“It's waiting that helps you as an investor, and a lot of people just can't stand to wait. If you didn't get the deferred-gratification gene, you've got to work very hard to overcome that.” - Charlie Munger
Happy Monday!
I spent most of the past two weeks in Atlanta following up with several companies as I continue my ongoing due diligence. I also tried to keep my head from spinning as the markets experienced increased volatility. An ongoing stream of economic reports, which were over-sensationalized, produced either overselling (the S&P 500 had dropped as much as 4.1% at one point during the week over three trading sessions) or overbuying in the markets.
In today's markets, we are experiencing these overbought or oversold situations with exaggerated pace and with more frequency. If you can recognize these multiple situations and keep your emotions in check, then it is an opportunity to increase profits and/or reduce losses.
Now according to fed funds futures contracts, there is a 90% chance that the fed will cut interest rates at the Oct. 30th meeting. That will be the third cut this year and Chairman Powell has hinted that the fed will begin expanding its balance sheet as well. This could help buoy the markets for the balance of the year, but not without the markets experiencing significant volatility along the way.
Overall the markets moved lower again this week despite a rally for two consecutive days on Thursday and Friday, which makes it three consecutive weeks now. This week the S&P 500 dropped by .3% closing at 2952.01 & remains up 17.8% YTD. The Dow lost .9% ending at 26,573.72 & is up 13.9% YTD. The Tech-heavy Nasdaq lost .5% over the week to end at 7,982.47 & is up 20.3% YTD. The Russell 2000 ("the little guys") lost 1.3% this week ending at 1,500.7 and is up 11.3% YTD.
Treasury yields continued their move lower over the course of the week. Have you refinanced your mortgage yet or are you betting that rates go lower? I have just refinanced my mortgage believing that these rates are very low at this point.
Thank you for reading PointFour’s Weekly Market Updates - we always strive to bring you interesting content, new understanding, and ideas. Please take a look at our next post, Stocks In Our View, where we highlight stocks that we think are worth looking into and news that you may have missed.
Thanks again for your consideration & for sharing your thoughts and ideas with us.
Best regards,
Vinnie
Vincent M. Oddo
Managing Partner
PointFour Capital, LLC
vincent.oddo@pointfourcapital.com