“Behind every stock is a company. Find out what it’s doing.” – Peter Lynch
Most of the skeptics have taken the wrong path right from the beginning of this crisis. They simply underestimated the digital world we live in today. Their heads were wrapped around the number of restaurants that were going to close, the movie theaters that would stay empty for months on end. They saw barren shopping malls, casinos, stadiums, and arenas that were void of mass gatherings.
It is a sad day when we start to realize the number of small businesses that will never again open their doors. Other areas of our economy will be changed for a long time perhaps forever. All the result of shutting down the economy in what was perceived to be “best for all”. I wouldn’t want to be the one to tell that to the small business owner that is now bankrupt, but I digress.
What the naysayers missed was right in front of everyone’s eyes. Some saw it plain as day while others measured everything compared to what happened in past years and decades. People are understandably attached to the world they know and the strongest resistance to new ideas is often found among those with the most “expertise”. Sorry if that offended some in the audience. They heard the word recession, remembered the Great Financial Crisis, saw a deep cavern, panicked, and assumed the worst.
No one wanted to realize that this time was different. This recession wasn’t caused by a systemic issue, and the consumer wasn’t leveraged to the hilt. The exact opposite was true. This was a Health event. That in itself is a huge difference. The consumer was in great shape before COVID-19 surfaced with household balance sheets de-levered and strong. That was due in part to an economy that among other positives had a 3% unemployment rate.
A close-minded approach to investing is always costly; this time it was devastating to many. The digital world that allowed certain areas of the economy to function uninterrupted stepped up, went into overdrive, and simply overwhelmed the “old economy”. The change was so swift many were simply frozen in place like deer in the headlights.
Companies changed right in front of our eyes. This is a unique time for the U.S. and the world. The ingenuity and the genius of the corporate world are on full display now. Fast food franchises went to pickup and delivery. Big box retailers became your best friend by delivering products and necessities right to your front door. Yet all investors heard from the pundits was how many restaurants would never open again, how many brick and mortar businesses would close.
Ladies and gentlemen, the handwriting was on the wall well before this COVID outbreak, the world was already in the midst of a technological change. Sadly this virus sped up that transition and caught many unsuspecting business owners by surprise. When the dust settles from this event, the survivors will be even stronger than before.
This overall trend has led e-commerce sales as a percentage of total retail sales to reach a new peak (21%), more than double the level seen in 2010. Some companies have even recorded online sales nearly triple pre-pandemic levels. Yet the closed-minded crowd kept harping on the empty seats in movie theaters and stadiums. Online retailers were already gaining popularity due to sheer convenience, but the added health benefit has encouraged more consumers to reconsider traditional shopping habits. Incidentally, this shift has benefited other industries as well, such as the air freight and logistics companies (a subsector of Industrials) that have processed this uptick in online orders.
This “New Economy” that we have discussed here week after week is one of the primary reasons the S&P 500 is posting new highs. It is why the Technology laden Nasdaq Composite has set 39 all-time highs in 2020 during a pandemic and a brief recession. That wasn’t an accident nor is it a “bubble”. That was the investment world realizing how the entire situation has changed. Equity markets respond to change, and in this case, it was a “positive” one for those sectors of the economy that will continue to grow during what is a health scare, and not a systemic failure.
U.S. stocks followed the rest of the world higher on Monday with all the major averages posting gains of nearly 1% at the open. The global rally continued as well with European equities even stronger with most benchmarks trading up over 2%. Breadth, which has been a nagging issue in the U.S. over the last couple of weeks, was stronger. In the European markets, advancing stocks outnumbered decliners by more than 9-1.
News driving global stocks higher was attributed to hopes of a fast-tracked vaccine by as soon as Election Day. Money has been rotating from sector to sector depending on the headline of the day. On Monday it was back to the “reopening” trade as the old economy stocks received some attention, i.e. Financials outperformed by gaining 2% on the day.
In the meantime stocks that are benefiting from the new economy were sold. We saw that as the Nasdaq was up only slightly (+.30%) on the day. However, that was enough for the 36th new high for the index in 2020. The S&P also recorded a new high, the 16th in 2020 as it closed at 3,431, up 1%. Both the Dow 30 and Dow Transports posted gains, up 1.3% and 1.9% respectively. All sectors except Healthcare were up on the day as the much-maligned market breadth turned around and was positive as 412 stocks in the S&P 500 finished with gains on the day.
