It's Never Easy

It's never easy to make most calls. In this case, it would be whether or not this Bear Market in stocks has ended. Oh, and let's not forget whether the brutally ascending treasury yields will now reverse direction and head back down again, perhaps calling into question the almost universally accepted call that the bond bull market of the last 40 years or so has finally ended.

One of our Brain Trust noted this past week that making definitive calls cannot be reduced to formulas or technical analysis, or, really, any other "objective" criteria. Not that such things don't lend themselves to interpretation that might help us determine the longer-term trends. But if things were cut and dried, we'd all be rich.

I, for one, have spent hours researching and analyzing the various formulae others put forth to make their prognostications. Included in these are various ratios, like the yield on the 2-year and 10-year treasury, that have, over the years, reliably told us whether to expect a recession. This particular ratio has been remarkably accurate - albeit not perfect.

The same applies to al the ratios we track each month.

So what's the point? Why bother?

Perhaps the best answer is that it gives you a "feel" for what's going on. Sure, it's a bit vague. But it's reality. 

On the other hand, we do use metrics and measurements that influence, sometimes even trigger, specific trades in our portfolios. You need these, especially those related to risk management like trailing stops, or simple stops. Otherwise you're subject to too much emotion day by day.

So, yes, there's practical value to the things we track. It's just that you don't want to make too big a deal about them. Even the risk management triggers can be wrong at times. When they are, you sell an item that's then shoots up. No big deal. You stick with your discipline and put the whipsaws behind you. Again, nothing's perfect.

All of this serves as a reminder, as we head into year-end. The year has been rough for many of us professional investment types. And now, with the stock market perking up, we need more than ever reminders such as this. In the case of both stocks and bonds, the reminders tell us not to get sucked into the short-term fluctuations, but to re-visit our long-term view, the view that mostly drives our decisions.

What is that view? It remains that there's a Bear Market in both stocks and bonds. Any counter-moves are corrections in these ongoing Bear Markets.

With all this, it's a good time - actually it's always a good time - to remember that the whole point of investing is primarily to preserve what we worked so hard to accumulate, secondarily to see if we can make gains that keep us ahead of inflation. It's not much more complicated than that.

And given the simplicity of this view, we preserve both our sanity and the time we can dedicate to what really matters in this world, during the brief span of our life on earth. For one who believes in God, and the possibility of eternal life spent in Heaven, happy in a way we've never experienced or even imagined no matter how good things might be, or might have been at any point, during this stretch of time beginning with birth and ending in death.

Wrapping up, in that spirit, here's something stunning from the mouth of an NBA coach. Now, I'm neither a particularly fervent professional basketball fan, and typically find professional sports - at best - an agnostic influence on society. Yes, I know many draws all sorts of comparisons with sports when trying to illustrate the benefits of self-discipline, struggle, overcoming obstacles, etc. And there's some legitimacy in this. It can be particularly inspiring to watch an athlete strive to do their best, especially in the face of the odds working against them. Fair enough. But professional athletes, particularly those in the "big" sports like the NFL, MLB, NBA, international soccer, even the NHL to some extent, are paid ginormous salaries whether they play or not, so their example isn't especially inspiring to this regular guy plying his trade everyday to earn a modest security and sufficiency for the welfare of his family.

Yet here's someone plying his trade in professional sports - a coach, not an active athlete - who rises above the fray and, without missing a beat, in the face of an interview with the press, openly expresses his Catholic faith (I think he's Catholic; but he's at least a Christian), something quite out of the ordinary - to say the least these days. This, while not an athletic performance, truly inspires:

https://twitter.com/i/status/1598391602367823873