Wednesday, October 9^th, 2024

WARREN BUFFETT’s: Current Top Five (5) Stock Picks

Your wealth should be invested in stocks that ideally generate ABOVE AVERAGE RETURNS with BELOW AVERAGE MARKET “RISK”.

One of the best ways to do that is to follow the WARREN BUFFETT “MODEL”.

In fact, if you want to invest in companies attractive to the BILLIONAIRE, make sure they are:

• Simple companies that are easy to OVERSTAND/UNDERSTAND
• Companies with PREDICTABLE, PROVEN and, GROWING EARNINGS
• Companies that can be bought at a “REASONABLE” price
• Companies with an “ECONOMIC MOAT” or a “UNIQUE ADVANTAGE” over its competition.

“I look for companies that have a business we understand; favorable long-term economics; able and trustworthy management; and a sensible price tag. We like to buy the whole business or, if management is our partner, at least 80%,” says Warren Buffett.

So, which stocks have recently been “FAVORED” by the BILLIONAIRE??? Here are five (5):

Opportunity No. 1 – Occidental Petroleum (OXY)

Starting in 2022, Buffett’s Berkshire Hathaway aggressively bought shares of Occidental Petroleum (OXY). Further buys throughout 2023 and 2024 have totaled 243.7 million shares, or about 27.7 percent of the company.

Oil giants like OXY have been whipsawed in recent years amid energy price volatility. But energy companies have been focusing on generating cash, rather than investing in questionable oil projects given the price volatility. As a result, oil giants have been returning excess cash to shareholders through BUYBACKS and DIVIDENDS, which Buffett loves.

Remember the ole trading/investing saying…“cash in trash when inflation runs hot, and oil is an inflation hedge.”

Best of all, OXY is a leading producer in the U.S. Permian Basin, which holds about 105.7 billion barrels of oil. That avoids the political “RISK” of investing in energy projects overseas.

Opportunity No. 2 – Verisign (VRSN)

While Buffett is famously “AVERSE” to investing in TECHNOLOGY stocks, if a business has an easy-to-understand model, Buffett will consider that stock.

One such investment is VRSN. Berkshire took a $2.6 billion stake in the company at the end of 2023. Verisign provides domain name registry services for internet navigation. That essentially makes the company a “SWITCHBOARD” for those navigating the internet.

That’s the kind of business that doesn’t require any manufacturing costs. Data-driven companies are capable of tremendous profits, as indicated by Verisign’s impressive 55% profit margin. The company’s financials are also attractive right now.

With a market cap of less than $20 billion, this is one of Berkshire’s smaller holdings, but it’s one that could lead to higher returns for patient investors.

Opportunity No. 3 – Snowflake (SNOW)

Another eyebrow-raising Buffett investment is in Snowflake (SNOW). They provide a cloud-based data platform, allowing users to consolidate data into a single point. As a business service company, it fits in with a number of other Buffett investments over the decades.

The tech-heavy orientation of the business will make this a volatile position for Buffett. Berkshire paid LESS than $1 billion for a stake now worth about $1.2 billion. That’s even after shares have been volatile. Snowflake is an “UNUSUAL” Buffett buy as the company is NOT yet profitable.

HOWEVER, shares trade at an attractive valuation, thanks in part to a CASH RICH balance sheet of $3.85 billion. Rising demand for data analytics as a business service fits in well with Buffett’s strategy of buying companies capable of tremendous GROWTH over time.

Opportunity No. 4 – Citigroup (C)

Warren Buffett is a “VALUE” investor, uncovering stocks that trade at LESS THAN INTRINSIC VALUE that should trade at a HIGHER MULTIPLE. One of the stocks fitting that mold was Citigroup (C).

Buffett often buys shares of large banks, usually following a “CRISIS” that leads to a BIG DROP in their SHARE PRICE, and Citigroup is just one of many big bank stocks Buffett “LOVES”.

In addition, with a low valuation and a strong dividend yield of 3.4 percent, Buffett was simply getting “GREEDY” with Citigroup stock, as others became fearful. Shares still trade at about 0.6 times their BOOK VALUE.