There was no turnaround on Tuesday as the “melt-up” continued. The S&P posted its 17th new high this year closing with a gain of 0.36%. Tech ruled again as the Nasdaq followed suit recording its 37th new high in 2020 and was the big winner on the session posting a gain of 0.76%. The Dow 30 spent most of the day in the red and closed with a loss of 0.21%. The market internals were also “mixed”. Precious metals were lower and crude oil rose 1.8%, moving above $43.
Another day with another double high achieved for both the S&P and the Nasdaq. The S&P posted its 18th new high gaining 1%, while the Nasdaq recorded the 38th new high in 2020, up 1.7% on the day. Small caps lagged closing down 0.7%. Overall market breadth was weak, as a bifurcated market session was very evident. It was once again a day dominated by Technology and growth. Communications services led the way, gaining 3.4%. Energy, Financials, and Utilities lagged.
As fast as you can say Thursday it was back to the reopen trade. Four trading days this week, four new highs for the S&P, number 19 in 2020. The ongoing rotation may be nerve-racking for traders but is a healthy sign for the markets. The Financial ETF (XLF) led the way with a 1.8% gain. Healthcare was sold off the day before but rebounded nicely up 0.80%.
Among the indices, the Dow 30 (DIA) was up 0.65%. Dow Transports (DJT) were up 0.71%, and the S&P 500 (SPY) was higher by .20%. The move out of growth saw the tired-looking Nasdaq Composite (QQQ) lose 0.34%. Small caps (IWM) bounced back gaining 0.45%. Overall market breadth was improved.
Friday capped off a big week for the BULLS. The S&P 500 was positive every day this week, making five new all-time highs in the process bringing that total to 20 this year and running its winning streak to seven straight days. The 0.60% gain for the Nasdaq Composite was enough to post its 39th new high in 2020. The Dow 30’s 0.57% gain pushed it into positive territory for the year.
Strength was seen across the board with every sector higher on the day as investors added positions to the “reopen” theme along with the “new macro economy” winners. The week ended with all of the major indices solidly in the green as the rebound rally continues to defy the skeptics.
Chicago Fed’s National Activity index fell -4.2 points to 1.2 in July after June’s 1.1 point gain to a record peak of 5.3. Those follow the 22.2 point bounce to 4.2 in May from the historic low of -17.9 in April. The three-month moving average improved to a record high of 3.6 last month from June’s -2.8, with May at -6.0. The -7.4 print in April is the new low. According to the report, 56 of the 85 indicators made positive contributions, with 29 making negative contributions.
August Richmond Fed’s manufacturing index jumped 8 points to 18 after rising 10 points to 10 in July. It plunged to a record nadir of -54 in April. The shipments index slipped to 22 in August from 23. The employment component firmed to 17 from the prior -3 print. The new order volume rose to 15 from 9. The prices paid component was 1.62% from 0.93%, while prices received were 1.43% from 0.45%. The six-month business activity gauge dropped to 33 from 57, with employment easing to 23 from 28. The future order volume index tumbled to 13 from 29. Prices paid were 1.91 from 1.97%, and prices received were 0.81% from 2.07%. Capex improved to 19 from 8.
Chicago manufacturing PMI dipped 0.7 points to 51.2 to in August after surging 15.3 points to 51.9 in July as the index corrects from the declines through the spring that saw a low of 32.3 in May, which was the weakest since March 1982 (record low was 20.7 hit in June 1980). The high for the index is 81.0 from November 1973. The three-month moving average rose to 46.6 from 40.3 and 34.8 in June. While the headline slippage is a little disappointing, the index remained in expansionary territory (above 50) for a second month after 12 months in contraction.
Durable goods industries data on new orders, sales, and inventories crushed estimates with an 11.2% rise in new orders versus 4.8% expected. There has been a huge recovery in durable goods orders and shipments. What’s incredible is that this bounce comes despite still brutal numbers from aircraft-related industries: nondefense aircraft and parts have had negative new orders (more cancellations than new orders) for every month from March to July except for May.
