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“There seems to be some perverse human characteristic that likes to make easy things difficult.”    Warren Buffett

Market Commentary:

Growth At Any Price (GAAP) is a bad strategy. Valuation matters.

• Commodities rolling over, US manufacturing in contraction, and recession expectations are heighted for good reasons.
• The current leadership in the market is clearly not tech, or the Magnificent 7. Defensive sectors- food, utilities, insurance are doing well but not much else.
• The number of 52- week low count exploded last week and now shows stormy conditions again. The Advance/decline rolled over on the NYSE, the NASDAQ looks outright awful.
• Growth at any price is a bad strategy and leads to disappointment.
•  By week’s end, we will see what looks like another good entry point, but it is fine to be holding some cash.
• Get some “wish list prices” ready for your favorite ideas. You will probably get them. When those alerts go off, the news will be awful, and most people will freeze again.

Economic data and market clues:

Tuesday evenings Presidential debate will shed light on Novembers outcome.

The new jobs downward revisions are outright scary. It looks like too much of the spending is coming from the government’s deficit spending.

The Fed’s path is much more certain. Chairman Powell was clear- rates will be lowered, I think by 50-75 basis points by year end. More rates cuts are a lock for 2025 as well.

Selected current holdings:

Magnet®: 

Generac Holdings                 GNRC

Brookfield Infrastructure        BIPC

Green Brick Partners            GRBK

FACTS:

Amgen                     AMGN

Allstate                     ALL

Boston Scientific      BSX

For more information, contact us.

More By This Author:

The Market Leadership Has Changed, Be Open To New Names
It Is Time To Be Selective, Not Bearish
ProInvestor Insights - August 2024