A wild week. Declining prices on Wednesday, followed by an enormous rally on Thursday and Friday.
The Wednesday decline was very possibly a reaction to the disappointing absence of a Republican “red wave” that suggested the Federal government might remain in Democratic control. The ensuing rally, while officially attributed to good inflation news, was also quite possibly driven by investor relief that Democratic control of the U.S. has been at least neutralized by the election outcome – if not flipped entirely to Republican control as anticipated via polls and voter registration data (suggesting more Democrat cheating in the form of ballot harvesting/mail dumps occurred in key states).
The inflation relief, to the degree it supported the rally, was based on CPI data suggesting inflation has at least peaked, and that the Fed may as a result slow the extent and frequency of more interest rate increases.
Most of our stocks participated in the rally, although several in Level 1 did not, leaving Level 1 once again lagging the performance of the Level 2 and 3 composite lists.
Other notable news was the default of (purposeful fraud by) the FTX crypto exchange. In hindsight, everyone suddenly realizes Sam Bankman-Fried was not a genius but a con (think Elizabeth Holmes and Theranos). How anyone could have entrusted billions to this loon (and his dimwitted girlfriend Ellison) is a sad commentary on why allowing woke firms to invest your money in progressive pursuits like ESG (environment, social and corporate governance) as Blackrock Funds do or DEI (diversity, equality and inclusion) like J.P. Morgan does is a recipe for capital loss just like FTX’s purported mission of EA (“effective altruism”). Go woke, go broke, indeed.
Better to manage your money yourself, so you know where it is going and you maintain complete control at all times. As of right now, SBF is missing, along with $2 billion of other people’s money. Makes Bernie Madoff look like a street-corner hustler in comparison and P.T. Barnum’s observation of a “sucker (“wokester”) born every minute” so true.
Institutional investors like Washington gridlock – means no sudden legislative surprises – so stock prices may rally more as the year comes to an end, even though many economic problems remain unresolved.
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