One of my favorite speakers (Jim Alworth) offers more perspective in a 25 minute conversation with Mark Bayko. Always worth your time.
- post self induced recession leads to red hot growth rates immediately after. Volatility then follows as growth rates moderate and feels similar to a plane leveling off after takeoff and the somewhat unsettling feeling in the stomach it can generate.
- the good old days are always only visible in the rearview mirror. Example: we were worried about change in government in US (now that is done). We were worried about getting a vaccine (now we have one)......
- inflation is going to move up and that is reflected in the bond yield scares we have been seeing, but that means that the economy is growing. Corporate earnings have also been starting to move up already.
- every bear market for the past 100 years has come alongside a US recession. Inflation and increasing interest rates too high, can be a cause of US recession. We think however that the timeline for that can be measure in years.
- valuation concerns seem to be based on recent perception. US market is trading above long term average. Other markets are far more pedestrian
- a lot of the growth has been driven by tech and those are the stocks that are making the P/E multiple look high.
- "valuation is a very bad timing tool"
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