For a BANK, BOOK VALUE is a good indication of the VALUE of the BANK’s LOANS. A “DISCOUNT” to BOOK VALUE is attractive, and suggests some “UPSIDE” over time.

Plus, as Buffett waits for the Citigroup stock to recoup its losses, his firm can still sit back and collect an impressive DIVIDEND YIELD and benefit from the bank’s SHARE BUYBACK.

Opportunity No. 5 – Coca-Cola (KO)

What’s not to “LIKE” about Coca-Cola (KO)???

With STRONG DEMAND, DEPENDABLE DIVIDENDS and, INCREDIBLE EARNINGS GROWTH, Coca-Cola may be one of the best stocks to own for the LONG TERM.

Buffett, who drinks about five (5) cans of Diet Coke a day, agrees, once calling KO a “FOREVER” stock. Coca-Cola is also a DIVIDEND KING, raising its dividend for the last 60+ years. A current yield of 3.1% today isn’t the most impressive out there, but it’s still far higher than the S&P 500’s 2% DIVIDEND YIELD.

Even better, the total addressable market for NON-ALCOHOLIC drinks is estimated to be worth $833.1 billion. From here, it could grow at a CAGR of 5.6% through 2030.

Coca-Cola is likely to continue taking a big part in that growth, especially as it has DIVERSIFIED out of soda products in recent years and into other beverages such as COFFEE and ENERGY DRINKS. That will continue to fuel profits – rewarding shareholders in the process.

So while Coca-Cola is a well-known Buffett holding, it’s still one with a surprising amount of GROWTH ahead.

PEACE & BLESSINGS

Kenneth Reaves, Ph.D.

Tuesday, October 8^th, 2024Top of Form

The Recent FED’s Rate Cut Could “SUPERCHARGE” These Three (3) ETFs

Key Points

• A 50-bps cut to interest rates could boost stocks, with categories like SMALL-CAPS and EMERGING MARKETS companies in a position to benefit in particular.
• ETFs focused on these themes can offer broad exposure while minimizing the “RISK” associated with companies in these spaces.
• A PREFERRED SHARE FUND also gives investors access to the potential for high-dividend-yield companies that can benefit from lowered rates as well.

With the Federal Open Market Committee (FOMC) CUTTING INTEREST RATES by a larger-than-expected 50 basis points in its September (2024) meeting, businesses throughout the country will be able to take out loans more CHEAPLY.

One intended goal of a RATE CUT like this is to foster increased profitability through business expansion. While many categories of STOCKS could theoretically benefit from a RATE CUT, some are better positioned than others due to DEBT LOADS, LINKS TO CONSUMER SPENDING and, DIVIDEND STRUCTURES.

Selecting individual names most likely to benefit from a rate cut can be difficult, so many investors mitigate risk and diversify their holdings by targeting Exchange-Traded Funds (ETFs) instead. Some ETFs may provide a buffer against the possibility of a market slump due to concerns about COOLING LABOR FIGURES and the STRENGTH OF THE DOLLAR.

IJR

iShares Core S&P Small-Cap ETF

SMALL CAP stocks tend to be beneficiaries of RATE CUTS because of their reliance on FLOATING RATE DEBT. Many of these companies do not have the balance sheets to be able to sustain operations and growth without taking on significant debt.

However, reduced borrowing costs and easier financial conditions could help these companies, in particular, to expand their footprints. The small-cap-focused Russell 2000 has climbed by more than 22% in the last year in anticipation of a RATE CUT.

The iShares Core S&P Small-Cap ETF NYSEARCA: IJR holds a BROAD BASKET of more than 600 Small-Cap stocks, effectively managing some of the “RISK” that is commonly associated with individual companies of this size.

IJR also offers YOU, ME, WE the ATWWI FAMILY access to a variety of sectors for further DIVERSIFICATION—likely a useful approach given POST RATE CUT SECTOR ROTATION.