Consumer confidence fell 6.9 points to a disappointing 84.8 in August, well below expectations, after the -6.6 point pullback to 91.7 in July. The index is now at a six-year low and below the 85.7 pandemics hit from April. The present situations index saw the brunt of the weakness, falling to 84.2 from 95.9 last month. The expectations component slid to 85.2 from 88.9. The labor market differential dropped back into negative territory to -3.7 from 2.2. It’s off the -15.7 from April, which was a six-year low, while the 38.3 from last August was a 19-year high. The 12-month inflation gauge cooled to 6.0% from 6.1%, with July’s rate the strongest since March 2011.
The University of Michigan sentiment August boost to 74.1 trimmed the July pullback to 72.5 from 78.1 in June versus an eight-year low of 71.8 in April and a 14-year high of 101.4 in March of 2018. The stabilization in the various confidence measures in July and August leaves levels that are still in expansion territory, and well above readings from prior recessions.
The 0.4% July U.S. personal income rise defied the expected hit from unwinding CARES Act payments, following declines of -1.0% in June and -4.2% in May. Analysts saw a 12.2% April surge related to the CARES Act that’s been only slightly reversed. Consumption also sharply beat estimates with a robust 1.9% July rise, after out-sized gains of 6.2% in June and 8.6% in May. Both income and consumption posted big upward Q2 revisions revealed in Thursday’s GDP report, and both entered Q3 on a much stronger-than-expected trajectory.
Seasonally adjusted jobless claims continue to hover right around 1 million as forecasts were predicting. This week’s reading of 1.006 million was down 98K from 1.104 million last week and remains around some of the lowest levels of the pandemic. However, there is plenty of improvement yet ahead as these numbers are still very elevated relative to the rest of history.
New home sales climbed another 13.9% to a 901k pace in July, the best since December 2006, after the 15.1% jump in June to 791k, and the 20.5% May surge to 687k. These are blowout numbers. Regionally, sales were higher in the West, South, and Midwest, with just the Northeast stumbling. The months’ supply fell to 4.0 from 4.6, the lowest since January 2013. The median sales price fell -1.9% to $330,600 after a 7.7% pop in June to $337,000. That left a 7.2% y/y pace, a little slower versus the 8.1% y/y from June.
Mortgage applications for home purchase continue to run some 33% above levels a year ago as reported by the Mortgage Bankers Association. Pent-up demand from the disastrous spring market and the new stay-at-home mindset combined to send more consumers rushing to either buy homes for the first time or upgrade what they already have. Low mortgage rates are only adding fuel to the fire.
Global trade is beginning to rebound. U.S. imports surged 13% month over month, while Latin American imports exploded higher by 29% month over month. Exports from the Eurozone rose 8.9% sequentially.
World industrial production ground to a halt in Q2, but total global industrial production rose 4.8% sequentially in June; that’s the biggest increase on record, similar to the gains in trade volumes.
The Eurozone (+9.4%), LatAm (+9.5%), and EM Asia outside of China (+10.7%) are the biggest gainers for June, but all major regions/economies saw increases except for Africa and the Middle East (output down 2.4%).
Germany revised Q2 GDP data, with quarter-over-quarter growth revised up slightly from -10.1% to -9.7%. The distribution of GDP was slightly different as well: while businesses cut back capital spending dramatically (-7.9% QoQ), it was much less than forecast (-12.2% QoQ). Conversely, consumers cut back further than had been penciled in (-10.9% versus -9.8% forecast).
Qualitatively, these aren’t very large changes, but, interestingly, the German economy has even further drifted towards investment instead of consumer spending in the most recent shift in data.
China’s Industrial profits reported for July were up 20% year over year, the fastest pace since 2018. That follows the 11.5% rise in June.
I have been adamant that earnings were going to come in better than most expected and that is exactly what is happening with 80+% of S&P 500 companies reporting stronger-than-expected EPS numbers this season. I believe this trend will continue as the economy continues to strengthen. Further, while the bottom-line EPS beat rate set a record this season, the top-line revenue (sales) beat rate came in at 65%.
As Bespoke Investment Group notes:
“This was not a record, but it was the highest revenue beat rate seen since the Q2 2018 earnings season. We have also discussed the importance of forward earnings guidance being raised by a slew of companies.”
After a recession, the usual pattern is for firms to enjoy both a sales rebound and expanding profit margins, which act to boost the bottom line. Margins typically widen as the extra cost from rehiring workers lags the rise in sales. I do not think it will be different this time around.
