The Long Term Investor

If there was ever a day when an economic story would be irrelevant....today is the day.

Jobless claims: Another 232,000 Americans filed new claims last week

https://finance.yahoo.com/news/week...ended-feb-24-2022-labor-market-202508500.html

(BOLD is my opinion OR what I consider important content)

"New weekly jobless claims dipped last week, returning to a downward trend following a brief spike higher.

The Labor Department released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here were the main metrics expected from the print, compared to consensus estimates compiled by Bloomberg:

• Initial jobless claims, week ended Feb. 24: 232,000 vs. 235,000 expected and a revised 249,000 during prior week
  
• Continuing claims, week ended Feb. 12: 1.476 millionvs. 1.580 million expected and a revised 1.588 million during prior week
  

During the prior week, jobless claims posted their first increase following three straight weeks of declines, with labor market data still coming in choppily in the wake of the jump in Omicron cases at the start of the year. Still, claims have continued to come in just marginally above their pre-pandemic levels, as jobless claims averaged around 220,000 throughout 2019. Continuing claims for regular state benefits have also now come in below 2019's levels of around 1.699 million on a weekly basis.

But the jobless claims data belies the tightness of the labor market, which has been more evident in data on job openings. Vacancies have remained near record levels, underscoring employers' widespread desire to bring on more workers to keep pace with elevated consumer demand.
"Ongoing issues with labor supply has led companies to increase retention rates, which has contributed to the low level of jobless claims," Bank of America economists wrote in a note published Friday. "We expect this to persist over the course of the year."

As of Feb. 18, job postings on Indeed — one metric of worker demand — came in 60.4% above pre-pandemic levels from Feb. 1, 2020. And new job postings up on the site for seven days or less were up by 83.9% compared to pre-pandemic levels, suggesting demand was rebounding even more strongly following a brief dip in January due to renewed virus-related restrictions during the Omicron surge.

Though widespread job openings have created considerable leverage for workers, persistent vacancies have created additional concerns around inflation as competition for workers drives compensation costs higher. Average hourly earnings last grew by 5.7% on a year-over-year basis in January, according to the Labor Department's monthly jobs report, though this was dwarfed by the 7.5% year-on-year rise in consumer prices for the same month.

"Continued tightness in the labor market indicates that upward pressure on wages and other employment compensation is not likely to moderate soon," Federal Reserve Governor Michelle Bowman said in a speech this week. "Even with the improving labor market, I still hear from businesses that qualified workers are difficult to find, and labor shortages remain a drag on hiring and on economic growth."

MY COMMENT

The current labor markets are the perfect example of the damage that any sort of government central planing of the economy can do. We are living through the HANGOVER of all the various disruptive government programs that were put in place over the past couple of years. The GREATEST example being the general shutdown of the economy two years ago.

 

Could be Zukodany......short term events and how they will impact anything are very opaque.

My personal view is that this little "war" will end quickly and will be irrelevant soon. The markets will accept the FACT of what happens and simply move on. The INCOMPETENCE of our government will be on display once again....but that is no secret to anyone at this point.

I dont think there will be any panic in the markets and most people will simply watch TV and do nothing. Even as this Ukraine event is happening.....on an investing and money level.....I really dont care, and I dont expect there to be any financial consequence. of course....this is easy for me to say since my life and finances are totally disconnected from short term events.

I have seen and invested during events that were way worse than this little event during my lifetime. I personally dont see this Ukraine situation as a major event......in itself.

In the end it is the RUSSIAN ECONOMY that will take it in the shorts over the longer term.....assuming that world governments have any guts at all.......a big assumption.

I continue to be fully invested for the long term as usual.

 

ACTUALLY....the markets are holding up well and are stable. Now that Ukraine is reality, versus an anticipated event, we will see that the markets are not going to care much.

In this sort of environment I would TOTALLY ignore the DOW. The only valid indexes in the current environment are the broad indexes like the SP500 and the NASDAQ......and....at the moment they are reacting very mildly.

 

LOL....I was about to post this morning....when I left to deal with my construction projects.....that I would not be surprised to see some of the averages end up in the green today.

Either my account was hacked to put lots of green up......even though the markets are really red......OR.....I am actually green for the day and ALL the averages ended the day strongly in the green.

This is TYPICAL of this sort of big event day that has been anticipated with dread for some time. When the event actually happens it is a POSITIVE for the markets. The uncertainty is now gone and the markets can move on and forward. That does not mean it will be all green from here on. BUT.....it does mean that the anticipated event has happened about like the markets expected and the impact is already fully discounted.

