Is it completely stupid to be an optimist?

Americans closed yesterday to celebrate the end of slavery. A new holiday created by Mr. Biden and his vice president. What did you do during your presidency? I made a holiday, fell off my bike and plunged the country into a slump. not bad. Whatever the recession, it is not over yet although most economists who work in investment banks believe it would be a miracle if we survived it. However, one of the Fed’s fiercest members, and the most enthusiastic about raising interest rates, has made it clear that inflation can be beaten without completely destroying economic growth.

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According to Mr. Pollard, the economy still has room to grow in the coming quarters. So we can start asking ourselves the question: Is it totally foolish to think that we’re going to get out of this and that, somewhere in the coming weeks, we’ll find ourselves before the opportunity of a lifetime? To face off with the S&P500 that will come to us, please believe in it before going back to the 6000??? This all sounds crazy enough to believe. Especially three weeks ago we’ve basically learned to deal with slaps and that the concept of “buying a dive” has been reduced to something completely crazy and unconscious. We still have to keep calm in the coming days and maybe know how to seize the opportunities.

Looking at an investor’s emotional cycle, a well-known graph that displays in order: euphoria, anxiety, denial, fear, despair, panic, frustration, depression – before returning to hope, comfort, and optimism, we realize that today we are somewhere in the zone of panic and frustration. Maybe we haven’t gotten to the point of frustration yet, because we still hear a lot of people claiming patience and the fact that they “suddenly” became “long-term” investors, while they had gone on the stock exchange six months ago to get rich before in the summer, buy a Lamborghini Aventador and go to the Cote d’Azur. At this point, we can still tell ourselves that there is a simple way to go before we give up completely and turn into frustration.

Source: Find Alpha

slack pricing

The problem we’re currently facing is slack “pricing”. The truth is, anyone who is 100% sure that the Fed will do the job without spoiling everything, surely does not have the courage to say so. or not very strong. So our job – as an investor who will get rich (but not this summer) will be to figure out when there will be a slump in market prices. Therefore, you do not need to be an engineer at SpaceX or a manufacturer of electric batteries in Tesla, just read the newspapers and listen to what the money stars tell us. WHAT THE ORACLES FINANCIAL MARKET THINKS…

So then, I agree that it is not easy to trust them, because most of them have a track record that is closer to lottery games and scratch games than the guy who really found the solution to winning every time. There are even some of them that have been fake for 25 years and still (for now) have a job as a strategist. But no matter how good they are, what you have to remember is that they are charismatic and when they come on CNBC telling us that this time is over and we’re all going to get through it, that the market is going to lose the last 30% and that we’ll have to resell Lamborghini Aventadors we haven’t received from the dealership yet . Well, we tend to believe them. True or false, that is the future he will tell us.

However, when we look at what we have been told or what to expect, we know that for a price stagnation to really be, we have to go somewhere between 3000 and 3400. At the S&P500 – not at the SMI – it would be a slump, it would be a ‘drain’ Economically, if the SMI goes to 3000… these are extreme levels and today the markets are completely oversold. What calls for a “kind of recovery,” moreover, given the actions of central banks, imagine … in an ideal world … if the July inflation figures showed that the rate hike was successful? ?? It showed that the CPI has fallen from… Come on. Let’s be crazy: 2% compared to 8.6% last month? are you imagining?

Slacks are in gray – Source: MacroTrends

A last big recovery before Al-Halali?

Currently, due to the apocalyptic atmosphere that is sometimes conceivable. Between the war in Ukraine, the fear of seeing a barrel at $150, the famine that lies ahead, the arrival of monkeypox and the return of COVID that the media announced this summer, we can’t believe things are going well. bounce. But since we haven’t completely given up yet and are still not in the “frustrated” phase, we can still tell ourselves that we can still make one last rebound before things go back down once and for all. We indulge in depression and desire to make Prozac sandwiches and Xanax milkshakes and finish with a rum gin vodka cocktail, all in triple doses.

When we take the time to analyze the different phases of a bear market, we realize that there are three:

The first stage : Some investors who are more “thinking” than others realize that despite the surrounding optimism, the situation will not always be rosy.

The second phase : When most investors realize that things are going well (maybe where we are now)

third level : When everyone is convinced that things can get worse. (where we will be in september)

It is clear that we are not yet at the bottom of the cup in the medium term. It pains me to say that. But considering the very depressing articles to be found in the media this morning. Given that everyone, including me, is trying to figure out when the landing will stop. It doesn’t seem absurd to me to say that in the short term, there may still be little hope of a recovery. And if there is a recoil, it would be foolish not to take advantage of it. Even if it means selling everything before going to the beach this summer.

But what does he say???

At this point, you must be wondering why I’m telling you all this. Well, actually, as happened yesterday, Americans were on hold, and the only thing that got out of there were comments from Biden thinking about bypassing oil taxes to lower fees for his fellow citizens and also the fact that he still doesn’t understand why the “big oil companies” aren’t doing By refining more oil, there wasn’t much to talk about.So it seemed to me that it would be interesting to give ourselves a little hope by telling ourselves that things will be better tomorrow – well, maybe not tomorrow right away, but ‘tomorrow, someday’ Instead of talking about European markets that were faltering and the fact that people looked at each other like porcelain dogs just to imagine what would happen in France in the next five years, where no one would be able to make decisions anymore…

So it’s Tuesday morning and the week can really start. Asian markets are up, the Nikkei is up 1.7%, and the Hang Seng is slightly lower. China is treading water and futures are up 0.5%. Bitcoin is at $20,000 – but it’s not easy to stay there, Oil is back at $110 and Gold at $1,842.

today’s news

We did not drown in the news this morning, but we will note that Ursula van der Machen, President of the European Union, insists on the fact that Europe must continue to develop alternative energies. It comes the day after Germany announced it was increasing its electricity production via coal-fired power plants, because the anti-Putin boycott is hurting Europeans more than Putin himself. There are also a large number of articles that believe that after the French legislative elections, the country has become ungovernable. It’s a real surprise. Not to mention that the opposition is demanding the prime minister’s resignation.

As for the economic numbers, there won’t be much to put in their mouths. Switzerland’s trade balance shouldn’t change the face of the world, and then in the US we’ll have Chicago National Fed activity and existing home sales – insist again on the topic of real estate, but no more and more alarms ringing in every corner than Indicates that the pyramids are collapsing. 30-year mortgage rates keep rising over and over and it won’t help, knowing that in a month the Fed will put their coat on.

Right now, futures are pointing in the direction of the bounce – as long as it continues, even if the word of conviction isn’t the first that comes to my mouth. Well, I guess I stirred enough air to say something this morning, so I’m left with wishing you a good day and we’ll see you tomorrow in good shape. As usual.

May the force be with you stuff! Tomorrow !

Thomas Villette

“You lose 100% of the shots you don’t make.”

“Wayne Gretsky”

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