VWO

Vanguard FTSE Emerging Markets ETF

The Vanguard FTSE Emerging Markets ETF: VWO offers a cheaper alternative to many other Emerging Markets Funds as well as BROAD EXPOSURE TO COMPANIES AND SECTORS AROUND THE WORLD.

The fund's ASSET BASE and TRADING VOLUME AVERAGES support both ACTIVE TRADING and BUY-and- HOLD investing styles. VWO is up more than 13% in the last year, which is shy of benchmarks like the S&P 500, although this may indicate that there is still GROWTH potential in the EMERGING MARKETS space that has not already been priced in.

PFFD

Global X U.S. Preferred ETF

PREFERRED SHARES of companies tend to BENEFIT alongside other STOCKS when INTEREST RATES FALL.

Add to this the potential for HIGHER THAN USUAL DIVIDENDS from these STOCKS, and they will become an even more attractive prospect following the FED's RATE CUTS.

HIGH DIVIDEND YIELD STOCKS in INTEREST RATE SENSITIVE industries also tend to carry large VOLUMES OF DEBT, so they too stand to BENEFIT from INTEREST RATE CUTS.

The Global X U.S. Preferred ETF: PFFD holds more than 200 PREFERRED STOCKS with a focus on UTILITIES COMPANIES and BANKS, both of which stand to BENEFIT from a more favorable LOW INTEREST RATE environment.

PFFD also balances strong DIVIDEND PAYOUT with an EXPENSE RATIO LOWER than some of its peers, helping to ensure that YOU, ME, WE the ATWWI FAMILY do not lose out on “PASSIVE” DIVIDEND INCOME due to fund fees.

What Follows the RATE CUT???

The larger-than-expected RATE CUT could be a major boon to STOCKS ACROSS SECTORS, which could help to drive GROWTH in each of the above ETFs. At the same time, YOU, ME, WE the ATWWI FAMILY should be mindful of the potential that the UPFRONT RATE CUT combined with “CONCERNS” about the LABOR MARKET may spark a RECESSION. This is why, despite the fact that many ETFs are designed to make investing easy for “BUT-and-HOLD” INVESTORS, it may be worthwhile to take a more PROACTIVE approach to monitoring ETF performance in the weeks and months following the FED’s recent RATE CUT. On the other hand, if the RATE CUT has its intended effect and prompts a continued SURGE in the markets, these funds will position YOU, ME, WE the ATWWI FAMILY, well to take advantage of those gains and get “P.A.I.D.”.

PEACE & BLESSINGS

Kenneth Reaves, Ph.D.

Monday, October 7^th, 2024

CRYPTO Has Been “FIGHTING” The FED Since 2022

The FED’s interest rate policies have long been a critical force shaping financial markets, and in recent years, they have increasingly influenced the CRYPTOCURRENCY market. That all changed after the FED’s recent rate cut for the first time in years.

The change in monetary policy could have “MAJOR” implications for the CRYPTO market, potentially signaling the start of a new “BULLISH” phase.

CRYPTO Has Been “FIGHTING” The FED Since 2022

CRYPTOCURRENCIES, despite being “DECENTRALIZED” and operating outside “TRADITIONAL” financial systems, are heavily influenced by MACROECONOMIC factors, including INTEREST RATE CHANGES.

When rates are LOW, “RISK ASSETS” like CRYPTOCURRENCIES often BENEFIT. During periods of “EASY” monetary policy—where BORROWING is CHEAP and LIQUIDITY is ABUNDANT—investors look for HIGHER YIELDS, and CRYPTOCURRENCIES become a more attractive investment.

This was clearly demonstrated during the last CRYPTO “BULL” market, which began in 2020.

At the time, INTEREST RATES were NEAR ZERO in response to the economic crisis caused by the COVID-19 pandemic. The LOW-RATE environment, coupled with widespread LIQUIDITY INJECTIONS, fueled a “SPECULATIVE” BOOM in the CRYPTO market.

BITCOIN (BTC) surged to an ALL-TIME HIGH of $69,000 in November 2021…

As RATES remained LOW through the early months of 2022, BITCOIN (BTC) and ALTCOINS saw rapid GROWTH.

