The Worst January For The Markets
In his Daily Market Notes report to investors, while commenting on the the worst January, Louis Navellier wrote:
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Q4 2021 hedge fund letters, conferences and more
Klarman: Baupost’s Core Principles Have Helped The Fund Outperform
When Baupost, the $30 billion Boston-based hedge fund now managed by Seth Klarman, was founded in 1982, it was launched with a core set of aims. Q4 2021 hedge fund letters, conferences and more Established by Harvard professor William Poorvu and a group of four other founding families, including Klarman, the group aimed to compound Read More
Volatility remains high and cheap stocks are getting cheaper. The concerns about inflation and central bank intentions to address it continue to weigh upon the market, creating more fatigued sellers than opportunistic buyers. There were hopes that Apple’s amazingly strong numbers reported last night, indicating they had no problem with computer chip shortages, would lift a lot of other boats, but that only lasted for a few minutes at the open.
The NASDAQ is now headed to its worst January ever, with 5 straight weeks of losses not seen since 2012. The Dow and S&P 500 are headed to 4 straight weeks of losses, their worst month since March of 2020, the start of the pandemic. These moves are unprecedented in a non-recessionary environment. The reaction appears overdone given no one sees interest rates hitting even 3%, negative earnings, nor a flat economy.
Sliding Down The Wall Of Worry
We have full employment and a post-pandemic world to look forward to. Technology solutions continue to have bright prospects with Elon Musk forecasting full self-driving software a reality for Tesla this year, and the Metaverse (whatever that actually means) being promoted as the future by multiple mega techs. The market is currently sliding down the wall of worry, searching for a new equilibrium of valuation multiples and trying to assess what a higher level of inflation and interest rates will do to earnings growth.
The good news is that a little inflation is good for stocks historically, and obviously, there’s been decades of growth with interest rates at much higher levels. At this point of uncertainty, probably the best strategy for investors is to identify which stocks and sectors appear to have become the most attractive in this pullback and have a plan to execute when the market finds a clear bottom. History says when the turn comes the first big leg up is the steepest move of the recovery. Be ready.
A Florida teacher, Robin Hughes, who discovered most of her students had never seen snow gave them an unusual surprise by having her sister mail the class a snowman. Hughes said she was gratified to see the looks of “pure joy” on her students’ faces. She said she is saving the water as Lucky melts so he can be part of another lesson — watering a new plant for Earth Day. Source: UPI. See the full story here.
Updated on Jan 28, 2022, 12:55 pm