 

I agree Zukodany. I saw this morning while waiting for Biden to talk a headline saying......"Will Our Troops Be Sent To Fight In Europe?" That was simply crazy fear mongering.

 

Anyway.....I ended the day SOLIDLY in the green. EVERY position had very nice gains. PLUS.....I finally got in a big beat of the SP500 by 1.62%.

The markets are going to continue to be very erratic......but....we are now going to be able to move beyond Ukraine....day by day. World events are NOT long time market drivers......they tend to be short term market drivers. AND......the markets often do NOT reflect what is going on in the world.....at least for very long.

I am sure there were some people somewhere....that sold everything and went to cash this morning out of panic. I doubt anyone on this site did that.

 

Here is one way to look at the come-back today.

Why megacap stocks rallied after Russia invaded Ukraine

https://finance.yahoo.com/news/why-...d-after-russia-invaded-ukraine-214142370.html

(BOLD is my opinion OR what I consider important content)

"As Russia launches a war against Ukraine, the Nasdaq Composite (^IXIC) — down more than 3% at Thursday's open — mounted a furious comeback, with megacap stocks Microsoft (MSFT) and Alphabet (GOOGL, GOOG) doing much of the heavy lifting.

However, the eight largest U.S. publicly traded companies have hemorrhaged over $2 trillion in market capitalization since their combined value peaked in mid-November. According to one Wall Street strategist, the geopolitical maelstrom may give bottom-fishing investors the opportunity to start nibbling at beaten-down stocks.

The combined market cap of Apple (AAPL), Amazon (AMZN), Alphabet, Microsoft, Meta Platforms (FB), Nvidia (NVDA), and Berkshire Hathaway (BRK-A, BRK-B) surged 168% from the pandemic low — from $4.3 trillion to a peak of $11.7 trillion on Nov. 19. Shortly thereafter, Apple would briefly top $3 trillion in value — but tantalizingly, it was never able to settle over that milestone valuation.

Rocky start to 2022
As inflation picked up sharply in the fourth quarter, U.S. Treasury yields across the curve (^FVX, ^TNX, ^TYX) surged higher. However, the shorter maturities gained more quickly than the long end — flattening the yield curve. In early January, investors woke up to the most hawkish Federal Reserve in 40 years, along with economic data rolling in on the toll the Omicron variant was taking on spending and the labor market, as vast swaths of workers called in sick for weeks.

This set the stage for the messy year investors have faced so far — with pricey growth companies and financial stocks flagging as the yield curve flattens. In the S&P 500 (^GSPC), only the energy sector has advanced this year — up over 20%. That's as WTI crude oil (CL=F) finally hit north of $100/bbl — for the first time since mid-2014.

This year alone, the average megacap stock is returning a loss of 17.6%, with Meta leading the way down — off 41.0% — thanks to a major earnings disappointment. But even Alphabet, which popped 7.5% after a big earnings beat, is down 12% this year. Tesla and Nvidia are each off by more than 20%.

Yet despite the carnage, investors are on the lookout for signs of selling capitulation to mark a potential bottom.

DailyFX.com Senior Strategist Christopher Vecchio joined Yahoo Finance Live early Thursday as the Nasdaq opened down nearly 3.5%. To help find signs of a bottom, Vecchio said investors should look to see elevated fear levels in the market as expressed by the CBOE Volatility Index (^VIX) and the CBOE VVIX Index (^VVIX).

"During other market sell-off episodes, two things have popped out that suggest we're nearing an exhaustion point. That would be [the] VIX above 35, and VVIX — the volatility of the volatility index — moving above 150. We didn't see that yesterday. It's likely that we're going to see that today," said Vecchio.

By midday Thursday, the VIX had peaked at nearly 38, and the VVIX had topped out at 145.

Vecchio is also looking at some of the broader index levels falling into territory not seen since last year — giving some confidence to dip a toe in the investing waters again on a short-term basis.

"Both the Nasdaq and the S&P 500 are coming into some technically significant levels — really going back to the May 2021 lows. And I do think that at that point in time, given the specter of this sell-off, it becomes sensible from a risk-reward standpoint — at least try to cherry pick a short-term bottom," he said.


S&P 500 sells off into May 2021 territory
EvercoreISI tech analyst Mark Mahaney shared a similar sentiment on Yahoo Finance Live Thursday, arguing that it makes sense to buy quality names at these levels — like Amazon and Google — if one's investment time frame is longer. "If you have a 9 to 12 month outlook, you will be able to start off buying the highest quality names," said Mahaney.

