There is very little need for a recap of the last two months. Consistent policy failures and an inability to resolve multiple government-level issues are consistently fighting our progress.
Not to rant, but you would think global leaders would consider before acting! As a student of history, I believe the mob is wrong 99% of the time. Using finance as a weapon of war will have long-term global consequences.
To work,
There is a massive opportunity for a very productive and beneficial year ahead. But the markets have gone into extreme defense! Ideas that you would typically look at are outside the vogue! I will elaborate as we move on.
The media has been focused on the atrocities of Ukraine; I have been focused on China.
The country may be in real trouble. Shenzhen, our port of life for all consumers, has shut down due to a COVID surge, and another primary real estate developer appears to be in trouble.
China is a rugged country for gathering accurate information, but to an experienced financial professional, they are in a steady GDP decline. Rightfully so! Europe is in recession; the USA is headed toward recession; China will have prolonged growth.
What to do with money!
205 Strong Buy #1 companies are rated at Raymond James (as of 3.10.22), our highest conviction rating. Last week alone, I found almost 50 attractive investment ideas and strategies that our firm follows.
Out of those 50, I am narrowing down ideas that stood the test of the last great recession 2008. So far, I have 18 companies and strategies that stand out.
There is no promise nor a narrative that past performance will repeat itself, but my research with the firm has been a productive place to look.
The trigger sequence for a productive year is the following:
We need three things to stop and calm down to have such a year.
Price stability in bonds + Price stability in commodities + Government policy stability = Potential massive upside in stocks.
All three are critical to long-term healthy progress, and it's feasible we could get two out of three in the coming weeks, potentially creating a massive rally in stocks in the second quarter of 2022.
But make no mistake, I am not saying we need to go full bore into the deep end, but technically / fundamentally, there seems to be a resolve approaching that will dictate how the second quarter plays out.
Even in the worst recession, you rarely get back to back quarters with type of insanity.
Christopher Lakian
Comments