Go big or go home.
That’s how the indexes are moving into the holidays and we KNOW the rally is real because we have a picture of it, right? This is how the human brain is trained – when you see TSLA at $250 ($793Bn) or NVDA at $418 ($1Tn) you tend to believe that’s what they are worth because that’s what people say it’s worth and everyone you know is an expert on everything and not likely to be wrong, right? More importantly, when you look at the chart for either stock, you can see for yourself that they are trading at those levels – so that must be right too, right?
As crazy as it seems, way back in November of 2022 people thought NVDA was worth $350 ($833Bn) and TSLA was $400 ($1.1Bn) at the time but those same people (who are right all the time) changed their minds and a year later, both NVDA and TSLA were down to $100, with losses of $825Bn for TSLA and $595Bn for NVDA respectively.
This is why, at PSW, we teach our Members not to rely on other people’s opinions to tell us what something is worth. At best, a chart shows you a snapshot of people’s SENTIMENT on a stock at the moment – and that is rarely the true picture.
Reality is what we agree to believe because everyone has their own perspective and interprets reality differently. There SHOULD be things that we all KNOW are true but TRUTH has fallen very much out of fashion this century and many things are subject to interpretation that used to be universally accepted as true.
The founding fathers of this very country said:
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.
That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.“
247 years ago (that’s right, big anniversary in 2026), people knew what Life, Liberty and Happiness were. They knew what Safety was. These days we have to ask: Do we have the right to Health Care? Do we have the right to Education? Do we have the right to Food and Shelter? Do people have the freedom to choose what to do – even in as narrow a context of their own bodies? Certainly people who are denied those basics aren’t going to be happy and Jefferson himself said on many occasions that the people of THIS country need to rise up against our own Government if it’s not doing it’s job to make them safe and happy.
Are most people in America safe and happy? We live in a world where the pursuit of happiness is Don Quixote’s impossible dream for most people and safety? That’s a question of who you are these days, isn’t it? We have this thing called the Bill of Rights, where the 4th amendment to the constitution says:
“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”
I guess these rights still hold up pretty well unless you are Gay, Transgender or non-White. Oops, or an immigrant because, though it doesn’t say so in the Constitution, Immigrants don’t have any rights. By logical extension, tourists don’t have any rights either.
So, what would Jefferson think of all this? Would he urge us to alter or abolish our current government? Would he encourage us to rise up against the injustices and fight for true equality? Perhaps he would be shocked to see the nation he helped create still grappling with these fundamental issues…
More relevant to the markets, what will Jay Powell say this morning? It’s a big speech at the ECB’s Forum on Central Banking and the theme is “Macroeconomic stabilisation in a volatile inflation environment” – they like to try to get you to fall asleep while just reading the program. Anyway, it won’t be just Powell but we’ll hear from Banksters from all over the World who have the power to move markets.
These people will all be there to tell you their reality and God forbid they actually all get together and AGREE on what reality is and how to handle it – that is simply NOT the way we do things in 2023, is it? Instead, each Central Bankster will make speech about their reality and they will all go off and do what they want without learning from each other or coordinating their actions for the common good.
We have GDP data coming up tomorrow morning (1.3% expected) but what I’m most interested in is Consumer Sentiment on Friday as that is ridiculously low (63.9) while Consumer Confidence on Tuesday was ridiculously high (109.7).
Consumer Confidence and Consumer Sentiment are both measures of how consumers feel about the economy and their finances, but they differ in the survey sizes, the questions, and the emphasis they place on different aspects of consumer behavior. Consumer Confidence asks about the likelihood of buying or doing something in the next six months, while Consumer Sentiment asks about the feelings of buying or doing something right now or in the future. Consumer Confidence focuses more on employment and the overall economy, while Consumer Sentiment focuses more on household finances and personal circumstances.
The divergence between Consumer Confidence and Consumer Sentiment may reflect the different perspectives and expectations of consumers based on their current and future situations. For example, consumers may be confident about the job market and the economic recovery, but they may also be worried about inflation, taxes, or health issues that affect their spending power. Alternatively, consumers may be pessimistic about the state of the economy, but they may also be optimistic about their own income, savings, or investments that allow them to spend more.
We’ll see if we can reconcile the two reports and get a better understanding of what’s really going on in the segment that makes up 70% of our economy. It’s hard to make good investing decisions if we don’t have a good handle on these major economic drivers.