HOWEVER, when INFLATION concerns grew and the FED began signaling its intent to RAISE RATES, the party ended QUICKLY…

By March 2022, RISING INTEREST RATES had taken a heavy toll on the BROADER ECONOMY, including CRYPTOCURRENCIES…

Almost like flicking a light switch, the CRYPTO market LOST all its momentum and BUYERS disappeared. The “BEAR” market followed, taking out investors and companies alike, and it took BITCOIN ETFs to restart the “BULL” market years later.

RISING Interest Rates and the CRYPTO “BEAR” Market

The aggressive RATE HIKES implemented from 2022 through early 2023 aimed to curb INFLATION but also dampened SPECULATIVE ASSETS like CRYPTOCURRENCIES. As borrowing became more EXPENSIVE, “RISKIER” ASSETS suffered.

BITCOIN (BTC) fell to a LOW of around $16,000 by early 2023. This period marked one the most violent and volatile “BEAR” markets in BITCOIN’s (BTC) history. The CRYPTO market struggled mightily with TIGHTENING MONETARY CONDITIONS and REDUCED LIQUIDITY.

As INTEREST RATES PEAKED at 5.25%, LIQUIDITY IN THE MARKET DRIED UP, pushing investors toward “SAFER” investments with better returns, such as BONDS.

This trend persisted throughout much of 2023 and into 2024, keeping CRYPTOCURRENCIES under pressure. However, the FED’s decision to CUT RATES in September 2024 signaled a potential change in sentiment.

The Recent Rate CUT: A “BULLISH” Signal for Crypto???

The recent 50 basis points (bps) RATE CUT by the FED is seen by many as the first MAJOR REVERSAL in the central bank’s MONETARY TIGHTENING CYCLE, and it could mark a turning point for the CRYPTO market.

It was a BOLD move to CUT by 50 basis points (bps), and was actually the LARGEST RATE CUT since September 18th 2007.

LOWER INTEREST RATES REDUCE THE COST OF BORROWING AND CAN INCREASE MARKET LIQUIDITY, which may flow into “RISKIER” assets like CRYPTOCURRENCIES.

HIStorically, INTEREST RATE CUTS HAVE OFTEN PRECEDED “BULLISH” MARKET CONDITIONS, as they STIMULATE both ECONOMIC activity and SPECULATIVE investments.

For CRYPTO investors, the FED’s decision to “EASE” its policy stance may signal a fresh influx of capital into DIGITAL ASSETS like BITCOIN (BTC), ETHEREUM, and various ALTCOINS.

If the RATE CUTS continue and borrowing costs DECREASE further, it could be the beginning of a new CRYPTO “BULL” market.

Already, BITCOIN (BTC) has shown signs of RECOVERY, rallying from around $60,000 to near $63,000 following the recent RATE CUT.

BITCOIN (BTC) Update

In the immediate aftermath of the FED RATE CUT, BTC has already found some BUYERS…

BITCOIN (BTC) recently was within a hair of breaking above $65,000, which would mark the first HIGHER HIGH in months.

BTC is beginning to build up some MOMENTUM right now. It’s critical to hold ABOVE $62,000, but the “BIG” level all eyes are watching is $65,000.

The market is potentially just a few days away from BITCOIN (BTC) not only confirming the end of the prolonged DOWNTREND, BUT also the start of the next leg of the “BULL” market.

Consider BITCOIN “BTC” breaking the $65,000 level as the “BAT SIGNAL” to the rest of the CRYPTO market indicating that the “BULL” market is back on.

BITCOIN (BTC) Dominance and Market Dynamics

BITCOIN (BTC) dominance, which refers to the PERCENTAGE OF THE TOTAL CRYPTOCURRENCY MARKET CAPITALIZATION that is represented by BITCOIN (BTC), is another important factor in OVERSTANDING/UNDERSTANDING the state of the CRYPTO market.

