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A message from Teddy

Updated: Oct 31, 2023

As Markets rally the words of Teddy Roosevelt again come to mind....

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

So, melt up Monday yesterday; Oil up, Gold up, MKTS up, and again to repeat to the Bearish crowd, pin is higher, yes I listened to the miserable David Rosenberg on a podcast last night. A question?

When rates were 6.5% NIFTY FIFTY traded at 45x, in Tech bubble rates at 5-6.2% and stocks traded at 60x; today rates at 60bp’s and stocks trade at?! 

Then listen to the revered and feted guru Howard Marks: “Those of us in markets believe that stocks and bonds are selling at prices they wouldn’t sell at if the Fed were not the dominant force. So if the Fed were to recede, we would all take over as buyers, but I don’t think at these levels.” Well guess what Howard; the Fed isn't receding...Yet. 

They know out comes the drip from the patient and patient flatlines. So, “drip in and drugs still flow..”

Another overlooked metric is to see how much money is “stranded” in money mkt accounts, “ it now totals $4.8 trillion, which equates to around 16% of market cap. On a percentage basis it’s not as big as 2008, but it’s still a meaningful amount of dry powder earning little & suffering from increasing FOMO.”

I love the irony of the economy continuing to mask the real strength in the stock market! And yes David I do remember that huge Remdesivir-induced surge on April 17th…you say these hope-based rallies are to be faded, you make a good point that The S&P 500 closed at 2,874 that day (with a 2.7% pop) .

Let’s see where we are now, Nutstuff days Remdesivir is so April, this is May. Anyone work out why Moderna management were so excited by the Moderna cure yesterday?! I can think of 1.25bn reasons...

So, maybe David Rosenberg and his bearish friends are right; Short selling $TSLA, $SHOP, $ROKU, $ZM, $W, on zero earnings/negative earnings. Nutstuff thinks not! Although am starting a short position in W, and have good thesis to support.

The ISI latest client survey shows only 24% of clients are positioned for a move 10% higher. Finally think so far nearly an entire year of GDP printed/pumped/stimulated into the US economy, the largest increase in money supply in 10 years, probably ever, and you are sitting this out.

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