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Most explosive stock market rally in history

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We’re witnessing the most explosive stock market in history. We’re seeing a spectacular stock market rally.

We’ve witnessed the greatest 50-day rally in the history of the S&P 500. The S&P 500 has increased 37% over the past 50-days.

Ten weeks ago, March 23, 2020, the Dow dropped all the way to 18,591 points. The biggest gain ever in such a short timeframe. Today, June 4, 2020, the Dow Jones index has peaked above 26,274 points.

Why…T.I.N.A. (There is no alternative to stocks)

There are fewer publicly traded companies to invest in today than thirty years ago. In the 1990’s, there were about 8,000 companies listed on American stock exchanges. Today, there are about 4,000 publicly traded companies on American stock exchanges which represents a fifty percent cut.

Furthermore, there are fewer shares of company stocks available to be traded. Share buy-backs by U.S. companies have taken 20% of companies’ shares off the market.

Essentially, the number of available shares have been dramatically cut, yet the demand for share have been vastly increased the demand for shares. The market is awash in cash from the Federal Reserve loose monetary policy and trillions of dollars from 401K plans.

Economics 101 reveals that cutting the supply of stocks while increasing the demand for stocks cause the price of stocks to go up.

And don’t forget about investor psychology, the economy has entered the return to work phase and the economy is on the move again. Animal Spirits are on the rise again.

Regarding the S&P 500 index, 159 stocks in the index are up for the year an average of 13% / 350 are down year-to-date an average of 20%. And, there are $4 trillion still sitting on the sidelines in money market accounts.

FOMO (Fear of missing out)

Fear of missing out can be extremely expensive. When the equity market has explosive moves where it goes up this high and this fast, an investor can feel that they’re “being left out and left behind”. As a result, they start paying top dollar for expensive and overbought stocks. That is no longer investing…investors are buying high hoping for higher.

Sources: CNBC and Fox Business News

Silence is not an Option

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“We have to stand together with the victims of murder, marginalization, and repression because of their skin color, and with those who seek justice through protests across our country.”  Ben & Jerry’s Ice Cream

Many Fortune 500 corporations and their CEOs have released statements condemning police brutality and racism within American society.

In my view, most of the statements or pledges to fund Black organizations are nothing more than marketing statements and platitudes created by corporate marketing and legal teams trying to position their organizations on the moral and politically correct side of this legitimate protest. Words don’t change much, actions do!

One glaring exception is the ice cream company Ben & Jerry’s press release. Their statement stands as one of the few exceptions to the norm:

Silence Is NOT An Option (by Ben & Jerry’s)

“All of us at Ben & Jerry’s are outraged about the murder of another Black person by Minneapolis police officers last week and the continued violent response by police against protestors. We have to speak out. We have to stand together with the victims of murder, marginalization, and repression because of their skin color, and with those who seek justice through protests across our country. We have to say his name: George Floyd.

George Floyd was a son, a brother, a father, and a friend. The police officer who put his knee on George Floyd’s neck and the police officers who stood by and watched didn’t just murder George Floyd, they stole him. They stole him from his family and his friends, his church and his community, and from his own future.

The murder of George Floyd was the result of inhumane police brutality that is perpetuated by a culture of white supremacy. What happened to George Floyd was not the result of a bad apple; it was the predictable consequence of a racist and prejudiced system and culture that has treated Black bodies as the enemy from the beginning. What happened to George Floyd in Minneapolis is the fruit borne of toxic seeds planted on the shores of our country in Jamestown in 1619, when the first enslaved men and women arrived on this continent. Floyd is the latest in a long list of names that stretches back to that time and that shore. Some of those names we know — Ahmaud Arbery, Breonna Taylor, Oscar Grant, Eric Garner, Trayvon Martin, Michael Brown, Emmett Till, Martin Luther King, Jr. — most we don’t.

The officers who murdered George Floyd, who stole him from those who loved him, must be brought to justice. At the same time, we must embark on the more complicated work of delivering justice for all the victims of state sponsored violence and racism.

Four years ago, we publicly stated our support for the Black Lives Matter movement. Today, we want to be even more clear about the urgent need to take concrete steps to dismantle white supremacy in all its forms. To do that, we are calling for four things:

First, we call upon President Trump, elected officials, and political parties to commit our nation to a formal process of healing and reconciliation. Instead of calling for the use of aggressive tactics on protestors, the President must take the first step by disavowing white supremacists and nationalist groups that overtly support him, and by not using his Twitter feed to promote and normalize their ideas and agendas. The world is watching America’s response.

Second, we call upon the Congress to pass H.R. 40, legislation that would create a commission to study the effects of slavery and discrimination from 1619 to the present and recommend appropriate remedies. We cannot move forward together as a nation until we begin to grapple with the sins of our past. Slavery, Jim Crow, and segregation were systems of legalized and monetized white supremacy for which generations of Black and Brown people paid an immeasurable price. That cost must be acknowledged and the privilege that accrued to some at the expense of others must be reckoned with and redressed.

