That is unless you are a CEO and you reported less than expected earnings.
You only have to look at Nike, Oracle or Lululemon. It is not enough to have made money with good cash flow, you are mandated to project fabulous growth over the next several quarters. We have seen profit taking hit the Mag 7 with the king, Nvidia, taking a haircut.
It was almost across the board as concerns grew over the amount of capital being spent and the need to recover such over the next four years.
In truth, that is a river too far. The big question then becomes whether this is an indicator of tough times to come.
Give me a break. Most CEOs are confidant about 2026, they just won’t go far out on that limb.
I don’t blame them.
What I see coming is that earnings and cash flow will be fine next year.
The concern comes from the labor market. Many companies look to trim expenses to make up for the cost of tariffs.
To my mind, that is a copout. They way over hired during the Pandemic with all the money flowing into the economy from the government.
Now they are trimming that excess. Many ring their hands trying to connect the dots to a slowing economy. This is just one in unending examples of how having the government intervene in the economy does not work. Well, there are always those that win, but not the general public. Look at the big push for green energy.
Many tout this as saving the planet when it was a way for big money to move into those sectors and make fabulous riches.
I’m sure they care about the planet but their bottom line is sacred.
Watch the same parties now jumping on the next big idea which is AI.
All of a sudden we can use fossil fuels as we need the energy, no matter where it comes from.
We have to compete with the rest of the world. I would say this is such hypocrisy, but it is just business wrapped around politics.
That is the real deal.
This year far exceeded my expectations and I couldn’t be happier to be wrong. The bottom line is always the answer. Or, always follow the money.
Most now wonder how long this can go. There are those who chant that it is different this time. It isn’t.
Multiples are higher than expected and gains for the last two years are more than double the average.
It won’t go on forever but a crash isn’t necessarily the next step.
I am not ruling out some Black Swan, but the rules and game have not changed. The only difference is the terminology.
Greed and fear will always rule. The other factor is the government.
Less could be way more but that doesn’t buy votes, literally.
I trimmed a few things, but there is little left that is south of the equator.
I continue to let ride the winners.
As with most of you, I wish I had far more of the big winners.
I made sure to get on the train but was reluctant to place a big bet when I saw little value. Silly me. I am comforted by getting dividends that yield higher than bank interest.
It is not a great plan for a young investor. Of course I am far from young and really try to enjoy each day to the max.
That entails eliminating as much worry as I possibly can. Not having to answer to a boss was a big motivator, but can keep you out of the game also.
I’m sure your retirement account statement will not be a lump of coal this Christmas.
That is not to say you check out, as it is too much fun to be involved.
It forces you to engage in what is happening.
Boring makes us age. Keep raging against the storm.
I get that reality bits but quitting never solved anything.
You just may be on the verge of the greatest adventure of your life.
