Carty Capital Management
Carty Capital Management



Sorry - I was wrong

Good Morning,


For months - maybe longer, I have suggested (to the point of understandable boredom) that we should take this claim that the crowd is too bullish and complacent with, well, the largest mountain of salt your mind can fit in the frame.


These notes went on to suggest many a time, "That if you find yourself concerned the crowd has become too bullish and it is all about to end, give me two weeks of red ink and a 1,000 points down on the Dow and I will show you a crowd whose bullish reading is back in the 20's."


Long-time readers will recall we repeatedly suggest you pray for a correction as such.


As they say errors have fallen upon me and I must confess.


I was wrong.  Very wrong.


You see, it only took 6 days - and less than 350 Dow points - to witness bullish sentiment from AAII fall from the 40's to the 20's.


Read 'em and....well, weep - for joy : )






It's 350 or so points from the recent high of DOW 23,546.


Pray for more - 5 or 6 times more.


Yes, I understand the internal churn has been significant and we have already noted that more than a few times.  The market-weighted indices are skewing perspectives due to tech.


It may surprise you to note this:


Twenty-nine percent of the S&P 500 stocks are actually down on the year.


Further, if one-quarter of your portfolio is NOT the 5 big tech stocks, then this is one of those years (rare as they may be) when the broad market's solid gains are pretty far away from the most followed averages in the press.


I enter into evidence the NYSE Composite as of last evening:      + 10.52%


That's some 400 basis points below the market-weighted bloat of the S&P 500


So, I am sorry - I was way off.


It took less than half the time - and roughly a third of the points to scare many back into their foxholes.   And don't even get me started on the perils and laziness of "passive investing."


I cannot imagine how low it would be if we were actually off 1,000 points from the recent highs.


Pray for it.


I have another apology to make.  I find myself in recent months getting very, uh, shall we say, energized - when someone suggests - for the umpteenth time that day - that the world is coming to an end.


It seems to be the national pastime these days.


I have a suggestion to consider - find a new pastime.




Another Top?


You know that the new theme of "sure, I am feeling ok" is actually French for "I have already had 14 valiums today just to stop reaching for my fancy, new sell button."


That is further confirmed correct when you read a scrolling headline across the TV screen on CNBC that says:


"Dow Down 155 Points, Worst Showing Since September 5."


I kid you not, it was about 9:50 EST yesterday morning.


It's akin to something like, "Dow down 37 in last 7 minutes, worst showing since an hour ago....", which I am quite certain is in the not-too-distant-future of media.


Wake up friends - it's an ugly world out there - if one chooses to see it as such.


Or, it is the beginning of something more significant and exciting than anything we have ever witnessed.


And if you wonder just how significant, make sure you watch our 5 minute video review .


Get these tools working in your practice today as the lead advisor in your market.


The key word?  Chooses.


Ever Wonder?


....what the guy who made this call last year at RBS is doing these days?  I do.


My hunch?  He probably got a promotion for being "prudent":




By the way, we should be giggling with laughter - and welcoming - the deflationary force that is upon us.  They are squeezing costs, increasing margins, cutting out fat, creating better jobs, processes, efficiencies and technologies at a pace so fast - many do not keep up.


The best news of all - they are just getting started.


They are Generation Y.


...and if you think it feels scary now, strap in - the ride has not left the gate yet.


And one more thing - before we chuckle under our breath at how lazy they are deemed to be, I would take a moment to remind you what Baby Boomers were before the world placed itself in our hands back in the dawn of the 80's:




The good news?  You can smoke pot legally now in some places.  As Ken notes, "it will be bigger than wheat in the future."  Freaky right?


Worse?  I think I recognize some of the people in that photo above : )



In Summary


So, once again, just ponder all this in the midst of the insanity sometimes.


Me?  Ah, well, I always have my bottle of bourbon - with a bourbon mixer - and whole box of fresh, fruit-flavored TUMS.


Just remember, as boring as this is going to sound...


He who moves less wins.


Long-term thinking always wins out over short-term trading.  Worrying about the next setback sells lots of ads but makes almost no money for you.  History proves it.


Forget economics - think demographics.


It's the big picture.  It's the current under the emotionally-driven waves.


Demogronomics keeps us on the leading edge of long-term direction - but demands a much larger, more patient view of the elements at work.


If Leaving Early?


Hey, all of us here wish you and yours the very best of the Thanksgiving Holiday Week.


Travel safe.


Enjoy Family and Friends.


Be well and merry.




Pray for that correction.


Patient investors have learned Demographics Rule The Long-Term Game


Generation Y is set to do much greater things - far beyond what the Boomers accomplished - or what can be defined today.


Until we see you again - may your journey be grand and your legacy significant.

InvestingMike Williams