We could already be seeing this play out as 2Q labor productivity (output per hour) released last week jumped 7.3% quarter on quarter, annualized, the biggest gain since 1Q09. This simply tells us that firms are doing more with less. That is due to Technology.
The Political Scene
The headlines read:
“U.S. And China Say They Are Committed To Ensure Success Of Trade Agreement.”
So while the back and forth “public” bickering continues, there appears to be common ground that each side can deal with.
I was never of the opinion that an impasse on the next stimulus package was going to derail the stock market. So far that has been correct with new highs being made while we see no progress on negotiations. Then there is a report that White House Chief of Staff Mark Meadows says he does not expect a deal on a fifth coronavirus relief package until the end of September.
He noted that House Speaker Pelosi is likely to try and combine stimulus with a stopgap measure to prevent a government shutdown on October 1st. Meadows said he was amenable to such a move but would like to get something done faster. The late September deadline now seems to be the consensus in the market, which has been fairly sanguine about the stalemate in the negotiations and the wide gap between the White House and Democrats over the size and scope of the package.
In the meantime, there seems to be no urgency to pass a “Handout”.
The conventions for both parties are done, and the race is officially on as President Trump and former Vice President Biden will take the next two months to make their case to the American people. What was looking like a runaway for Biden just a few weeks ago has become a bit closer. Biden still has the lead over Trump, but the gap has narrowed by close to two-thirds from its widest levels in July. It’s natural for candidates to see a bounce after their conventions, and this week alone Trump has seen his contract to win the election increase by three percentage points. We’ll know soon enough if that bounce was a sugar rush or something more lasting.
Corporate CFOs believe the race is all but resolved as 75% of them believe Mr. Biden is our next president.
The economic policy symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, took place this past week.
Fed Chair Powell confirms a shift in such that the Fed “seeks inflation that averages 2% over time. This will allow price to run ‘moderately’ hotter than 2%, the prior goal, following periods when inflation has been running persistently below 2%. There was no indication of a time frame. The Fed did not set a numerical target on unemployment. The Fed said the “Committee’s policy decisions reflect its longer-run goals, its medium-term outlook, and its assessments of the balance of risks, including risks to the financial system that could impede the attainment of the Committee’s goals.”
The Yield Curve
A trading range under 1% for the 10-year Treasury note has been in place for quite some time. After making a run to the top of that range in June, then testing the lows again, the 10-year bounced off the bottom and closed trading at 0.74%, rising 0.10% for the week.
The 3-month/10-year Treasury curve inverted on May 23rd, 2019, and remained inverted until mid-October. The renewed flight to safety inverted the 3-month/10-year yield curve once again on February 18th, 2020, and that inversion ended on March 3rd. The 2/10 Treasury curve is not inverted today.
The 2-10 spread was 30 basis points at the start of 2020; it stands at 60 basis points today.
Additional all-time highs this week helped to further boost sentiment as the percentage of investors reporting as bullish in AAII’s weekly sentiment survey rose to 32.08% from 30.39% last week. That is the highest level of bullish sentiment since mid-June when it spent two weeks above 34%. Think about that for a minute. While the S&P 500 makes new record highs, still less than a third of these investors consider themselves bullish.
On the other hand, a short-term indicator of sentiment is telling us traders are getting cocky now. It seems some of the newly minted geniuses have found the “options” game to their liking. That has led to a boom in options volume with most of the increase in trading activity in these derivatives going to “call” options.
In the past that has led to a selloff taking the “experts” piling into calls out to the woodshed for a brief lesson on “investing” versus speculating. However, there remains the question of when that might occur or if we will see this situation resolve itself with sector rotation chasing out the speculators.
EIA data released this week showed crude oil inventories (excluding strategic reserves) fell by 4.6 million barrels this week which was much more than the anticipated 2.5 mm bbl draw, leaving crude stockpiles at their lowest level since April 10th.
That draw was despite rising imports and domestic production, though exports rose by an even more substantial 1.2 mm bbls/day which was the highest export level since early May. As is seasonally normal for this time of year, gasoline inventories experienced a significant decline with a draw of 3.3 mm bbls, the largest since the first week of July.
Much stronger demand played into this as gasoline demand is now at the highest levels since the middle of March. While not to nearly the same extent as the previous 22 weeks, demand remains below the average of recent years.
