Sitting here on day two of a power outage that might stretch for several days more. The straight line wins that came across Iowa took out about a third of the trees and rather more than a third of the power lines in the area. Our entire end of town is being affected by a major transmission line that went down. They're guessing two to three more days before the lights are on. Augustana, across the river, is also without power and under a boil order. I'm afraid that a major purge of the refrigerator needs to commence.
All of which is slightly relevant because I don't have internet access or a computer. And pretty much limited to a trickle of mobile data which explains why the formatting of this node might be a bit shoddy. Regrets for that.
I've probably interviewed six managers in the last six weeks or so. Today Leuthold posted a note on market sentiment and valuations, both of which they find to be irrational. The last paragraph of their note is a virtual word for word restatement of what every single manager, equity and fixed income, but I've interviewed has said.
For what that's worth, David
"Market valuations and investor sentiment are right back to the dangerously high levels that informed our market caution in January and February. That's remarkable because those levels reflected a high conviction that the economic expansion could continue indefinitely. Today, with the economic and earnings outlook as uncertain as it’s been in perhaps 80 years, valuations and sentiment have snapped back to those frothy levels. And arguably, the situation for a multi-asset investor is considerably worse than six months ago because the fixed income alternatives are even more outrageously priced.
The Fed is overtly trying to crush every investor with a cautious stance, but that doesn’t mean a degree of caution is not appropriate."