Third, we support Floyd’s family’s call to create a national task force that would draft bipartisan legislation aimed at ending racial violence and increasing police accountability. We can’t continue to fund a criminal justice system that perpetuates mass incarceration while at the same time threatens the lives of a whole segment of the population.

And finally, we call on the Department of Justice to reinvigorate its Civil Rights Division as a staunch defender of the rights of Black and Brown people. The DOJ must also reinstate policies rolled back under the Trump Administration, such as consent decrees to curb police abuses.

Unless and until white America is willing to collectively acknowledge its privilege, take responsibility for its past and the impact it has on the present, and commit to creating a future steeped in justice, the list of names that George Floyd has been added to will never end. We have to use this moment to accelerate our nation’s long journey towards justice and a more perfect union.”

“Bravo Zulu” / well done to Ben & Jerry’s Ice Cream.

Source: https://www.benjerry.com/about-us/media-center/dismantle-white-supremacy

George Floyd Murder and the Dominoes of Racial Injustice | The Daily Show with Trevor Noah

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“That’s the thing people don’t understand sometimes. We need people at the top to be the most accountable, because they are the ones who are basically setting the tone and tenor for everything we do in our society. It’s the same way we tell parents to set an example for their kids, the same way we tell captains or coaches to set an example for their players, the same way we tell teachers to set an example for their students. The reason we do that is because we understand in society that if you lead by example, there is a good chance that people will follow that example you have set. If the example law enforcement is setting that they don’t adhere to the laws, then why should the citizens of that society adhere to the laws when in fact the law enforcers themselves don’t?” Trevor Noah

https://youtu.be/v4amCfVbA_c

On a recent episode of “The Daily Show,” Trevor Noah delivered a passionate commentary of George Floyd’s murder at the knee of Minneapolis Police Officer Derek Chauvin, the activism across the nation and world his death has spurred, and the mixed reactions of Americans to those protests, unrest and looting — particularly calling out those denouncing looting.

Read more:

https://www.vanityfair.com/hollywood/2020/06/trevor-noah-george-floyd-protests

Power of Vulnerability

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In a speech that Teddy Roosevelt gave in 1910, Roosevelt said:

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly.”

The powerful Roosevelt quote resonated with Dr. Brené Brown, a research professor at the University of Houston Graduate College of Social Work, who gave the blockbuster TEDTalks “Brené Brown: The Power of Vulnerability”.

In the introduction to her book, Dr. Brown comments on Roosevelt’s words, which she says perfectly encapsulate her research into why she and other researchers find being vulnerable such a hard thing to do.

According to Dr. Brené Brown, Ph.D, in he book, Daring Greatly: How the Courage to Be Vulnerable Transforms the Way We Live, Love, Parent, and Lead:

“When we spend our lives waiting until we’re perfect or bulletproof before we walk into the arena, we ultimately sacrifice relationships and opportunities that may not be recoverable, we squander our precious time, and we turn our backs on our gifts, those unique contributions that only we can make,” says Dr. Brown. “Perfect bulletproof are seductive, but they don’t exist in the human experience.”

Here are a summary of the ThenPower of Vulnerability key points:

  • Vulnerability makes you authentic and allows you to feel love, belonging and joy
  • To be vulnerable you have to:
  • – Internalize that you are a worthy (of being loved) and enough the way you are
  • – Have the courage of showing up and engaging even if could hurt
  • “Your willingness to own and engage your vulnerability determines the depth of your courage”

“Daring greatly means the courage to be vulnerable. It means to show up and be seen. To ask for what you need. To talk about how you’re feeling. To have the hard conversations,” according to Dr. Brown.

Source: 5 insights from Brené Brown’s new book, Daring Greatly

  1. https://thepowermoves.com/daring-greatly-summary/

Principles for Investing Success | Vanguard Investment Management Company

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Whatever financial challenge you’re facing, you can put yourself in a better financial position by setting goals, planning now and investing for the long term. The sooner you start, the sooner you’ll get on track.

Investing for the long term in order to grow your money is a marathon, not a sprint. An investment’s annual return provides perspective and growth over time.

https://vgi.vg/2Kyh3a3

Goals: Create clear, appropriate investment goals. Create appropriate investment goals you can measure and attain. Defining your goals clearly and planning realistic ways to achieve them can help protect you from common mistakes that could derail your progress.

https://vgi.vg/3c9ky3b

Balance: Develop a suitable asset allocation using broadly diversified funds. Create a sound investment strategy by choosing an asset allocation in line with your financial objectives. Build your allocation based on reasonable expectations and diversify your portfolio to avoid exposure to unnecessary risks. Balance is the key:

https://vgi.vg/3f7Qh6u

Costs: Minimize costs. Markets are unpredictable. Costs are forever. The lower your costs, the greater your share of an investment’s return. And research suggests lower-cost investments outperform higher-cost alternatives. You can’t control the markets, but you can control your costs and tax liability:

https://vgi.vg/2z6fQEv

Discipline: Maintain perspective and long term discipline. Investing can provoke strong emotions. During times of market uncertainty, you may find yourself tempted to make impulsive decisions or you may experience “paralysis by analysis,” unable to decide on how best to implement an effective investment strategy or when to rebalance your portfolio. Discipline and perspective can help you remain committed to a long-term investment philosophy through periods of market uncertainty.

https://vgi.vg/3c8ihFg

References:

  1. https://www.vanguard.com.au/adviser/en/article/cec-investment-philosophy/vanguards-principles-for-investing-success

Miscalculating Risk: Confusing Scary With Dangerous | Brian Wesbury, First Trust Economics Blog

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“Coronavirus…is the first social media pandemic.”

