Could it be we are at the end of the inconceivable stock market rally that began in March 2009?
Time will tell whether this sell-off is the beginning of something bigger or a panic and pause that refreshes.
The good news is there are many tea leaves to be read and the internets are awash in good content right now on the ‘unprecedented decline‘ in the US stock markets last week. In case you were sleeping:
On January 26th, 2018, the Dow Jones Industrial Average closed at an all-time high. On Thursday, nine days later, it closed more than 10% below those highs. This is the first time ever (going back to 1900) that the Dow closed at an all-time high and declined 10% over the next nine days (1928 saw an all-time high then declined 9% in nine days).
I checked my blog and I started calling this rally/boom ‘inconceivable’ in May of 2009. Because of the brutality of the financial crisis, I could not get my head straight at that time to let winners run. By 2010, it became easier.
Today I have 22 blog posts with the moniker.
By January of this year, with the help of Bitcoin, Robinhood, Coinbase and Netflix, the financial crisis of 2008 was that thing your idiot parents got caught up in. Coming into February, we had 14 straight months of S&P gains. It became so easy to just ‘set and forget’ that ‘BTFD’ was a financial internet meme.
Oh to be young and in January 2018 again….
To help get my head straight and hopefully yours, Ivanhoff (a dead ringer for Gary Shandling) and I whipped up a ‘Momentum Monday‘ to talk about the relative strength stocks and sectors that we are watching because if the ‘inconceivable rally’ resumes, I want to own the right stocks.
Elsewhere, read this from Charlie on the rise in yields and take a look at this chart which you will see 500 times if rates keep rising:
Charlie has another great post on what happens when stocks and bonds go down together.
This piece from ‘Wired’ on Facebook/Faceplant is really good too. They are starting to feel like Goldman, Sachs, Equifax, Comcast, United Airlines and Verizon wrapped up in one. Blech.
Having spent a week watching, reading about and digesting the selloff, my best guess for the selling is the possible trend change in yields.
PS – Sex is a safe haven! One of my 8-80 stocks – Match.com (Tinder) – hit all-time highs today. An amazing brand, rollup and spinoff from Barry Diller at Interactive Corp. It is no doubt related to the popularity of the app amongst athletes at the Olympics.
PSS – This college humor video on the media landscape is hilarious
The media landscape is a jungle and no one is safe. @CollegeHumor put together some never before seen footage of media animals battling it out in their natural habitat. #CodeMedia pic.twitter.com/7aspyi0kn3
— Recode (@Recode) February 12, 2018
Also published on Medium.