.

The numbers came in at 7.1% year over year, which was more than predicted, and inflation has been decreasing in recent months. Again, I see some promising signs. I believe that food prices will begin to fall, which is critical because it is affecting many families. I believe that the housing market will continue to go down; it is currently a slow drip, but it will sink down, causing rents and house prices to drop. These are all great. Let’s be clear: the Fed is restricted in what it can do when it comes to jobs. When it comes to eliminating all the insane government spending that we find ourselves involved in, that has to come down to Congress, and honestly, I’m not sure they’re up to the task.

12/14/2022 What people should assume as Washington is working on a spending bill.

Indeed, you’ve got Republicans, Democrats, and the Senate. You’ve got the house. They are working together. Yes, another big spending package awaits.  Whenever you hear this, just think of the movie Animal House, with Kevin Bacon in the role, assuming the position, and Niedermeyer smacking him on the buttocks with the paddle. 

Assume the position, people! Yes, it doesn’t matter if you’re a Democrat or a Republican; it makes no difference. You’ve got 75,100 or more earmarks for this bad boy. And you know who gets the most out of this? The outgoing senators It’s like a little gold watch because they’re retiring. Here we go with 600 million. Here are 500 million. This is not how the country is supposed to work.

12/15/2022 How subsidies fail both in the US and in China.

As longtime listeners and followers of our podcasts, radio shows, and money minutes are aware, I happen to love the free market. I love the free market in the same way that I love Mother Nature. However, the free market exists in its own ecosystem. 

An unbelievable story based on a study done by the NBER looking into China. It’s about the subsidies that were paid to companies from 2007 to today. What they are basically looking for is to see if the subsidies work. Did subsidies make companies better? Did subsidies make during companies more productive? And the answers are no and no. But again, people who believe in the free market as much as I do already know this. The funny thing is, we make the same mistakes here.

12/16/2022 Market sell-off. What you shouldn’t do.

So market sell-offs. What does it mean? What should I do? I can tell you, first and foremost, not to do stupid things. Don’t do stupid stuff. Do not make irrational emotional decisions based on market flows and what someone in the chattering classes has to say, unless what you have in your portfolio is garbage and you need to get rid of it. 

Again, real wealth is made during market sell-offs, recessions, and bear markets. As put by J.P. Morgan, “In bear markets, stocks return to their rightful owners.” An egotistical statement, but true. 

If you have a quality portfolio, if you build up your positions when the market is down, and when the market turns around, guess what? You’re going to be on top. Use your head, people!

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