This is our weekly Market Alert video for the week ending September 10, 2021.
This is also the 20th anniversary of September 11, so I wanted to talk a little bit about that. For those of you who were there during that time, who remember it from that perspective, it’s an event I think is etched in our memory and in our hearts forever. This morning, the stock exchange had a moment of silence, and I participated in that as I was watching. It’s amazing how something that happened 20 years ago can still get to your heart in such an impactful way that it brings immediate tears to your eyes. We tend to put those things aside and not think about them; but when certain events happen to remind us, that brings those emotions back.
I remember crying during my commute home that day. The image that sticks with me the most is the when the big cloud from the collapse of the buildings just enveloped everything and created this fog no one could see through. And all those brave first responders who went into that building with total selflessness—they were blowing their whistles so others could know where they were because you couldn’t see anything. I also remember that sound like it was yesterday. It was and still is haunting.
These memories remind us that we must always be vigilant. There are people out there who wish us harm. It also reminds us to be thankful for our military and the protections we have against those kinds of things—and all the people involved in protecting us from those kinds of things. The work they do is amazing, and we’re so thankful for them.
What happened on September 11th is something I know I will never forget, and I don’t think any of us should ever forget.
So, let’s talk about something not as important. In fact, as you put it in perspective with regard to 9-11, it’s quite trivial…but let’s talk about the stock market. And let’s talk about our investments.
As you know, our Fearless Forecast for this year was the Dow reaching 35,000. And of course, we met that earlier in the year. We did not amend that, and we’ve left it at the Dow being at 35,000. The reason why is because we have emotions, and investor emotions tend to cause the markets to go up way beyond where they should.
The opposite is also true. The markets tend to fall way below where they should as a result of investor emotions. These emotions tend to create these extremes. So, that emotional pendulum swinging back and forth will get us above the 35K..and below the 35K.
As we’ve seen, and as I record this, the Dow is below 35K. What does that mean in terms of going forward? Well, we believe the drivers of profits, which are therefore the drivers of stock prices, are still in place. One of them, of course, is the mismatch between supply and demand. Consumer demand is high, but the supply is not there because the supply chains are not back online. There are all kinds of issues that have surfaced in that regard. There is such a huge profit to be made by fixing that. We do believe it will get fixed, but it’s taking longer than we thought. And we certainly think that’s causing the selling that we’re seeing. So that’s a big factor.
The other issue, of course, is that workers are not going back to work in the numbers that were anticipated. There are 10 million job openings, and they’re not getting filled. As those jobs do get filled—and we believe they will—companies will produce more products and services. And as they do that, they will make more profits–and as they do that, their stock prices should rise.
So, we think the employment situation is still the driver that will continue to impact the markets going forward. In addition, we have the continuation of the COVID virus, along with its mutations and variants. The Delta variant is causing a lot of concerns, and there will probably there will be others. The thing with viruses is, unfortunately, they never go away. Think of polio, for example. These things—they just don’t go away. So, we’re going to be dealing with COVID for many, many more years. The question is—can we control it? Will we get past the Delta variant? If you look at Asia and Europe, this variant spikes early, but it comes down quickly as well. It looks like we may be reaching the peak of that, and as we come down the other side of that, things should loosen up again. We think we’ll see the economy continue to progress at that point.
We think the things that are worrying the market and causing the sell-off we’ve seen this week will take care of themselves over time. We also think inflation will subside. Given all of those dynamics, we think we’re going to see more all-time highs leading into the end of the year—and probably in to the first half of next year.
Having said all that, we hope you have peace of mind, and that you are not worried about all this stuff. We are not overly concerned about the selling we’ve seen in the last week. We think it’s just a normal part of what the markets do.
We’re not near our sell signal or anything like that. No action is required at this point. But of course, we will watch it to make sure, and if we think that there’s a risk to you, we will take action—no doubt about that. We hope you can rest assured knowing we’ll do that. We hope this gives you peace of mind.
We hope the summer has been good to you, and that you’ve enjoyed your second childhood without parental supervision as much as you can. We hope you don’t worry about this stuff, and let us worry about it for you.
I encourage you to share this video with friends and family. Also, be sure you subscribe to our YouTube channel and our podcast. We are seeing a lot of new subscribers to our podcast and our video—thousands in fact. That’s very encouraging. The more people we can get our message out to, the better. So, please share this with as many people as you wish, and hopefully they can benefit from it. Thank you for everything, and we will talk soon.