A Comment -- General Comments From an Expert (A Commentary)

What's attracting your attention? Inflation and what the Fed is doing and saying. We're in a US mid-term election year. His research going back to the 1950s shows that markets tend to trade off badly early in the year, but every time they rally sharply off those lows a year later. See the "Goodreid Guage" under "Insights" on his website, goodreid.com. During times of Fed rate hikes, markets actually go up. Sentiment is so overwhelmingly negative right now. You need to step back and clear your mind. Not a Pollyanna approach, but know that there are many possible outcomes from the current environment, and the mainstream ones are not always the ones that come to pass.

Recession? Recessions happen. They come in different shapes and sizes. There have been about a dozen since the end of WW2. They're not terminal. They're actually the beginning of something. TGT and WMT clearing inventory is deflationary, not inflationary. A recession creates many great opportunities, and he's seeing these.

Investing when stocks are falling. There's no doubt we're in a downturn. Question is how deep does it go? Investors have to be careful about valuations. A low PE might have the E at risk. Do I have a quality company that can sustain itself through an attack on revenues and earnings? How does it come out on the other end? Are there secular forces that will allow it to do much better? This homework will tell you whether a stock is yea or nay for your portfolio. Investing is done in years and cycles, not days/weeks/months.

The economy was too hot and is now cooling off. He doesn't believe we'll fall into stagflation. Today though the bears had the upper hand.

Oil prices continued to climb today and oil stocks rallied then retrenched because investors realized that such a swift rise will destroy demand for oil. Sky-high oil could lead to a recession and stagflation, but he thinks US producers can pump out more and avoid a recession and stagflation.

Credit impulse in China has turned up significantly. For the next 6 months, China is going to lead the world in terms of growth and stimulus. Really attractive on a risk/reward basis compared to the rest of the developed world.

Believes markets will have soft landing after turbulent months. Low unemployment levels, high savings levels, strong currency & relatively low interest rates will carry economy. Supply chain issues will normalize soon. Bullish on the markets and many quality companies available for good prices. Bulk of portfolio is diversified to protect against turbulence.

There's disappointment in the air like today when stocks surged, but closed way off the highs. And it's like this pattern will continue.

OPEC exhaustion, increased consumer demand, falling inventories and under-investment from energy companies leading to robust energy fundamentals. Seeing high energy prices, lean cost structures and commitment from companies to return capital back to shareholders. Expecting company share prices to appreciate back to historical levels.

Sector trading at extremely low free cash flow multiples. Believes party is just getting started for energy investors. Expecting a lot more share appreciation going forward.

Jamie Dimon's warning of an "economic hurricane". A very vocal CEO, who has his hands on the pulse of the US economy. He also said some positive things, such as loan growth is good and the US economy and consumer are doing well. We all know about the bad stuff. Let's talk about the good. US economy may not grow as much as expected, but it's doing fine. At the beginning of 2022, the only thing we were worried about were supply chain issues. He's hopeful that a lot of bad news is now in the market.

Positive thoughts on the markets. Maybe some of supply issues will be fixed. Maybe the Fed has already done a lot of damage with its actions and communications. Today's warning by MSFT was based on foreign exchange, not on fundamentals of the business. We're jumping the gun on fretting and worries. For long-term investors now's your opportunity, though stocks could go lower. You want to buy when stocks are low, not when everyone wants to own them.

When the economy's thriving, you get inflation. There's no playbook for the type of inflation we have. That's why central banks are freaking out. They're entire being is to knock out inflation and keep unemployment low. It's a "man with the hammer" syndrome, just keep on doing what they're doing. US has 11 million job openings. If we get some inflation prints in the next couple of months that are dramatically lower, that will turn around the market in the second half of the year, and we'll be off to the races. If not, we'll continue to have this choppiness.