Vecchio stresses that Russia is only a catalyst against the backdrop of several larger market themes. "This all ties back to what's happening with the Fed in March. Russia is an accelerant here, but the conditions are in place for weaker stocks. You have a decline in corporate earnings, a weaker growth environment and of course record high inflation."

Analysts have been quick to point out that the Fed is less likely to front-load the monetary tightening process against the new geopolitical backdrop. Vecchio believes the Fed will hike its benchmark rate in March by only 25 basis points instead of 50 bps — regardless of the final inflation numbers that are released before the meeting.

"Ultimately given the scale of the decline we've seen thus far — looking into those May 2021 lows — it is a stopping point for further bleeding," said Vecchio, referring to the price action in the S&P 500 and Nasdaq early Thursday."

MY COMMENT

After today it will be........"very interesting".......to see how we end the week tomorrow. I totally agree that it is a STRONG positive for the markets that this Ukraine event will put very limiting restrictions on the coming actions of the FED.

In addition......this is a classic situation of the media fear mongering frenzy causing more problems for stocks than the actual event. I am not saying that the market reaction to this invasion is over......but now the event is fully realized and in addition is BAKED IN to the markets.

In addition it appears that the response from the USA and the EU will NOT be very firm. As I expected the sanctions appear to be a bunch of FLUFF....at least by Russian standards. I think we know how this is going to end......Russia will control Ukraine and the world....especially the EU....will simply move on. At some point down the road the sanctions will quietly disappear. That is what happens when you are dependent on your enemy for your energy survival.

 

This is what I am talking about.

Why Putin didn’t flinch in the face of an onslaught of financial sanctions

https://finance.yahoo.com/news/why-putin-didn-t-flinch-164653122.html

(BOLD is my opinion OR what I consider important content)

"Sanctions against Russia may not achieve their aim of forcing Vladimir Putin back to the negotiating table if his forces succeed in achieving their military objective before the country feels the economic pain.

Russia may be enfeebled by years of dependence on commodity exports, yet the Kremlin has fattened itself on the proceeds of last year’s inflationary boom in energy prices. That means it’s now in a prime position to weather reprisals designed to sap his fiscal ability to wage war.

“We will weaken Russia’s economic base and its capacity to modernize, and in addition we will freeze Russian assets in the European Union,” European Commission President Ursula von der Leyen warned on Thursday only hours after Putin launched combat operations.

Waves of increasingly punishing financial sanctions imposed by Western allies may ultimately take too much time to unfold their full effect—valuable time Ukraine may not have.

“President Putin’s decision to escalate the military confrontation into a war suggests a willingness to accept near-term economic pain in favor of securing long-term geopolitical goals,” wrote Mark Haefele, chief investment officer of global wealth management at UBS on Thursday.

Filled its coffers
At first glance, Russia seems like an easy sanctions target given its calcified and uncompetitive economy that lives off exports harvested from the fields or mined out of the ground. Wealth inequality creates deep fissures in its society, vaccination hesitancy is rampant, and life expectancy at birth ranks just 159th in the world.

“Russia continues to face relatively low potential growth, which, unless addressed, will impede the ability of the country to achieve high development goals, raising incomes and living standards,” wrote the World Bank in its latest country report published in December.

Michael Hüther, director of the economic think tank IW in Cologne, Germany, argued the manufactured crisis in Ukraine offered Putin the chance to deflect from domestic problems such as its glacial pace of innovation and reliance on foreign imports of electronics, machinery, and other durable goods.

“The path towards commercial independence from commodity exports is a very long one,” he wrote in an op-ed on Wednesday. “Russia is economically far weaker than it itself feels politically and projects militarily.”

But despite its antiquated industry and dilapidated infrastructure, Russia may be better prepared than ever to weather the sanctions, crippling as they might be. First off, the country enjoys vast resources at its disposal, making it the world’s largest exporter of natural gas and wheat.

And it’s likely no coincidence that the military offensive in Ukraine coincides with historically high energy prices, which have filled Russia’s coffers over previous months and given it an economic cushion.

Buffers impervious to bond market vigilantes
While many developed nations remain addicted to foreign capital to finance their consumption, Russia has proved it is more than capable of living within its means. At $82 billion in September, Russia’s current account surplus reached its highest since the global financial crisis, and its fiscal debt sits at just 16% of GDP, paltry compared with the euro area’s 98% figure at the end of the third quarter.

