I get occasional commentary emails from this guy Keith McCullough. Here's what he had to say yesterday. It's never all that hard to figure out where he's coming from.
"After stimulating the economy with largesse for two years, the Fed has finally been tasked to pick up their rate hike axe and break sh*t tomorrow at the FOMC Meeting. The market sees the Fed loading up 250 basis points of additional rate increases as the modal outcome for Fed Operation Break Sh*t #FOBS. And first on the chopping block? Housing."

Are not downturns by whatever we choose to name them part and parcel of our economic system? I was a grad student in American history a million years ago. It’s part of the American experience. Good times. Bad times. They come and go,,,,, sure as high tide follows the low. As the headline says ,,,, “ Recession is inevitable.” Only the timing is newsworthy.
LB

Just a reminder that overnight futures are a poor indicator of the next day's activity. I've seen it flip back the other way too many times.
Make a plan if you don't have one, and then stick to it (even if that means holding tight). Maybe now more than in recent years, its probably a good idea to re-assess your risk tolerance and adjust accordingly.

“So the market has not bottomed yet.”
There’s a 99% chance that’s true. “The market” may not bottom for many months or years yet. If someone has a reliable indicator that will signal the exact bottom, please share. Better still, if someone can announce that one day ahead of time, it would allow us extra time to begin aggressive buying. :)
Now - if you thought a certain fund was worth owning or buying 5 or 6 months ago when it was 10-15% more expensive than today, wouldn’t you love to buy more at today’s 10-15% discount? Or were we blindsided back than - completely unaware that inflation was rising, Russia had designs on Ukraine and had already annexed Crimea, and interest rates were absurdly low and would surely need to rise some day?
Here’s an article from the NYT dated December 4 saying that Russia appears to be preparing to invade Ukraine. https://www.nytimes.com/2021/12/04/us/politics/russia-ukraine-biden.html

No deployment of dry powder yet. First deployment will be to AA funds mid/end of summer, then into riskier stuff, depending on war in Ukarine. In general I use a 20% downturn as a buy switch in transitional periods such as these. I am a good 10-15 years from retirement and quite comfortable being 30% cash / stable value in my company 401k.

I ask because I’m at a loss. Hopefully some of you have a firmer grip on where we are than I do. I generally look at return on funds I’ve either owned at one time or follow regularly to try to get a bearing. A few I’ve used as reliable benchmarks in years past are bleeding now - normally a signal that it’s a good time to buy.
TRRIX -8.7% YTD
PRSIX -9.4% YTD
TRBCX -25% YTD
The above have lagged far behind their historical performance, Other than for the aberrant 2007-2009 severe market turmoil / destruction, I can’t remember anything close to those numbers. (Maybe briefly in March 2020?)
I also monitor the Dow & the S&P thinking that:
- a 10% near term drop looks interesting
- a 20% drop looks inviting
- a 30% drop seems compelling
Currently, the Dow is off 9.25% this year and the S&P down 13.3%.
However, this time it may be different. The conundrum of higher inflation, Fed tightening, war in Europe may have tilted the tables so that past indicators are no longer reliable.
Here’s an old thread from last October about Buying the Dip recovered from the trash bin. In it I commented: “I’ll bet you a nickel the Dow closes below 34,000 again at some future point this year.” I was wrong. The Dow stayed above that level thru December 31. However, we all know where it’s gone this year. The Dow closed at 32,977 Friday.

Don’t have much dry powder. Have a small limit order in place (adding to existing equity holding) for Monday’s open. Might add bit more if markets become “unglued” early in the week. A 7% weighting in TAIL helped Friday as it rose about 2%. Overall, portfolio was down in line with my tracker.
Carrying dry powder has been expensive in recent years with the very low rates of return. Expecting some fireworks the second half of next week as markets digest the FOMC actions + press conference.

