Confusion in the Unfazed and Hysterical

The Dividend Cafe

The Dividend Cafe - The Bahnsen Group

Dividend Growth Investing, Investing, Estate Planning, Monetary Policy, Wealth Management, Business, Retirement Planning, Macro Economics

4.9 • 572 Ratings

🗓️ 3 December 2021

⏱️ 25 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

It has been a wild week in the markets, with the -900 point drop of last Friday (Thanksgiving weekend) followed by a +235 point gain Monday, a -650 point drop on Tuesday, a -460 point drop Wednesday (after being up +500 points earlier in the day), and then a +620 point increase Thursday. As I type Friday, we are down -120 points, having been up +160 points earlier, so currently (at press time) reflecting a -330 point drop on the week. Now that’s a lot of ups and downs for -330 points, don’t you think?

But market ups and downs are not a problem for real investors, so why do I mention this volatility at all? Don’t people invested in the stock market (and more specifically, in the earnings streams of the great companies that make up the market) know that markets do this, and in fact, normally experience much more volatility than we have seen this year?

I would hope so. I know our clients do (how could they not?). But the subject of today’s Dividend Cafe is not the mere reality of market volatility, especially when such volatility is a mere 3% or so off of market highs. I mean, really. No, the subject of today’s Dividend Cafe is those who may be unfazed by market valuations and euphoric concerns, but go hysterical over the omicron variant.

In other words, we want to look at that which does not play into our thinking, and that which does, and why we think the media and so much general investor consciousness have their fears and non-fears exactly backward.

So jump on in to the Dividend Cafe. It will be worth your time.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Transcript

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0:00.0	Welcome to the Dividend Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life.
0:12.4	Well, hello and welcome to the Dividend Cafe. It's been a wild week in the markets, and I'm going to have plenty to say about that.
0:21.0	I'm obviously not recording in one of my studios.
0:24.1	I'm in a hotel room in San Francisco where I speak at a conference tomorrow over the weekend.
0:31.5	But we'll be back in New York City next weekend, we'll see where things go next week.
0:41.4	It's interesting.
0:42.5	As I'm sitting here recording, the markets are down about 300 points, a little more than
0:47.4	300 points in the week.
0:48.5	I mean, a pretty inconsequential activity.
0:53.0	And yet, as we know, the markets are down about 900 points on the
0:56.8	Friday after Thanksgiving. And then we had an up day of 230 this week, an up day of 630, a down day of
1:07.1	400 something and a down day of 600 something. And so far here, I'm recording Friday
1:12.7	morning. So there's still plenty of hours to go in the trading day. Markets are down a little
1:17.6	over 100. So I don't know where it will end up. But I do know this, that the subject of today's
1:24.6	talk is kind of a mixed bag around what I think is causing
1:31.8	obviously obviously some things that really ought to be concerning in the markets that don't
1:38.8	necessarily seem to be.
1:40.2	And so you can paint this as an optimistic dividend cafe in the sense that I most certainly have a more sanguine view on the ultimate market impact from this Omicron variant.
1:54.0	But then I don't think you would want to paint the entire picture sanguine based on what I feel is the sort of ignored or misunderstood or underappreciated
2:03.3	realities in financial markets right now.
2:06.2	But we're going to spend most of the time today talking about COVID.
2:08.9	So bear with me on that,
	...

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