When BITCOIN (BTC) dominance is HIGH, it typically means that investors are favoring BITCOIN (BTC) over ALTCOINS, suggesting a more “CAUTIOUS” or “RISK AVERSE” market environment.

On the flip side, when BITCOIN (BTC) dominance is LOW, it often signals that investors are willing to take MORE “RISKS” and are pouring money into ALTCOINS, which are generally seen as HIGHER “RISK” but potentially HIGHER “REWARD”.

Currently, BITCOIN (BTC) dominance stands at 58.5%, the HIGHEST it has been since the last MAJOR “BULL” market peak in April 2021.

This suggests that while there have been notable moves in the ALTCOIN space—especially in sectors like AI and MEME COINS—BITCOIN (BTC) continues to lead the market. However, a shift in BITCOIN (BTC) dominance could indicate the start of an “ALT SEASON”, a period when ALTCOINS “OUTPERFORM” BITCOIN (BTC).

As BITCOIN (BTC) approaches key resistance levels around $65,000, the market is watching closely to see if the recent MOMENTUM will carry it through to new HIGHS.

A breakout in BITCOIN (BTC) could trigger a broader “RALLY” across the CRYPTO market, potentially leading to a decline in BITCOIN (BTC) dominance as investors seek opportunities in ALTCOINS.

The CRYPTO market has been in a strange sort of “LIMBO” since the beginning of August (2024). After months of “DOWNTREND” it appeared the CRYPTO market finally set the final “BOTTOM” on August 5^th, 2024.

HOWEVER, since then BITCOIN (BTC) has been bouncing UP and DOWN without breaking through any real “KEY” levels.

Analysts have been waiting for a “CATALYST” that CRYPTO needed to muster up enough POSITIVE MOMENTUM to break through some “KEY” RESISTANCE LEVELS.

We might have finally just got The catalyst, the market has been waiting for, may have FINALLY occurred and now all YOU, ME, WE the ATWWI FAMILY have to do is sit back and watch things play out.

The upcoming weeks are “CRUCIAL” for the CRYPTO market, and INVESTORS will be closely monitoring whether BITCOIN (BTC) can sustain its newfound momentum. A breakout past $65,000 could act as a signal for the broader market, igniting the next leg of the “BULL RUN” and possibly ushering in a period of growth for both BITCOIN (BTC) and ALTCOINS. The FED’s RATE CUTS could ultimately set the stage for another “EXPLOSIVE” phase in the CRYPTOCURRENCY market, and those paying close attention may be well-positioned to get “P.A.I.D.” from the shifting dynamics.

PEACE & BLESSINGS

Kenneth Reaves, Ph.D.

Friday October 4^th, 2024

Red, White, and “BULLISH”: Get “P.A.I.D.” From The U.S. Economy

This ELECTION/SELECTION season, as headlines blare with demagoguery from certain politicians who denigrate America and warn of economic doom, the TRUTH tells a far DIFFERENT story.

U.S. GROSS DOMESTIC PRODUCT (GDP) growth is not only resilient but OUTPACING its global peers.

This robust economic performance is complemented by FALLING INFLATION, STRONG CORPORATE EARNINGS and a FED that has “EASE” monetary policy by CUTTING INTEREST RATES.

Under these conditions, specific sectors present compelling opportunities for YOU, ME, WE the ATWWI FAMILY to capitalize on America’s economic strength. I examine those sectors, below. First, the GLOBAL context.

According to the latest data from the International Monetary Fund (IMF), the U.S. economy in 2023 achieved the highest year-over-year GDP growth among advanced economies, tied with SPAIN. The IMF forecasts that the U.S. will take the lead in 2024.

This ECONOMIC “DYNAMISM” is rooted in various factors, including CONSUMER SPENDING, TECHNOLOGICAL INNOVATION and a ROBUST LABOR MARKET. While political narratives might paint a bleak picture, the REALITY is that the AMERICAN ECONOMY has shown an uncanny ability to adapt to challenges, whether from SUPPLY CHAIN DISRUPTIONS, GEOPOLITICAL STRIFE or GLOBAL INFLATIONARY PRESSURES.

