Who Profits from Pessimism?

I suspect we will continue to see the month of September as a struggle, which is not only OK, but a blessing in disguise.  

Ugly months set the stage for good months.

In other words, if we see September go down in the books as a month of setback then we’re positioned for a solid finish to this historic year. 

GDP looks to be coming back strong - even as we redefine the pathways of work. 

The thaw is happening, and patience remains our best ally:

There’s also some interesting data around the massive amount of mortgage refinancing going on.  

It’s flooding the marketplace with benefits during this window of mortal fear.  

And it’s not just the corporate world benefiting from massive cost cuts in the rate environment:

Note the last bullet point above: the average savings is $299/month.  

Collectively, that’s nearly $6 billion every 30 days that’s no longer sent out the door in interest.  

Call it $70 billion a year!  

Also, the positive recent ISM manufacturing data had some excellent insights.

Here’s a snapshot:

"Current sales to domestic markets are substantially stronger than forecasted.  We expected a recession, but it did not turn out that way..."

Wow!

No wonder GDP growth in the bounce-back is tracking far better than our fears might imply.

Fear is Control

If I tell you that things have historically worked out well for the US - even when we got punched in the gut - your eyes will tend to glaze over.  

And your first instinct might be something like, "Mike doesn’t understand how bad it is out there..."  

I totally get it.

But if I tell you that you or your wealth is in imminent danger then I will most assuredly have your undivided attention.  

It has worked that way since the beginning of time.

Negative chatter sells. Fear-driving chatter sells more. Period.

Pray for a Correction

Sure, they don't feel all that good, and they’re stressful, but when prices get crunched in the near-term, history shows us these events spring-load the market, preparing the returns going forward. 

• What did the Tech bubble of 2000-2003 create? The returns of the next 10 years. 
• What did the GFC of 2008-2009 create? The returns of the next 11 years.
• What did the waterfall selling of the GVC (Great Virus Crisis) in March 2020 cause? The returns for the next XX years.

Think about it.