The price of WTI continues to trade in a very tight range since early June, closing this week up by $0.73 at $43.00.
The Technical Picture
A clear breakout is displayed on the DAILY chart of the S&P 500. Each day the index remains above the breakout zone, it adds more confirmation to the move.
Any investor can see the index is overextended now, but I’ll leave others to guess when they believe the rally will end. For anyone that has a short memory, many gurus were telling us the rally was over in mid-July. A pullback to the very short-term moving average (green trend line) can happen at any time and it would not represent a significant issue.
No need to guess what may occur; instead it will be important to concentrate on the short-term pivots that are meaningful. However, the Long-Term view, the view from 30,000 feet, is the only way to make successful decisions. These details are available in my daily updates to subscribers.
Short-term views are presented to give market participants a feel for the current situation. It should be noted that strategic investment decisions should NOT be based on any short-term view. These views contain a lot of noise and will lead an investor into whipsaw action that tends to detract from the overall performance.
The chart of the Nasdaq composite is posted once again to drive home a point. When someone starts telling investors when to get out of stocks during a strong uptrend they are playing a fool’s game.
Over the last five days, the seven-day moving average for coronavirus cases, positive test rate, hospitalizations, and deaths have all made new lows here in the U.S.
In what can only be called too little too late, the Wall Street Journal reports something that has been mentioned here for the last four months. Lockdowns were not the way to proceed during the COVID health scare.
Take a moment, step back, and reflect on how this country would have navigated the coronavirus scare WITHOUT big tech. FAANG and many others are THE reason the economy maintained its balance during the lockdowns.
Individual Stocks and Sectors
The Dow 30 Industrials is getting a major facelift. Standard & Poor’s, the firm responsible for maintaining the composition of the Dow Jones Industrial average, announced the most significant reshuffling of the index since 2013 that will take effect after the close on Monday. Salesforce.com (CRM) will replace Exxon Mobil (XOM), Amgen (AMGN) will replace Pfizer (PFE), and Honeywell (HON) will replace Raytheon (RTX).
The changes will take effect at the open on August 31st and will also coincide with Apple’s (AAPL) 4-1 split. In the table below, we see the Dow as it now stands with each component’s weight in the index and how those components and weights will change effective 8/31.
The biggest change effective 8/31 will not even involve one of the components being added or removed. Because the DJIA is weighted by each company’s share price, once AAPL’s split becomes effective, its weight in the index will drop from 12.20% down to 2.99%. This is an interesting shift because so far this year AAPL’s 71% gain has had a positive impact on the DJIA of 1,455 points. After the stock splits, AAPL’s total weight in the index will only be 2.99% or the equivalent of 846 points.
Stock splits may be meaningless in terms of a company’s fundamentals but for a price-weighted index like the DJIA, they can have a large impact. That and the fact that the index only has 30 components is one big reason why much less money is indexed to the Dow than the S&P 500.
Besides the AAPL split, the other notable aspect of the index reshuffling is that the average share prices of the stocks going into the index are four times higher than the ones going out. As a result, AMGN will go into the index with the third-highest weighting, CRM will have the fifth-highest weighting and HON will be the ninth highest-weighted component.
After next week’s changes, there will also be some significant shifts in sector weightings for the DJIA. Technology will still have the largest weighting at 23.1% but will still see its share of the index decline by the largest amount (4.6 percentage points). Behind Tech, Energy is the only other sector that will see its weighting decline by more than a full percentage point, falling from 3.1% down to 2.1%.
On the upside, Healthcare’s weighting will increase by 4.4 percentage points, rising from 14.2% up to 18.6%, while Industrials will see its share increase from 13.2% up to 15.3%. Given the fact that it’s called the Dow Jones Industrial Average, it only makes sense that the Industrials sector will see its share of the index increase. Maybe one day it will see its share increase even more or the index will change its name to the Dow Jones Technology Index.
An investor can learn from what we have witnessed in the stock market in 2020. However, it will be a matter of changing a predetermined mindset that we all start with when managing money. As the title indicates, it’s about looking at what went right. From the outset, the focus was on what was going wrong.