Meanwhile, Russia continued last year to decouple itself financially from the global reserve currency system by accumulating more gold in its central bank vaults than it holds in U.S. dollars. According to the World Gold Council, stores of nearly 2,300 metric tons at the end of November are the fifth largest in the world after the U.S., Germany, Italy, and France.

Putin’s Central Bank of Russia (CBR) also said it was “ready to take all necessary measures to maintain financial stability,” announcing forbearance measures on key balance sheet solvency metrics lasting until October to prop up any credit institutions that may see access to capital via interbank lending markets severed.

According to UBS estimates, the CBR also holds some $640 billion in foreign exchange reserves, and could afford to pause further interventions to prop up the ruble. Furthermore Russia’s sovereign debt is largely impervious to attack from bond market vigilantes thanks to the share of foreign creditors falling below 20%.

Finally the government always has the option to release some of its funds tied up in the National Welfare Fund, which bunkers proceeds from its petroleum industry for a rainy day. Its liquid assets alone equate to no less than 7% of the country’s gross domestic product.

Single out the oligarchs
This puts the Kremlin in an enviable position compared with 2014 during its first land grab when it captured Crimea, Ukraine’s pro-Russian enclave on the Black Sea.

That isn’t to say the icy frost of sanctions won’t put the chill on Russian risk assets. The MOEX benchmark tracking the country’s blue chips had already suffered heavy losses this week before halving in value on Thursday to plumb depths not seen since the start of 2016.

With stock market prices plunging, Bloomberg reported sources as saying Putin has called major shareholders and the leaders of Russia’s biggest companies to the Kremlin to discuss the situation in Ukraine.

Michael Roth, head of the German parliament’s foreign affairs committee, said the best hope for causing pain to Putin will not be making life miserable for the average Russian on the street.

Instead the West needed to expand their campaign against the wealthy benefactors of Putin’s economic system, only a handful of which have been singled out thus far. Prominent individuals like Roman Abramovich have escaped sanctions, and one even enjoys a cushy lifetime appointment to the U.K.’s House of Lords.

“Our sanctions must above all target Putin’s system of oligarchy,” said Roth. “We have to drain the resources from all those millionaires and billionaires that enriched themselves in his shadow and now enjoy privileges like sending their kids to schools in the West, buying luxury flats in Berlin and London, and going on ski holidays to Austria.”

Maybe then Putin can be forced back to the negotiating table."

MY COMMENT

My view is that the odds of forcing Putin back to negotiate are now ZERO. He will negotiate when he has achieved ALL of his goals. He simply does not care.

As usual we.....AMERICANS....are looking at this event as people that have NO CLUE what the thinking of the average RUSSIAN is. Most of us have ZERO understanding of how they think and their macho culture. "Cant we all just get along".....is simply NOT going to cut it with Russia or Putin. They are used to enduring pain and the pain we are talking about so far......is probably laughable to them.....compared to controlling Ukraine.

 

Lets hope the futures are accurately predicting the open today.....they are all in the green.

 

I like this little article......I also agree with it.

This Is a Classic Correction, Not a Bear Market, Russia Aside

https://www.realclearmarkets.com/ar...on_not_a_bear_market_russia_aside_818573.html

(BOLD is my opinion OR what I consider important content)

"What now? January’s drop bled right into February, with stocks’ slide into “correction” territory igniting fears the post-lockdown bull market is dead. Lingering supply chain snarls, $100 oil, Russia and Ukraine, the Fed lurching toward hiking—it’s all transfixing investors. Don’t fret. View past the fretful haze, smoke, haunted house freights and mirrors to see economic, political and sentiment drivers pointing up. This bull market is alive—it will bounce back.

Early 2022’s volatility doesn’t act like a bear market starting. They usually creep slowly, 2020’s lockdown-driven swoon aside—beginning with a whimper, not a bang. Sucking in more suckers. This correction began with an 18-day, -9.7% plunge off January 3’s high—a bang. Bear markets begin two ways: Either euphoric investors’ lofty expectations make any setback a shock. Or a multi-trillion-dollar negative wallop hits, surprising everyone.

Neither is now. Does anyone really think investors are euphoric? Only a wacko!! There is more talk of a lofty “Misery Index” than lofty expectations. Strikingly different, euphoria was emerging early last year—special-purpose acquisition company SPAC-ulation and non-fungible token (NFT) nuttiness reigned. But poofed fast.

