Big Game

Since October, the stock market has been roaring higher on the idea that the Federal Reserve was winning the battle against inflation and was ready to start lowering rates. This was the much-hyped “soft landing” for the economy. Since January 12^th, the market has gone from pricing in 7 rate cuts to just 4, and the market has rallied 5%!! Jim Bianco from Bianco Research notes that the New Zealand central bank has been out in front of this economic cycle. They were the first central bank to move to higher rates in this cycle. They were the first to pause rate hikes and now, will be the first to start hiking rates again. My thesis has been that inflation will be difficult to tame and come in waves. The folks down under are feeling the heat. Are they the canary in the coal mine?  

We made the call in January 2022 that we would be in a sideways to down market for 18-24 months. Since that call, the results have been pretty poor for stocks but even worse for bonds. The S&P 500 is now up 4% from its prior record closing high in January 2022, and gold is up over 12%. Bonds are down over 9%!! We sidestepped the bond losses and have held a decent percentage of gold. We are cognizant of the gains of the last 15 weeks but have learned never to chase the market. A bull run this long hasn’t taken place since 1972. We need to stay patient here. While markets can stay irrational, stair-stepping higher week after week, when markets correct, they take the elevator down. That is how we make quick gains on the market averages.

Enjoy the Big Game. We love the Brock Purdy story and will be rooting for Cinderella to do the unthinkable and go from the last pick in the NFL Draft to Super Bowl champ.

“Short term volatility is greatest at turning points and diminishes as a trend becomes established.”– George Soros 

I think we aspire less to foresee the future and more to be a great contingency planner… you can respond very fast to what’s happening because you thought through all the possibilities, – Lloyd  Blankfein 

A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. – Winston Churchill 

To learn more about us and Blackthorn Asset Management LLC visit our website at www.BlackthornAsset.com . 

Disclosure: This blog is informational and is not a recommendation to buy or sell anything. If you are thinking about investing consider the risk. Everyone’s financial situation is different. Consult your financial advisor.