In a perverse way, this is going to ultimately end up as a positive for the US stock market. At this stage, I think the US market needs nasty and socialistic data in order to break the buck. If we break the buck, short sellers get squeezed, and the US market continues to make higher lows versus November’s.
Breaking the buck will also, in a Darwinian way, force terrible management teams in corporate America to face the You Tubes of being the guys that fired their people right before export demand accelerates. That type of reactive management stands in stark contrast to our views of proactively managing risk. Those execs who built capacity at the economic cycles top, and bought back stock to pander to their momentum investor wants, behaved, as our President put it, “shamefully.”
The only way to right size this sinking ship of public equity market cap is to let the liquid long American Capitalist of the New Reality start eating into these reactive corporate management team’s cakes.
That’s change I can believe in.
Keith R. McCullough
CEO / Chief Investment Officer