What Bubble?

JC Parets
October 17, 2021

I agreed to give a presentation Saturday morning about Crypto Currencies.

But if you've seen me walk through my charts in the past, you know I have a hard time sticking to one asset class.

If we're talking about stocks, how can we do that without talking about the bond market?

If we're talking about Commodities, how can we have a serious conversation without including interest rates?

And if we're talking about Crypto Currencies, how can we not include the bank stocks with Crypto exposure, who are benefiting from both rising crypto prices AND rising interest rates?

Well, that's what happened Saturday morning.

A conversation that was supposed to be about Crypto, turns into an all out blitz of rising asset prices due to an asset shortage that we're seeing worldwide.

The reason risk assets are going up in price has nothing to do with the economy, or the federal reserve or who the president is....

Risk assets are going up because there is more money being allocated to stocks and commodities than there is supply of stocks and commodities to feed that demand.

So for many reasons, I think it's irresponsible to not be buying stocks and commodities in this environment. As we laid out in our Quarterly Report.

You guys following along know this as common sense. It's just price.

So when I hear someone tell an audience that the only responsible thing to do is to be short stocks and buy zero coupon bonds, I'm not going to bite my tongue.

I'm going to tell it like it is.

I really don't care.

I'm too old to worry about people's feelings.

We're here to make money in the market. Period. It doesn't matter whose feelings get hurt along the way.

If you're too sensitive, you should see a therapist, not worry about what I have to say.

And if you want to tell people to short stocks and buy zero coupon bonds, be my guest.

That's your problem and the problem of your audience.

We're happy to take your money. Thrilled about it, in fact.

You see, stocks have been correcting for most of 2021. If you're still waiting for a correction, it must be because you're looking at charts with your eyes closed.

The average nasdaq stock fell 30% this year.

Half the nasdaq stocks fell over 20% this year.

And over 20% of nasdaq stocks got cut in half this year.

If you're waiting for a correction, where have you been?

Here is the Value Line Geometric Index, which represents the median stock price change. Notice how it hasn't done anything this year:

What bubble?

Stocks have made little progress in almost half a decade. And we're just talking about US Stocks. If you move internationally, you'll notice just how many stocks are still below their 2018 highs.

None of these things are characteristics of bubbles lol....

So if you're a permabear, I don't feel any sympathy for you.

If you're angry about the way the world works and you let that affect your decision making in the market, why should we feel bad for you?

Just because some people are too weak to overcome their ego, and choose to ignore price behavior, why should we not take their money?

Personally, I'm happy to accept their donations.

And for that, we're thankful.

NEVER TAKE IT FOR GRANTED

Being a market participant is NOT a right.

It is a privilege.

Do not take it for granted.

For those of you here 30, 40, 50 years.... mad respect!

I can only pray that I can make it here that long.

I'm currently working on 20 years and I have the scars and gray hairs to prove it.

It's part of the challenge.

And if you let your ego get in the way of making money, you're in a lot of trouble.

Perma anything is for fools.

Recognizing trends is for winners.

Letting your ego get in the way of making money is for losers.

Keeping an open mind is for winners.

Which one of these do you want to be?

It's your choice.

- JC

 

 

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