We are Officially in a Bull Market!
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Is the bear market dead? Bear dead now? Bulls running? Is that what we have? For 30 years now, I’ve tried to get across to people out there that we could give a damn whether we’re in a bull market or a bear market. And of course the S&P has rallied 20% off its lows. So officially we’re in a bull market.
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Let’s, again, we like to put things into perspective here. There’s a lot of conflicting information in regards to, again, the economy as a whole, which we’ve talked about, to what’s gonna happen moving forward. Today we had the CPI number for example, and we’ll get into that in a little bit. The last three bear markets, two in the last three bear markets,
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a 20% bounce, 20% bounce very similar to what we’re dealing with right now. Then we hit new lows. So what are you saying Chris? Are we going to hit new lows? Is that what you see happening? I don’t know. I don’t. 2008-2009 great financial crisis.
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The market rallied some 20% off the bottom and then went to new lows in 2009. I think it happened twice, if I’m not mistaken. Bear Stearns happened and then it was in the fall of 2008. Dotcom collapsed 25%. The markets rallied off the lows and then went to new lows after that.
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We were there. We handled all of these things. Again, the recent bull market we have, just listen, if you actually think that we’re out of the woods, you’re not, but you’re never out of the woods. Do you understand people? This is the thing that again, I have such a hard time getting across. There’s never gonna be a sign out there.
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where all’s clear because things are never all clear. Anything could pop up at any point in time and change the direction of the markets. And you just have to know how to deal with that. That’s what we do. This is why we focus on owning high quality companies. When it comes to even bear markets, I was actually reminded of this past week.
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I was thinking, this is my daughter was maybe what, two years old at the time. And I wrote a piece entitled, Don’t Feed the Bears. And for whatever reason it may be, my daughter, Aspasia was afraid of bears. I, I don’t know why she didn’t like bear in the big blue house. There was a song at nursery school. We’re going on a bear hunt. She was afraid of that. Didn’t like bears. Didn’t make any sense because she’s pretty much not afraid of anything. But anyway, you take a look.
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at the utter futility of timing markets. It makes no sense. You take a look at the opinions that were being batted around when it comes to some of the big name companies when they were down this past fall and they could fall much further, sure they could. But again, I’m not investing for the next couple of months. We don’t do that.
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here at Markowski Investments and nor should you. Nor should you. Stocks make great, fantastic, super long-term investments if you own high quality companies. Short-term, short-term, you might as well flip a coin.
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That’s what we try to get across, but conventional wisdom, if you watch the business networks or what these people are trying to get across to you is that they know what’s gonna happen over the short term and you can profit from it. I remember back in the day, back in the CNBC, CNBC at four o’clock, this was back in mid 2000s, 2005, six, seven, eight, it’s four o’clock. Do you know where your money is? Oh, come on.
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Come on. All of the time, all of these people that are paraded around is knowing what the hell they’re doing. They don’t know a damn thing. I’ll tell you, quick story. Here’s a true story. Oh, geez, had to be about 2004, 2005. We get a phone call from this investment firm that was in Venice, Florida.
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And this guy wanted to retire, wanted to retire, wanted to meet with us, see if we would take over his business, purchase his business. Didn’t really know much about this guy, couldn’t find out much about this guy. So we went and we met with him. And again, I wasn’t really impressed what this guy wanted to do. He wanted us to remember, he wanted us to keep his kids on the payroll.
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that basically didn’t do anything. And I’m kind of like laughing on the inside when he’s telling us this, but then he proceeds to tell us a story. And again, this is like, all right, can I get the hell out of here right now? He was bragging about the time, bragging about the time that he decided this was in 1987. 1987, he wanted us, he started some mutual fund at that point and was getting his registration.
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taken care of back in 1987 and takes a while you’re dealing with the government and all he raised all the money for the fund and it was just sitting there in cash and What happened in October 1987 crash bang boom huge market crash Isn’t this guy highlighted as being one of the best portfolio managers? In the country. How did he know he was up the fund managers that were all in cash. What did they know?
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He didn’t know a damn thing. He would have been fully invested, but he ran with it at the time, even though it was a complete fugazi. I’m here to tell you, did I know that Apple was gonna be where Apple is right now last fall? No, no. But I have a pretty good idea that Apple’s gonna be much higher five, 10, 20 years down the road.
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And if I disagree with that assessment, well, then I’m gonna make some changes. I talked about this yesterday in the podcast, when it comes to the hamster wheel that exists that people love to go on. I’m gonna give you a quote by a, this guy was a financial planner, does a lot of writing on the topic. And it’s unfortunate that many planners don’t listen to what he has to say. This guy by the name of Nick Murray. Forecasting the market.
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appears to be a vicious cycle. But like all addictions, it turns out to be a downward spiral. And I wrote this. Market chasers are no different than casino gamblers. Eventually, he or she will leave all of their money at the casino no matter how long it takes, or no matter how often he or she is momentarily right. I’m no mathematician, but
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If one keeps sitting at the blackjack table or keeps pulling the slot lever, that person will be broke, busted, and disgusted. Jonathan Clements, former writer for the Wall Street Journal, stocks will make fantastic investments over the next 30 years, if only we can get through tomorrow. We take the market’s decline and we extrapolate it into the future. We fret feverishly over our losses, even though the Dow and Just Reels are still up. Take a look.