The coronavirus kills, everyone knows it. But this isn’t the first deadly virus the world has seen, so what happened? Why did we react the way we did? One answer is that this is the first social media pandemic. News and narratives travel in real-time right into our hands.

Brian Wesbury, Chief Economist

This spreads fear in a way we have never experienced. Drastic and historically unprecedented lockdowns of the economy happened and seemed to be accepted with little question.

We think the world is confusing “scary” with “dangerous.” They are not the same thing. It seems many have accepted as fact that coronavirus is one of the scariest things the human race has ever dealt with. But is it the most dangerous? Or even close?

There are four ways to categorize any given reality. It can be scary but not dangerous, scary and dangerous, dangerous but not scary, or not dangerous and not scary.

Clearly, COVID-19 ranks high on the scary scale. A Google news search on the virus brings up over 1.5 billion news results. To date, the virus has tragically killed nearly 100,000 people in the United States, and more lives will be lost. But on a scale of harmless to extremely dangerous, it would still fall into the category of slightly to mildly dangerous for most people, excluding the elderly and those with preexisting medical conditions.

In comparison, many have no idea that heart disease is the leading cause of death in the United States, killing around 650,000 people every year, 54,000 per month, or approximately 200,000 people between February and mid-May of this year. This qualifies as extremely dangerous. But most people are not very frightened of it. A Google news search for heart disease brings up around 100 million results, under one-fifteenth the results of the COVID-19 search.

Read more: https://www.ftportfolios.com//blogs/EconBlog/2020/5/26/miscalculating-risk-confusing-scary-with-dangerous

Brian Wesbury is Chief Economist at First Trust Advisors L.P.

Mindset: Creating Your Own Opportunities

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“You either walk inside your own story and own it or you stand outside your story and hustle for your worthiness.” Dr. Brené Brown, Ph.D

Dr. Brené Brown’s research has shown that you are the only person responsible for your life story and its outcomes. Not your mother; not your spouse; and, definitely not your “bestie” are responsible. You , and you alone, must take responsibility and assume accountability for your thoughts, your habits and your behavior that have resulted in the outcome of your current life.

If you want things to happen in your life for the better and want to improve the trajectory of your life, then you need to do something about it. If you just sit about waiting for opportunities to come to you or waiting for the government to come to the rescue, it is likely that they will never happen.

You, and only you, need to make your own opportunities in life if you want to become a success. Set goals and take action to steer your life in the direction you want it to go, and take advantage every chance and opportunity that comes your way.

Yes, it takes courage and accepting that occasionally you will fail and ‘get your ass kicked’ in the process of creating your own opportunities.

Dr. Brown’s research on the power of vulnerability has shown that without the willingness to rumble with one’s vulnerability, you are unlikely to achieve the success and life you desire without a willingness to accept failing and accept ‘getting your ass kicked’ on occasion. Vulnerability is the emotion you experience during times of risk, uncertainty and emotional exposure.

References:

  1. https://moneyinc.com/brene-brown-quotes/

Dr. Brené Brown, Ph.D, is a professor, researcher and lecturer on the subject of vulnerability, best selling author of ‘Daring Greatly‘, and podcast host. She is based at the University of Houston’s Graduate College of Social Work.

Memorial Day 2020 – Moment of Remembrance

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Every year on Memorial Day, the “National Moment of Remembrance” invites Americans to pause at 3 pm (local) for one minute to remember those who paid the ultimate sacrifice while serving in the Armed Forces

The National Moment of Remembrance was created to encourage Americans to observe a moment of silence and to remember and reflect on the sacrifices made by so many men and women defending our country and to provide freedom for all.

Learn to enjoy every minute of your life

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“Learn to enjoy every minute of your life. Be happy now. Don’t wait for something outside of yourself to make you happy in the future. Think how really precious is the time you have to spend, whether it’s at work or with your family. Every minute should be enjoyed and savored.”
– Earl Nightingale

Tonight Show Starring Jimmy Fallon featuring bestselling author Dr. Brené Brown.

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The Tonight Show Starring Jimmy Fallon featured Professor and New York Times bestselling author Brené Brown.  Dr. Brown shared strategies for handling sudden “effing first times” during the coronavirus pandemic.

Dr. Brené Brown is a research professor at the University of Houston where she holds the Huffington Foundation – Brené Brown Endowed Chair. She has spent the past two decades studying courage, vulnerability, shame, and empathy. She is the author of five #1 New York Times bestsellers: The Gifts of Imperfection, Daring Greatly, Rising Strong, Braving the Wilderness, and Dare to Lead.

She believes that you have to walk through vulnerability to get to courage, therefore . . . embrace the suck. She tries to be grateful every day and her current motto is “Courage over comfort.”