Always enjoy reading Jack Hough’s regular Barron’s column.
”Brace for stimulation. The Federal Reserve just slashed interest rates for the first time in four years to goose the economy. Already, young families shopping among seven-figure teardowns near city centers can finance them at 6.1%, down from 6.5% a month ago. Housing crisis solved.
“Next is supposed to be a rip-roaring stock market rally, as falling rates spur company profits and reduce the relative allure of bonds. I'm thinking about celebrating with something only rich people can afford, like dinner and a movie.”
Article - ”The Stock Market Is Priced for Middling Returns From Here On”
Barron’s September 23, 2024
Author: Jack Hough
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A more sober note from Dennis Jean-Jacques, founder and chief investment officer of Ocean Park Investments:
”We are in a more fragile state than when interest rates were near zero and the world was largely at peace. Today, while the market is at its highs, there is significantly more uncertainty—given war in the Middle East, China’s property troubles, and the coming U.S. election. Household allocations to equities are at record levels, which makes us uneasy. Credit spreads are historically low, reflecting a perception of reduced risk.”
Article - ”This Money Manager Likes Durable Businesses. 4 Industrial Stocks He’s Got His Eye On.”
Barron’s September 23, 2024
Author: Reshma Kapadia
Comments
ISTM I’ve come across a couple other money managers the past several months who echo Dennis Jean-Jacques‘ assessment (nearly word-for-word). But, don’t recall the sources. Possibly, they all originated from him. He’s not telling people to panic and sell. But he has some thoughts on portfolio positioning. And, he pretty much says “Do nothing.” However, his own (managed) portfolios tend to hue to a long-short approach, netting him slightly positive. Believes there will be some good buying opportunities down the road.
D. Jean-Jacques has a point. We are in a new Cold War: China and Russia. And there are hot wars in various regions, too. A lot of Africa is an eternal hot mess. Look at Central and South America, too. Even our own gov't is extremely partisan, divided. No less than before the Civil War. Positions and offices are being weaponized to help Party ideology, rather than serving the public. I watched a biography on tv last night about John McCain. He is sorely missed. I betcha he and Bernie could get stuff accomplished together, if the others would just LISTEN and be reasonable. But reasonableness got thrown out with the trash quite a while ago.
Fear is not an investment strategy.