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Where were they? 10 years, 20 years, 30 years. The markets over time, and again, there’s times where the markets don’t really make any sense whatsoever, will reflect the growth of the world’s leading companies in the most innovative, flexible, and transparent economy on the planet. And we still have that. We still have that.
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If you’re paying yourself people, if you’re paying yourself, if you’re investing on a regular basis, we talk about the concept pay yourself every single month and you don’t care about the market direction, you’re going to be fine. I know there’s periods of time, oh my God, the sky is falling, world’s going to end. Oh no. What are you going to wish?
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How many of you out there, how many of you out there sold, sold everything, everything in 2008, 2009? How many of you now wish you were out there buying as much as you possibly could of the highest quality companies? Same thing during the pandemic. Any different? Has there, have I ever been wrong on this?
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Outperforming the overall markets is something you can do over time, over time, not over the short term. I know the people on TV, they’re going to tell you they’re incapable of doing it over the short term. They’re not. I’m not a stock picker. We’re not stock pickers at Markowski Investments. We’re not mutual fund handicappers. And I’m most certainly not a fortune teller. We’re called financial planners, coaches.
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Uh, you know, I don’t know, call us whatever you want. We deal in reality here and we understand the truth about our profession. We understand, I understand fully what we can do for people, but I also understand what our limitations are. There’s not a soul alive. Well, they, they’ll tell you how bright and how smart they are. Not a soul alive that can tell you what.
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the markets are going to where they’re going to go what they’re going to do how a stock is going to trade over the short term period the end
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They don’t exist.
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Anyway, you take a look, take a look again. I’m gonna talk about all the conflicting data that you’re getting right now. But Chris, but Chris, what about this? What about the S&P? Oh, there’s been a few companies that have led along the way. Yeah. But can you take advantage of that? I don’t know if I mentioned this yesterday. If you were to take out the 50,
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50 of the highest performing stocks in the S&P 500 during this current bull run. And you were to look at the other 450 S&P stocks. You know what those other 450 S&P stocks, you know what their multiple is right now? 15 times earnings. Cheap!
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cheap, dirt cheap. Do you think that maybe at some point in time, the multiples will come up on those, which should be, traditionally, 18 times earnings? What do you think that’s going to do? You don’t think that the breadth of the market will expand? We do. I don’t know if it’s going to happen over the next month or two, but it’s going to happen.
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It’s going to happen and it’s going to improve. More money is going to continue to flow into some of these high flyers, but money is going to flow out and it’s going to be reallocated in other sectors. Something that we have explained here. Constantly, the whole idea of cutting and snipping and taking profits and reallocating assets. I mean, I’ve got, I can go over all of this.
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all the information that I have here, all of the economic data. And I can make an argument. I can make an argument for you. And it’s unfortunate that, again, this is people, you can apply this to politics as well. There’s a quote from F. Scott Fitzgerald. And I wrote it down because I wanted to get it right. The test.
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of a first rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. Okay, I can take, I can take everything that I have, all of this data that I have, all this economic data that I presented to you and I could give you a reason why the market’s going to go down and a reason why the market’s going to go up. So what am I going to do?
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Am I going to, am I going to can, am I going to be in Dr. Seuss’s, the waiting place, waiting for an all clear, wave all clear up there, go the clouds, the clouds are never going to go away. There’s never a clear picture in regards to where the markets are going to go. I mean, there’s times, for example, where I’m able to isolate a company that I know is BS.
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that I know is ridiculous, or an entire segment of our economy that I’m like, this is ridiculously overvalued. We warned everybody about what was happening with real estate back in 2006. We were warning people, stop doing this, stop going out and buying pre-construction condos. This is not gonna last. We warned everybody during the dot com run up, what was going to happen? What was going to happen?
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There was gonna be a fallout. We warned people about Enron and Dynagy and Worldcom, Enron in particular. I’m looking at this company and I said, this is ridiculous. But, but granted, when I put the column out, when I wrote the column understanding Enron, which was 2000, excuse me. Wow, showing my age. It was 1999.
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the stock went much higher. The stock went up, continued to go up until it didn’t.
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Until it didn’t and I knew the fundamentals were a mess and eventually stocks are going to trade companies are going to trade for what they’re worth. So again, did I did I short the company there? No, why didn’t I? Why didn’t I short the company? Well, again, shorting can be expensive. It can be very expensive if you have to pay interest over a period of time and you got to do margin calls when you’re wrong. Oh, sure. You can when you hit it right.
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You can make a fortune when the thing collapses, but that’s again, that’s not what we do. If you own quality, yes, sometimes you have to wait. Sometimes it takes time. But again, I say it every single week, week in, week out on our radio show, everything in life that has meaning, value and worth work, time, and effort.No exceptions. Watch Dog on wallstreet.com.
