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“If I had eight hours to chop down a tree, I’d spend six hours sharpening my ax.”                           Abraham Lincoln

Market Commentary:

The markets are ignoring risk, but that does not mean you should...

• Tremendous activity in the bio-tech sector. I would not have any shorts here. Look for a slew of merger activity. I am ready for one.
• Anyone who relished the 5% yielding CDs while waiting to get back in lower is now faced with rolling over at 3%.
• Most momentum indicators are gaining strength. Do not blame the market for any underperforming ideas in your portfolio.
• The Advance/decline on the NYSE hit a new high, the NASDAQ snapped back. The 52-week new-high/new-low numbers look even better.
• The infrastructure buildout is an established and much talked about trend now. It is real and there are a dozen market leaders in this area. The problem is most names are currently over-bought.
• It is Fall clean up time. Sell lagging and sagging companies. Only strong and healthy companies belong in your portfolio.

Economic data and market clues:

The Fed’s path is much more certain. Do not worry about the 50 basis point they made as concerning, they were late moving, and they knew it.

Fed Chairman Powell is now clear. Maintaining a restrictive stance right now makes no sense and the Fed understands that.

Short term interest rates will go lower, I think by another 150 basis points by the end 2025.

Maybe it is time to stop focusing on The Fed and own shares in the best companies in the best sectors?

Selected current holdings:

Magnet® :  Lots of actionable ideas right now.

ACI Worldwide                       ACIW

InterDigital                              IDCC

GeneDX Holdings                  WGS

FACTS:

Generac                                 GNRC

Green Brick Partners             GRBK

Leidos Holdings                     LDOS

For more information, contact us.

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The Momentum Is Building, The Markets Are Strong - Just Don’t Chase After Extended Winners
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