Now it will be whether market participants learn from this event or continue on the road with the same close-minded approach, compounding the original mistake. I say that because in my view much of what has gone right is going to continue. It’s about identifying and now following the new macroeconomic backdrop that is here. Investors who have embraced this change are a few steps ahead of the crowd.
Believe it or not, it wasn’t that difficult to pick up on this change. The stock market was telling us that. The technology-laden Nasdaq Composite was shouting at investors to look at the opportunities by making new highs after new highs during a recession caused by a health scare. Instead, the crowd called it a “bubble”. All we heard was “The stock market has decoupled from Main street”. Did it? Ask yourself what sector kept the lights on, the trucks rolling, and never “closed” during the lockdowns?
That is all too common among investors. When it can’t be explained and the stock market isn’t doing what THEY believe it is supposed to do, they immediately blame “something”. It’s easy to conjure up a “bubble” than blame themselves for failure. It is NO coincidence that the people who are “surprised” and have the loudest voices now are the noisemakers who have missed the rally. They were shouting about COVID, never saw the “change” and never heard the invitation to come to join the “what went right party”.
What is amazing is that this new macroeconomic backdrop is still not being discussed. The commentary continues with the number of “cases”, a possible resurgence, and what can go wrong. It’s about why society “can’t” instead of looking at what “can” be done. Anyone that continues to “buy” into that is going to be left behind. What has been part of the dialogue here for months is finally being recognized. Society will learn to live with this virus, and it’s a HUGE mistake to underestimate the power of technology.
In the short term, there are some reasons to not get too caught up in the celebration of new market highs. After what has been a historic rally from lows to all-time highs, simple math and market precedence tell any investor that a pullback can occur at any time. A strong Q2 earnings season is now over, and the upcoming election will likely gain increasingly more attention. Investors will soon be inundated with all sorts of rhetoric regarding polls, the potential impact of each candidate’s policies, etc.
Rest assured the skeptics will conveniently forget the new highs the minute a pullback in the markets occurs. They will once again coerce investors to make the same mistake and look at what is going to go wrong. The negatives will be highlighted, and the positives diminished and tossed aside.
However, 90% of what we are about to hear from them regarding the election and many other “issues” is simply “noise”. We can expect the nervous nellies to overreact once again. That spells O-P-P-O-R-U-N-I-T-Y.
Please allow me to take a moment and remind all of the readers of an important issue. I provide investment advice to clients and members of my marketplace service. Each week, I strive to provide an investment backdrop that helps investors make their own decisions. In these types of forums, readers bring a host of situations and variables to the table when visiting these articles. Therefore, it is impossible to pinpoint what may be right for each situation.
In different circumstances, I can determine each client’s situation/requirements and discuss issues with them when needed. That is impossible with readers of these articles. Therefore, I will attempt to help form an opinion without crossing the line into specific advice. Please keep that in mind when forming your investment strategy.
to all of the readers that contribute to this forum to make these articles a better experience for everyone.
Best of Luck to Everyone!
More new market highs ahead? There are plenty of opinions around now. Of course, many of those opinions are coming from the same people that told investors they should expect to see new LOWS in the equity market.
Successful investors start at the macro level, and that is exactly why my Savvy Investor Marketplace service kept members and clients invested in the stock market. Not only did they benefit from the entire rebound rally but they also took advantage of the new macroeconomic trends that emerged.
Trends that have reaped HUGE rewards. There is no better time to consider joining in on our success.
Disclosure: I am/we are long EVERY STOCK/ETF IN THE SAVVY PLAYBOOK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: My portfolios are ALL positioned to take advantage of the bull market with NO hedges in place.
This article contains my views of the equity market, it reflects the strategy and positioning that is comfortable for me.
IT IS NOT A BUY AND HOLD STRATEGY. Of course, it is not suited for everyone, as each individual situation is unique.
Hopefully, it sparks ideas, adds some common sense to the intricate investing process, and makes investors feel calmer, putting them in control.
The opinions rendered here, are just that – opinions – and along with positions can change at any time.
As always I encourage readers to use common sense when it comes to managing any ideas that I decide to share with the community. Nowhere is it implied that any stock should be bought and put away until you die.
Periodic reviews are mandatory to adjust to changes in the macro backdrop that will take place over time. The goal of this article is to help you with your thought process based on the lessons I have learned over the last 35+ years. Although it would be nice, we can’t expect to capture each and every short-term move.