Well, we are finally done with 1H22.  Phew.  I could comment about how bad it was, but I will spare you from reading it again here.

Unfortunately, just because the calendar flipped to a new month, new quarter, and to 2H22 the same headwinds are likely to present challenges for more time.  How much longer will this take?  How much of the bad news is priced in?  I get asked this quite regularly.   I also hear “But everyone is already bearish and knows the economy is slowing and sell side earnings forecasts are too high” — so, it must be in equity prices. 

I am fully aware of this and being a contrarian am empathetic and trying to use my tools to gauge what is and is not discounted by the market.  I am reminded of an exchange I had with a well-known value manager during the summer of 2008 regarding homebuilders, banks, and consumer related stocks.  At that time, those areas had been hit very hard and nearly everyone was bearish on them.  The bullish argument from the value manager went like this — “The stocks are super cheap, the homebuilders are now selling below book value, and everyone hates these areas more than at any time in my career.  They are a contrarian buy.”  I countered with — “Y...

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