I covered Ukraine, inflation and the Fed hiking rates—earlier this month and last: There are real negative aspects among those concerns, of course. War is tragic. Hot inflation can be problematic. But, perversely, these fears are bullish for stocks. Surprises move markets most, and worries make positive surprise more likely.

It took no time for Russia’s horrid invasion to be extrapolated through hyperventilating and sometimes, seemingly, salivating media to contemplate this being the beginning of China invading Taiwan, Iran attacking Israel (heaven help Iran), and more. I’ve gotten lots of emails with those fears. That’s correction psychology. Yes, war in Europe is a first since World War II. But every correction is phrased in versions of “this time is different”, worse, unique, unprecedented and explosive one way or the other, or multiple ways.

This is no different as it relates to markets. Regional wars don’t cause bear markets. We’ve had lots of them in lots of realms. This one just happens to be Europe’s first in recent history. Ukraine isn’t in NATO. This will not become what most fear, beyond regional. The outcomes here must be far worse than current fears, which are in the marketplace and have been, to create a bear market. Russia invading a NATO country or China invading Taiwan would hurt both invaders far more than help them. Stupid they may be, but not that stupid (although I’ve seen no sign China is stupid--I believe Putin is for invading Ukraine).

Mr. Putin just put every western nation on formal permanent notice that he can’t be trusted….for anything he says or does. With an economy smaller than New York’s, but relatively poor and backward, fully dependent on commoditized exports—what he just did can only hurt Russia’s future. Only.

Our central banks? Well, back to Russia, does its actions make the FED more likely to hike rates more soon or less soon…and, maybe later? But behind Fed tightening fears, a hidden reality lurks: The global economy doesn’t need Fed “help.” Q4 US GDP boomed 6.9% annualized. The eurozone grew 1.2% annualized despite significant Omicron restrictions—which are fading now. Even China—amid stringent “zero-COVID” measures and its widely watched real estate troubles—grew. Looking ahead, leading economic indexes for the US, eurozone and China point to growth. Services and manufacturing Purchasing Managers Indexes also heavily hint at expansion. The IMF’s 4.4% global GDP growth 2022 forecast met with investors griping about it slowing from 2021’s bounce-back 5.9%. Dismissing healthy growth? That’s bullish!

While headlines focus on nosebleed inflation, many dismiss signs their underlying cause—supply chain snarls—are abating. February’s IHS Markit purchasing managers’ survey found US component and staff shortages both improved. Its eurozone survey found rates of supplier delivery delays were the lowest since January 2021, thanks to easing supply chain chaos—an improved fact you read nothing of.

Industry bellwethers also show supply chain backdrops normalizing. Shipping giant A.P. Moeller-Maersk A.S. is trying to lock in long-term contracts at fixed rates. Why? It sees easing container capacity constraints reducing shipping costs ahead. Triton International—the world’s largest intermodal container lessor—sees container supply better keeping up with demand, with costs already 10% off highs. Mercedes-Benz expects chip shortages—which wreaked auto industry havoc—to ease in 2022’s back half. Volkswagen agrees. None of this means hot inflation abates immediately—not with many raw materials contracts already locked in. But it suggests the expiration date is sooner than most envision.

Politics? This year began with uncertainty high. But it falls soon—buoying stocks. November’s midterms should bring hardcore gridlock, blocking big new laws. Try to find big controversial bills in the third year of presidents’ terms. Good luck. Markets pre-price that in the back half of the midterm year.

In early January I told you Congressional redistricting would make campaigning extra shrill this year, likely weighing on markets early. That is playing out, with Republicans and Democrats redrawing districts to protect incumbents. Some analyses project final tallies totaling half as many swing seats as a decade ago. With stronger potential challenges from within their own ranks than the opposition, most incumbents will cater to their bases—eschewing moderation and shrieking fringe rhetoric that rattles investors short term. But shrillness won’t sway stocks for long. Remember: Stocks typically grind early in midterm years, but boom later, starting at some perfectly unpredictable point—and finish in a positivity party. Stocks have climbed in 83% of midterm Q4s, as election clarity brings relief. This fall they will soar again.

