Category Investing Lessons

A Foolish Forecast

The business of forecasting is very difficult... what I think is a fool's errand. But when it comes to forecasting the economics of 330M people - their behaviour - and the specific impact on stock prices - it's near impossible.

Trees Never Grow to the Sky

Over the past three decades - I've developed a strong appreciation for market cycles. For example, I know that it's impossible to predict the future with any certainty. However, what I can do is prepare based on what I know to be true.

The Pendulum Swings

When things are going well and prices are high, investors rush to buy, forgetting all prudence. Then, when there’s chaos all around and assets are on the bargain counter, they lose all willingness to bear risk and rush to sell. And it will ever be so - Howard Marks

Markets Big Bet on a Dovish Fed

The S&P 500 is pushing into an area of clear technical resistance. What's more - fundamentally it's no longer cheap at approx 18.5x forward earnings. My thinking is the market is not an attractive risk/reward bet at these levels... and are under-appreciating the task in front of the Fed.

The Bull vs Bear Battle Lines are Drawn

The bulls have market momentum supported by solid breadth. We are past peak inflation (it would seem) which lends itself to a more dovish Fed (in theory). However, valuations are high - trading 18.5x forward. What's more, the Fed is withdrawing liquidity - not adding to it. That's an argument for the bears.

Remain Vigilant When Adding Risk

Over the next few weeks we will hear how US companies navigated a difficult Q2. More importantly, we will also receive guidance looking forward. This will lead to analysts lowering their earnings targets... something the stock market is yet to price in.

Here’s What We Still Need to See

There are three primary things we still need to see before we can confidently claim we are close to a market bottom in 2022... the first is a pivot from the Fed.

Bear Market Lessons… and is Property About to Plunge?

Be careful of any bear market rally - they are usually quite sharp. This post looks at the numerous "10-20%" rallies we saw during 2000 and 2008... and outlines what we need to see to know the bottom "is in"