“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria." Sir John Templeton
Good evening:
“How low can stocks go?”
That was the ominous headline in The Wall Street Journal 14 years ago this week as the Dow had fallen four straight weeks, while the S&P 500 was below 700 for the first time in 13 years (1996). At the time, few people not named Warren Buffett or Tom Lee were bullish on U.S. equities. Yet March 2009 turned out to be one of the best-ever times to buy quality stocks.
Today’s environment is no comparison to the Global Financial Crisis, but the consensus on Wall Street is that markets likely will re-test the fall 2022 lows. Investor confidence remains low. Not here. We bring a contrarian view, away from noise and confirmation bias, rooted in our research. Both Tom Lee and Mark Newton believe the recent pullback in stocks aligns with seasonal trends, and Jerome Powell’s hawkish rhetoric is nothing to weigh too heavily.
“A lot of people are debating the economy, and everybody seems confused as to 50 (bps) or 25 (bps), and it’s just back-and-forth banter,” Newton said. “Everyone has become an armchair economist. Even if you knew the data, you can’t correctly predict where things are going....Articles Read 2/2
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