Few see or believe this backdrop—which makes me more bullish. Bank of America’s February Fund Manager Survey showed investors slashed their equity weights and upped cash holdings. They cut Tech allocations to a 15-year low—favoring value over growth at the highest level on record. Nearly a third now expect a 2022 bear market. Most expect GDP to weaken. The American Association of Individual Investors’ weekly sentiment survey, meanwhile, showed just 19.2% of respondents were bullish in the week ending February 16—among the 30 lowest readings in its 35-year history. Over 43% were bearish, well above the 30.5% historical average. Investors are extrapolating recent trends that won’t last. Love it—investing wise—because it’s wise investing

Don’t let today’s rampant negativity drag you down. As Warren Buffett famously put it, “The stock market is a device for transferring money from the impatient to the patient.” I hope you land on the right side of that. This is a classic correction and stocks will be higher for it ahead. I don’t know how high, how soon, but corrections are always rewarding to the patient.""

MY COMMENT

YES.....this is simply a NORMAL correction. It does not matter what the cause is......every correction is different.

I strongly agree with this little article on the correction, on inflation, and on the general stock markets and the economy. RELAX.....we are fine.

 

And here is what happens after the correction.......usually.

After This Stock Market Crash, History Shows a Big Rally Will Follow
Our fundamental analysis suggests that the U.S. economy won’t fall into a recession in 2022 -- and will instead roar back to life

https://investorplace.com/hypergrow...l-follow/?utm_source=rcm&utm_medium=editorial

(BOLD is my opinion OR what I consider important content)

"The first thing you learned about investing is that the best shareholders buy low and sell high. While, in theory, that sounds good, most investors can’t execute that strategy in practice because when stocks are low, they’re falling. And when there’s a stock market crash, investors tend to freak out and sell. That’s exactly what’s happening now as investors fear the Russo-Ukraine crisis.

The best thing you can do during a stock market crash is jump into the mix, buy the dips, hold through the volatility and wait for the inevitable rebound. Stocks have a 100-plus year upward bias. Over time, they go up. And they do so because they are tied to the strength of the U.S. economy, which has proven to be an unstoppable, ever-growing machine.

If there ever comes a time when shares don’t rebound from a stock market crash, we will all have much bigger problems to worry about than the markets…

But that time is not now. Now is the time to do what you learned on Day 1 of investing: buy low and sell high.

Russo-Ukraine Crisis Induces Stock Market Crash

And right now, as Russia invades Ukraine, we’re seeing a big-time stock market crash. As inflation fears loom and energy prices begin to soar, investors are abandoning their stock holdings to seek fixed-income assets.

The S&P 500 just entered correction territory for the first time since the Covid-19 pandemic emerged. And the Nasdaq Composite and Russell 2000 are both flirting with bear market territory.



Everywhere you look, it’s a bloodbath.

But history shows that this carnage creates opportunities.

History Indicates a Rebound

Yesterday, we did some research for our Innovation Investor subscribers on the historical significance of the S&P 500 entering correction territory. The index just did that two days ago.

The exploration largely concludes, perhaps obviously, that buying stocks after the S&P 500 enters correction territory is a great investment strategy for anyone looking to invest for 12 to 36 months.

Through 25 such corrections since 1950, the average 12-month forward return from the entrance into correction territory is about 5%. The average three-year return is about 27%. Excluding recessionary periods, the average 12-month and three-year yields are 10% and 32%, respectively.



We believe this research strongly supports the notion that history is repeating itself today.

As you can see, corrections weren’t normally bottoms. Stocks usually continue to fall after a correction — but only for a few months. Excluding recessionary periods, stocks were higher 80% of the time 12 months after the S&P 500 entered correction territory. The only non-recessionary declines came in 1956, 1987 and 1990.

In 1956 and 1990, the economy eventually spiraled into a recession on the next correction. In both instances, this happened within a year. In the 1987 occurrence, you had the Flash Crash, making that a very unique correction.

In other words, unless the U.S. economy drops into a recession, history shows that stocks will be substantially higher within 12 months.

Our fundamental analysis suggests that the U.S. economy won’t fall into a recession in 2022. And therefore, we firmly believe that stocks will trade choppy over the next few months — before roaring higher by more than 10% in the second half of 2022."

MY COMMENT

The GREATEST danger to the markets and investors is.....our own government. I am including the FED as a big part of "the government". If we end up in a bear market or a recession it will be due to government or FED actions.

If government and the FED can avoid drastic moves and operates moderately....we will be just fine. EVEN if we end up in a bear market or a recession.....I will STILL not do anything. I am a fully invested....all the time....investor. I will continue to do just that as I have for my entire lifetime. It is the ONLY way to avoid the low returns that come with market timing.

 

We can now see that the.....sanctions.....are simply a joke. NOTHING is being done to Russia's oil and gas industry. NONE of the actions that might actually impact them severely are being done. It is all political theater....performance art.......and people know it. We are not stupid.