.....Just in general, re: 2022 damage: it's a crazy, volatile year! Nice to see TODAY, but there's a downside coming, always, and it 's seldom been mild, in '22 so far. I'm watching Natgas... Since uncle Vladimir the pus-licker shut off Poland and Bulgaria. Not his biggest markets, of course. He's sending a signal. Maybe it will finally prompt the EU to stop their typical dithering and actually coalesce in order to DECIDE about something, and then (God forbid!) DO it! Creation of the EU is a smart thing, rather than go to war every 20-30 years against each other. But the bureaucracy is insane.

Some analysis from Tuesday’s Wall Street Journal (4/27/22):
“Now he faces fresh challenges. Mr. Musk has hocked roughly $60 billion of his Tesla Inc. stock—about one third of his stake—as collateral for bank loans, tying his personal fortune to Twitter’s. He must come up with $21 billion more in cash, which could mean selling additional shares in Tesla, just as the company is hitting its stride. Tesla shares have lost about 8% since Mr. Musk first disclosed a Twitter stake, suggesting investors are worried he will be distracted or financially stretched. Twitter will be saddled with hundreds of millions of dollars in annual interest payments, a risk for any company but especially in this case, as Mr. Musk has said he doesn’t care whether it makes money—it has had trouble doing so over the years.”
I share all the concerns mentioned in this thread. But I wouldn’t want to bet against this guy. He’s usually 3 steps ahead of everybody else. That said, SpaceX and Tesla came darned close to failing before he turned them around thru grit and perseverance. Worth remembering that Musk was co-founder of what is now PayPal where he made his initial millions - a revolutionary concept at the time. I’m thinking he views Twitter as primarily a launching platform for all kinds of innovative / lucrative ventures into finance and media which we haven’t even begun to comprehend yet. Why does the already wealthiest person on the planet need even more money? Imagine the cost of establishing a permanent human colony on Mars - his ultimate goal.
(Comments posted using Starlink internet service)

TQQQ = 3X leverage QQQ. Some would accept hitting a home run once every 5 years.

@MikeM - Yep. As you know the miners don’t always run in sync with the metal. I’ve held mining fund OPGSX for years and haven’t bought or sold any for about a year. Dead flat in my case. Lipper shows it up about 1% YTD, but down 5% for a full year.
Gold flirted with $2,000 the past month than fell to around $1900 recently. Has been below $1800 during the past 12-15 months. Have a bit in mining company WPM. So, when I want to add or cut exposure to the miners it’s easier to buy or sell WPM than messing with a mutual fund & the restrictions they impose.
Haven’t held bullion, but PRPFX does.

@rforno Capital International Group has a 560M stake and Blackrock a 700M stake in MSTR. MSTR owns almost 1% of all available Bitcoin at a low cost basis. While I'm not a personal fan of leveraging Bitcoin to buy more Bitcoin (as they have recently in a big way), it's being done with full board approval and transparently. I don't like their debt to equity ratio.
It's a software company that generates huge cash flow that instead of placing that cash in a bank and earning negative interest, they buy Bitcoin. So far, that gamble has paid off handsomely. Free cash flow has grown dramatically in the last couple of years. The point I was trying to make is the direct correlation of MSTR to Bitcoin with lower costs.
To MSTR, Bitcoin is just a better store of value. I do own a tiny bit.
@Anna imho my answers are: No, No, Depends if you meant speculative vs. contrarian.

FD1000
+1
Is the Schmeissing just getting started?
Inquiring minds want to know...

I have a special style. You can see it (here). Since 2013, I have been practicing sell to cash at certain conditions (proprietary). Since retirement in 2018, my selling rules are tighter, I never lost more than 1% from any last top. Going to cash depends on big picture analysis + current conditions and why it's different from others. I missed all the big meltdown of Q4/2018, 03/2020 and YTD. I can be wrong, it happened twice since 2013, I was back within 3-4 days.
Remember, it's more important to miss the worse days than the best(link).
I posted several ideas YTD on other sites:
1) Best wide range category so far in 2022 is VALUE(VTV), posted in mid-January. See (chart). In my world, it means most of the stocks would be in value.
2) I'm in cash for weeks because high risk conditions were met. It's the longest I have been in cash since 2013. Based on that, I only allowed to make short-term (hours to 2-3 days) trades.

