The omens are getting worse. By the time it will all be over, we’ll be in a recession and stock prices will be even lower.
It makes little sense to own much — if any — stock now.
The reasons? Oil. Inflation. Higher prices for everything. Corporate closures. Endless war, etc.
“There’s always a bull market somewhere.” We hear that often.
But sometimes there isn’t. We’d hoped for energy stocks and crypto. No such luck. I’d hoped for “situation” stocks like Ford and Honeywell. Not now. So today, we have UNH and TSCO (Tractor Supply). Eye your stocks for two criteria — they’re down more than 15% from their recent high: and their present valuation makes no sense based on no earnings or an astronomical P/E.
A few years ago, Buffett gave five of his best bits of investing wisdom:
1. Investing is a long game. Now if you think you can dance in and out of the market and buy and sell stocks, then go Las Vegas.
2. Diversify. To protect your money, buy stocks in various different kinds of companies and spread your purchases out over time.
3. Stocks are now generally better than bonds. “If you save money, you can buy bonds, you can buy a farm, you can buy an apartment/house — or you can buy a part of an American business,”
4. You can’t time the market. “You’re making a terrible mistake if you stay out of a game that you think is going to be very good over time because you think you can pick a better time to enter it,”
5. There’s no room to be emotional. “Some people should not own stocks at all because they just get too upset with price fluctuations. If you’re gonna do dumb things because your stock goes down, you shouldn’t own stock at all,”
Joel Ross in his latest Ross Rant newsletter talks of certainty and writes:
If it makes you feel better about your own uncertainty, Moody’s Analytics admitted this week that for the first time the world is so uncertain, they have little confidence in their own models. They are running three models, and have no idea which might be even close to right. That means nobody has any idea where the economy or the stock market is headed, but Moody does say 2022 will be a bad year. They just do not know how bad or terrible it might be.
The Economist writes;
The omens are bad for the world economy. When oil prices surge, growth typically moves in the opposite direction. Sometimes the price shock begins with a political earthquake, like the Suez crisis of 1956. Sometimes oil producers deliberately create the shock, as with the opec embargo of 1973. And sometimes the culprit is soaring demand, such as when oil prices hit record highs in 2008. The common denominator in all these cases is that America and most other rich countries soon enough faced recessions.
So it would hardly be surprising if the current surge in oil prices—a doubling in three months, fuelled by Russia’s invasion of Ukraine—foreshadows a sharp downturn in growth. Pictet, an asset manager, counts six episodes since 1970 in which real oil prices rose by more than 50% from their previous trend; each preceded a recession. As of late February oil prices had already surpassed this 50% threshold, and have only climbed higher since then.
Why does Putin want Ukraine?
I’ve been mulling Why Did Vladimir Putin Invade Ukraine? The most written explanation: he wants buffer territory between him and NATO. He does not care about winning the hearts and minds of the people. He wants territory. It doesn’t matter what condition it’s in. Here’s a map from Gatestone. It’s headed Russia’s proposed Eastern European Buffer States.
He’s willing to destroy every thing so long as he can claim the territory as his. To remind you, this is what he did to Grozny, capital of Chechnya. Nothing left.
This is what Ukraine will look like when he’s finished bombing, shelling, mortaring and sending in cruise missiles — if we let him.
If you know anyone in Washington, explain to them that if we lose Ukraine, we’ll lose much of western Europe.
Things I don’t like
+ Russian soldiers are shooting Ukrainian civilians and looting their homes.
+ A woman holding a blank sheet of paper was arrested in Russia as part of the free-speech crackdown.
+ The Dollar Tree chain of stores now charges $1.25 an item.
+ Gas is approaching $8 a gallon in some parts of the U.S.
+ Tens of thousands of Russians are fleeing Russia out of fear. Putin believes the country will be better off without them.
Gloom and Doom be gone
Here’s the best Jewish jokes from this wonderful book:
Mrs. Finkelstein gave her son two beautiful neckties when he left for college. When he returned home on summer vacation, he wore one of the ties to show his appreciation for the gift.
Mrs. Finkelstein took one look at her son and asked anxiously, “What’s the matter? The other tie you didn’t like?”
++++++++++++++++++++
Man goes to a psychiatrist and complains, “No one listens to me. No one talks to me.”
Doctor says, “Next!”
++++++++++++++++++++
“You’re in great shape,” the doctor says. “You’ll live to be 70.” “But, doctor, I am 72,” says the patient.
“Nu?” the doctor replies. “Did I lie?”
++++++++++++++++++++
Doctor: “The check you gave me came back!”
Shlomele: “So did my arthritis!”
++++++++++++++++++++
A faith healer asked Moshe how his family was getting along.
“They’re all fine,” Moshe said, “except my uncle. He’s very sick.”
“Your uncle is not sick,” the faith healer said. “He just thinks he’s sick.”
Two weeks later, the faith healer runs into Moshe on the street.
“How is your uncle getting along?” he asked.
Moshe shrugged, “He thinks he’s dead.”
+++++++++++++++++++
A matchmaker, singing the praises of a female client, brings an eligible young man to see her.
He takes one look at the woman and whispers to the matchmaker, “You said she was young, and she’s 63. You said she was beautiful. She’s ugly as sin. You said she was shapely, and she’s big enough for two, you said … “
“You don’t have to whisper,” says the matchmaker. “She’s also hard of hearing.”
+++++++++++++++++++
Please send money to help Ukrainians:
+ The World Central Kitchen. Click here.
+ The International Rescue Committee. Click here.
That’s it for today. At some stage this market will turn. It always has. For now, it’s major ugly.
–– Harry Newton
