The gifts keep coming
So today markets down quite a bit so far. I’m now in buying mode looking for bargains. Apple offers itself up once again as an ever better bargain. The lower it goes the lower the risk and higher the reward. Don’t be an investor where the only thing you don’t buy when its on sale is stocks.
All the panic is mostly excacerbated by program and algorithic trading. I don’t take my cues from that. I’m looking at companies and their results. So far earnings and outlooks have been very strong. The jobs report today disappointed but keep in mind these companies all got these results with these unemployment rates. The key metric is that some jobs are being created. There is what I believe structural unemployment where people have left the workforce and never coming back. You have to think of this as the new “base” we are now working off of.
Here is my example. Imagine USA has 250 million workers. Next year 50 million lose their jobs and NEVER get them back. So now you have 200 million workers. Let’s say these grow by a couple million a year. So what you have is a new baseline. We are never going back to the old employment figures in my view. We will gain some ground once housing takes off eventually but we’ll never regain that 4% unemployment rate. I’m thinking more around 10%. Some may say “we are at 8.1% now!”. Well that is not the true unemployment rate. I’m talking about everyone that is no longer collecting or fell out of the labor pool. Many think this is closer to 15% or higher now.
To sum up this is all bullish. The employment slide is over and we are working off a new base. Ignore the noise and invest for the long term. If stocks go down buy more and take advantage of it, don’t run from it. In 10 years your portfolio will thank you. Those who listened to all the doom and gloom one, two and three years ago missed this great run and will miss the next one.