Portfolio Update: You Can See the Confusion in the Markets
Markets are Catching on to What We Already Know
It has been a month and a half since the markets have bottomed and I think it’s spreading widespread confusion to many market participants. For many readers of this Newsletter, we already knew what was happening and why we bottomed. Posted on May 21st, it was becoming clear that we did bottom on individual stocks on May 12th with the indices bottoming just a month later.
Kinda like how the top was called in stocks on November 10th.
How Could it Have Been so Obvious Looking Back?
Hindsight is always 20/20 with so many investors attempting to time market tops and market bottoms. It seems simple with principle, right? Buy low, sell high. However, it turns out it’s not always that simple.
What investors must understand is that market’s move on 4 key principles. Knowing what to look for is what I try to offer in my weekly Newsletter. The goal is always to break through the noise and get research that is sometimes contrarian, without attempting to be contrarian. Data is what drives the best decision making and taking an unemotional approach is what’s key.
In this Weeks Newsletter We are Going to Cover:
The Four Factors that move markets and applying those today to analyze markets
Portfolio Update (more and more positions turning green!)
Four Factors that Move Markets
Years of analysis have led me to break down exactly what and why markets move. From both a short and a long term perspective, I have come to find that by combining all of these market moving forces together, we can truly understand as independent investors why our portfolio’s are moving. Could we trade on it? Sure, but that’s not my approach. I look at everything in the markets (and sometimes in life) as a cycle on both a cyclical and secular basis. To really simplify the difference between the two we can look at it as something we experience every day:
Cyclical Forces are a lot like the seasons we experience every year. They are temporary and usually happen over shorter cycles.
Secular Forces are the constants that move the cyclical forces in a direction. This is a lot like the Sun rising and setting every single day, as well as how the Earth rotates and spins. The Suns existence and the Earths rotation create the seasons that change.
From the seasons to the cycle of life, everything exists in a cycle. Everything must begin and everything must end. This principle can directly be applied to the markets.
Four Forces Explained
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