The Transparent Advisor

Well, the Unemployment Rate went from 3.5% to about 20% in a little over a month.  #PR Meanwhile, the US stock market is only down about 13% on the year.  If there was ever any confusion, the stock market is not the economy. The stock market is a reflection of forward looking expectations of future cash flows of the largest publicly traded companies.  Howard Marks likes to say "Most great investments begin in great discomfort."  There has been a great deal of discomfort in this time, and it will be many months and perhaps years before we know the full impact.  Let's hope that we can get everyone safely back to work in a timely and responsible fashion. Here are 5 good things to read: Making Sense of a Stock Market That Doesn't Make Any Sense  by Ben Carlson Who Pays for This?  by Morgan Housel Is Inflation Coming Back?  by Michael Batnick This Time Truly is Different  by Carmen Reinhardt Different Strategies for Putting Cash to Work in a Bea

by Danno We caught a nice bounce in the stock market the past 3 weeks, S&P 500 is +27.3% on the bounce as of the close on Tuesday.  Much more enjoyable than the 35% drop in the 5 weeks prior.  That'll tend to happen when the Fed & the Treasury throw 6 kitchen sinks at a problem.   It's good to be the controller of the global currency. In a 2-3 week period, they've done many multiples of what they did in all of 2008 and 2009 to save the system. The Fed be like: James A. Garfield (later, President Garfield) is credited with saying, "He who controls the money supply of a nation controls the nation." Like health care professionals, engineers, tech developers, and every other area of professional expertise, the central bankers of the world are learning and evolving.   The Fed was created in 1914. Before that, it took the United States over 140 years, numerous iterations, and dozens of brutal recessions to settle on a sustainable central banking mod

by Danno A couple weeks ago the market was in pure panic mode, and things were all moving the same direction at the same time... Down!  When markets do whatever it is that they do, I like to slow down, look under the hood, and to try to understand what is actually happening sector by sector.   The S&P 500 is comprised of the 500 largest publicly-owned companies in the US.  You can separate those 500 companies out into the 11 sectors of the economy.  Here are the official 11 sectors, the % of the S&P 500 that they comprise, and their 15 largest firms in order as of 03/31/2020: US LargeCap stocks (S&P 500) made an all-time high on February 19, 2020, and we made a short-term bottom on March 23rd (we don't know yet if that was THE bottom, don't act like you know for sure).  Here is a graph of how these different sectors performed during that time: It's not surprising that Consumer Staples and Health Care have held up relatively well.  That's common i