Happened upon the new quarterly letter which, inter alia, states the rather obvious:
"We’re sure you are well aware that our portfolios have not been immune to this shift in market sentiment; we have delivered the worst relative (to our benchmarks) quarterly performance in our history. We’ll address this in more detail later in this letter, but at the heart of the problem is that for the past 10 years, with the exception of a few short periods in 2015 and 2018, the market has rewarded Growth Assets with ever expanding valuations. By November 2021, valuations for Growth Assets had become extremely stretched across most markets. For most of the Grandeur Peak portfolios, this ballooning of valuation was a key driver of our strong outperformance in 2020 and 2021. But now the pendulum is swinging back the other way. While the corrections in valuations we’re seeing across the portfolios isn’t surprising in hindsight, unfortunately we just didn’t position ourselves very well for it because the fundamentals of our underlying holdings have been so strong."

“Is the Schmeissing just getting started? Inquiring minds want to know...”

Personally, I subscribe to the “tip-toe” school of investing - adding slightly when things are falling and selling slowly when they rise. Today was a good day to lighten up on TAIL which is up and tip-toe into some things that are down.
Yesterday, Bill Fleckenstein, who I enjoy reading, predicted the Fed will keep raising rates “until something breaks”, than will “panic” and cut rates. He’s been wrong a lot on his nearer term projections. (Shorting Tesla 2-3 years ago / owned OSTK recently). But does seem to have a reasonably good grasp of the longer term picture. As to making sense of all the conflicting market analysis:
“The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.”
- F. Scott Fitzgerald

Thanks Lewis. Pointing to PG&E is another example of whataboutism. And not especially meaningful even so. It's conflating issues of distribution and production.
A bad actor? Sure, nothing new here. Can you say Diablo Canyon? Forty years and still not decommissioned. San Bruno? Bankruptcy shell games? Nothing new here either. In 2001 PG&E Corporation moved assets around so that they could not be reached when its Pacific Gas and Electricity Company subsidiary declared bankruptcy.
None of this makes Berkshire Hathaway any less problematic. S&P reports that Berkshire Hathaway is the largest operator of coal-fired power plants without selective catalytic reduction technology. Further, it will keep operating nearly half of those plants past 2030. It has said that it will retire those plants by 2050, but as you wrote, 2050 commitments are not to be believed.

Future of EVs lies in new battery technologies to enable the EVs. Most of today’s lithium ion batteries have many limitations ranging from safety hazard (fires from accidents and battery failures), raw materials and immature charging infrastructure. Moving away from Li ion battery technologies to something more widely available while maintaining the same energy density would be significant.
For now, electric vehicles make most sense in commercial and fleet vehicles. EVs face similar hurdles than those of fuel cells vehicles 20 years ago. We have to be optimistic that these hurdles can be solved.
Good to see that Rivian is widely own by many growth funds.

Several experienced Wellington managers retired in the last 5 years. But Wellington have deep bench where newer managers typically have more than 5 years severing as co-managers in similar funds. Wellington is also advisors to Hartford funds and you can find the track record of these managers. Google their names and trace their prior track record.
I pick VGWAX since the bond manager has long track record whereas the stock manager has several years experience running two Hartford funds. The oversea exposure is limited to developed market. Through 2020 till now, the downside risk is better than average. Also I want a global allocation fund for lowering the risk.

Companies are increasingly deciding not to have their chief executives serve as chair

Given Warren Buffet’s advanced age, they may have a point to have a second person to assume part of the responsibility. The vice chairman, Charlie Munger, is several years older than WB.

I'm a VWILX ¹ investor and the fund has performed poorly over the past year and YTD.

Same here, but I exchanged most of VWILX to the more value-oriented VGWEX for reducing risk. Growth is out of favor now after it out-performed value for many years. Anderson is retiring this year. Perhaps the Schroeder team will now lead VWILX.