End of The World Anniversary
Mar 9 2010 - Mike Williams - Morning Minutes
Good Morning:
A year ago, the world was wrapped in fear so tightly we could barely breath. Armageddon was on everyone's mind and there was no way out. We simply could not see any light, anywhere. Fear wracked our brains and clouded our judgment. The end was near.
Snapshot forward and we find something else happened on the way to the end of the world.
- The contrary element came into play again.
- Our worst fears were met by only one thing: our best buying opportunity in a generation.
- What we could not possibly fathom actually unfolded and what we were certain was ahead was, well, incorrect.
Has Not Changed
The most compelling part of this journey, however, is still ahead. Why do I say that? Because, for the most part, the crowd feels the same way now that it did then....the only difference being a few thousand DOW points and a boatload of good news ignored entirely.
Alas, should you doubt my sincerity on this topic of sentiment, let the market gyrate 400 or 500 points over the next few weeks and I will show you deep-seeded, blinding fear.
The good news mounts. Against all odds, one way or another, we are finding ways to resolve our issues. Sure, we have many ahead but note that opportunity arises as each issue is worked through and ultimately resolved.
Earnings Are Key
And they continue to surprise to the upside. Cash hoards are building and buyouts are looming. Small and mid cap stocks keep popping due to the seeds being planted for that ultimate wave of expansion that will come from buying up competitors. The Russell 2000 tells you what you need to know.
The Small Business sentiment came out this morning and I loved the headline, "Small Business Confidence drops to levels seen in 1982". Call me nutty but what would you do if we were back in 1982? You bet you would....
Forward earnings data have increased now for the 42nd week in a row according to data from Dr. Ed this morning. At this pace, we will be staring at about $95.00 a share by year-end, recovering entirely from the debacle we have all lived through together. Productivity is soaring and the economy, in many places, is healing itself.
The only real key left is an answer to two primary questions all investors must ask:
- When will I believe?
- Do I have the patience to be an investor?
12 Good Reasons!
Last week in your notes, we had a list of a Dozen Reasons to Agree with the Bears. Inside today, there is the other list no one is talking about: The 12 Reasons to Believe that the real Surprise!, is the upside.
I expect a few rough patches along the way...and they will be uncomfortable to say the leats, but this leak up is set to continue. The mountains of cash will go from earning nothing to "feeling better" ONLY after rpices have risen higher.
Strangely, no matter the topic of panic, we have not changed much over the years.....
Yes, it feels like 1982 all over again.....it just takes patience and the discipline to act when it feels really crappy.