As 2024 winds to a close and the start of 2025 looms on the calendar, economists project continued STRONG GROWTH, driven by GOVERNMENT INVESTMENTS in INFRASTRUCTURE, CLEAN ENERGY INITIATIVES and, the DIGITAL ECONOMY.

These factors, combined with America’s traditional strengths in ENTREPRENEURSHIP and TECHNOLOGICAL ADVANCEMENT, are setting the stage for sustained ECONOMIC EXPANSION.

The specter of INFLATION, which has haunted economies worldwide, is showing signs of RECEDING in the U.S. After peaking in mid-2022, INFLATION RATES have steadily DECLINED, thanks to a combination of factors.

The FED’s strategic INTEREST RATE HIKES have successfully cooled off overheated sectors without plunging the economy into a RECESSION.

IMPROVED SUPPLY CHAIN DYNAMICS and a STABILIZATION in ENERGY PRICES have also contributed to this trend.

LOWER INFLATION RATES bolster consumer confidence and spending, which, in turn, fuels economic growth. This creates a virtuous cycle that benefits corporate earnings and, by extension, the stock market.

As INFLATION continues to FALL, the FED is expected to PIVOT towards a more “ACCOMMODATIVE” stance, as seen with the cutting of interest rates in September (2024).

LOWER BORROWING COSTS will further stimulate business investments and consumer spending, providing additional tailwinds for economic growth and stock market performance.

STRONG CORPORATE EARNINGS have been a key factor supporting the resilience of the U.S. economy and stock market. For the second quarter of 2024, analysts project that S&P 500 companies will have reported year-over-year earnings growth of 10.5%.

Despite various challenges, many U.S. companies have reported robust profit margins, driven by OPERATIONAL EFFICIENCIES, TECHNOLOGICAL INNOVATION, and a return to pre-pandemic consumer behaviors.

Here are the “SALIENT” SECTORS for YOU, ME, WE the ATWWI FAMILY to watch for the balance of 2024 and beyond:

ENERGY: Investments in CLEAN ENERGY are gaining prominence. Companies involved in RENEWABLE ENERGY, BATTERY STORAGE and, ELECTRIC VEHICLES present substantial growth opportunities.

At the same time, traditional energy companies that are investing in CARBON CAPTURE and SUSTAINABLE PRACTICES are also worth considering.

FINANCIALS: BANKS and FINANCIAL INSTITUTIONS are set to benefit from a more STABLE INTEREST RATE environment and INCREASED CONSUMER and BUSINESS LENDING.

YOU, ME, WE the ATWWI FAMILY should look at WELL CAPITALIZED BANKS with a strong track record of RISK MANAGEMENT and PROFITABILITY.

REAL ESTATE: With INTEREST RATES expected to continue to FALL, the REAL ESTATE SECTOR, particularly RESIDENTIAL and COMMERCIAL REAL ESTATE INVESTMENT TRUSTS (REITs), is positioned for GROWTH.

Lower borrowing costs will support both property values and new construction projects. YOU, ME, WE the ATWWI FAMILY can capitalize on this trend by focusing on REITs with HIGH QUALITY ASSETS IN PRIME LOCATIONS.

INDUSTRIALS: The INDUSTRIAL SECTOR stands to gain from ongoing INFRASTRUCTURE INVESTMENTS and the “RESHORING” of MANUFACTURING to the U.S. companies involved in CONSTRUCTION, TRANSPORTATION and, MACHINERY MANUFACTURING offer attractive LONG-TERM growth prospects.

CONSUMER DISCRETIONARY: With FALLING INFLATION and STRONG EMPLOYMENT FIGURES, CONSUMER SPENDING is expected to remain ROBUST. Companies in the RETAIL, TRAVEL and, HOSPITALITY sectors are likely to see INCREASED DEMAND.

YOU, ME, WE the ATWWI FAMILY should focus on firms with STRONG BRAND RECOGNITION and a track record of CUSTOMER LOYALTY.

