The end of the year has shifted into the beginning of the year, and with this new fresh spirit, we find the last four years have presented the following.
This has created a real sense of excitement, enthusiasm and hope for the future, right?
In fact, we find ourselves so impacted by division, polarization, despair for the future, and doubts about owning stocks, it is amazing that stocks have moved up so dramatically. I was intrigued by the fact that savings accounts have ballooned in the last four years, rising from a total of $4 trillion to almost $7trillion today, and they are paying us NOTHING. I can scold you all day long for this pessimism, but I find my own "savings account" has more money in it than ever before.
So, we're all impacted by this intense myopia with the problems and not considering the opportunities. One of my life heroes has been John Templeton, and I should have this next statement tattooed on my forehead, since this age-old truth is more obvious today than any time since...1974, or maybe 1982 in my lifetime.
"Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria."
"The four most dangerous words in investing are...this time it's different."
Don't you think that would look good on my forehead? Mr. Templeton's statement started me down the road 43 years ago of pegging my investment strategy on the level of investor psychology, as I tried to go with the traditionally smart investors, and against the historically dumb investors. Of course, this further developed over time into my 3-pronged approach, which evolved even more as computer technology gave me the chance to back-test this approach for 100s of observations to see exactly how it all fits together. With this evolution and the evolution of the market trading and monetary instruments, today's reliance on the evolving condition of Psychology, Monetary and Valuation, in my opinion, is more reliable than ever in my career. So here's where we stand on this Monday morning.
Our outlook hasn't changed since last week; however, we'll continue to provide updates on the evolution of this process.
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