By recognizing the shifts in MARKET LEADERSHIP and focusing on sectors poised to benefit from ECONOMIC TRENDS, you can position your portfolio to take advantage of AMERICA’s ECONOMIC STRENGTH.

The “KEY” is to tune out the “NOISE”... ”TRUST” the "DATA"…and get "P.A.I.D."!!!

PEACE & BLESSINGS

Kenneth Reaves, Ph.D.

Monday, September 30^th, 2024

RELAX!!! The ECONOMY’s STRONG, INFLATION’s DOWN and, No One Wants to EAT Your Cat/Dog

I contend that INVESTORS have “OVERREACTED” to media noise, losing sight of the bigger picture.

RECESSION alarms are “OVERBLOWN”. INFLATION has been curbed… AND no, HAITIAN immigrants are NOT coming to eat your pet.

Overall economic growth is on track, CORPORATE EARNINGS are robust, the UNEMPLOYMENT RATE hovers at a 55-year LOW, INFLATION has reached a three-year low, and there is about to be a “LOOSER” MONETARY policy.

YET, despite these “FAVORABLE” conditions, INVESTORS are “ANXIOUS” and “VOLATILITY” has SPIKED.

The stock market lately has been on a rollercoaster ride, with INVESTORS gripping their armrests as “FEARS” of a cooling economy trigger sudden drops.

BUT, the bigger picture looks a lot “ROSIER”. Although we have endured a few scary SELL-OFFS, stocks have posted impressive gains, inching closer to RECORD HIGHS.

Yes, VOLATILITY has gotten more “INTENSE”, but the broader market trends to offer a much clearer picture.

Despite a few hiccups, inflation as measured by the CONSUMMER PRICE INDEX (CPI) and PRODUCER PRICE INDEX (PPI) has been trending DOWNWARD.

The FED’s recent INTEREST RATE CUT should shore up the “BULL” MARKET.

HOWEVER, there is still so “ANXIETY” in the markets compounded by the SHEER “INSANITY” of POLITICAL “RHETORIC” during this ELECTION/SELECTION.

In a now “INFAMOUS” moment during the last Presidential debate, GOP candidate DONALD TRUMP stated this about HAITIAN immigrants:

“They’re eating the dogs! They’re eating the cats!”

The only thing in danger of being eaten???

Your PROFITS, if you “PANIC” at LURID headlines. The news cycle toggles between “COMEDY” and “TRAGEDY”...

But fixating on the media “CACOPHONY” and the market’s SHORT TERM “UPs” and “DOWN’s” will make you QUEASY.

Instead, take a BROADER VIEW and SEE the POSITIVE trends that are underpinning the stock market rally.

Future PULLBACKS should be seen as “OPPORTUNITIES”, not “OMENS”.

Under these conditions, “BUYING” on DIPS is well justified…

LEGENDARY VALUE INVESTOR BENJAMIN GRAHAM put it best:

Basically, PRICE FLUCTUATIONS have only one significant meaning for the “TRUE” INVESTOR. They provide him/her with an opportunity to “BUY” wisely when prices FALL SHARPLY and to “SELL” wisely when they RISE SHARPLY.

FALLING TREASURY YIELDS and renewed enthusiasm over ARTIFICIAL INTELLIGENCE (AI) have driven the TECH-HEAVY NASDAQ sharply higher.

INFLATION has come a long way DOWN from its peak in 2022. This steady progress has given the FED enough breathing room to begin easing off the gas pedal on RESTRICTIVE MONETARY POLICY.

The path forward might not be perfectly smooth, but it’s looking increasingly POSITIVE for both INFLATION and markets.

The benchmark 30-year U.S. TREASURY YIELD continued its decline, falling 1.01% to settle at 3.93%. However, the CBOE VOLATILITY INDEX (VIX), the so-called “FEAR GUAGE,” recently jumped 3.38% to reach 17.12. Buckle up and keep an eye on the LONG-TERM HORIZON.

PEACE & BLESSINGS,

Kenneth Reaves, Ph.D.