The Pomp Letter
The Pomp Letter
Strong Stocks Befuddle Bearish Investors
1
5
0:00
-2:40

Strong Stocks Befuddle Bearish Investors

1
5

READER NOTE: I am hosting the first book signing for my new book, How To Live An Extraordinary Life, in New York City on Monday September 30th at 7pm. There will be a short discussion about the book and then I will sign copies for anyone who attends.

You can RSVP to come to the event by clicking here.

RSVP for Book Signing on Monday


To investors,

The debate around a potential recession continues to rage on. Bearish capital allocators are yelling and screaming about sky-high valuations in the largest tech companies. But Michael Antonelli shared a great graphic that argues the opposite — current valuations are nowhere near the peak dot com valuations.

Image

The rebuttal to the bears doesn’t stop there. Nick Maggiulli explains that US stock performance during the 21st century is just now catching up to the performance of the 20th century.

Image

Who would have thought the 10+ year bull market of 2010s would have left the 21st century performance so far behind the prior century. This is what happens when stocks go sideways for a decade following a big bust like the dot com insanity.

So why do stocks continue to go up and to the right?

Brent Donnelly shared a simple, yet important, insight:

“The simplest explanation for why stocks go up is not the Fed's balance sheet, or passive flows, or fake government economic data... It's corporate earnings.

It's logical and it explains many market mysteries like why MAG7 has become such a huge part of the indices. They earn more than their peers. Way more.

Earnings don't go straight up, obviously. But this chart shows you why it's so hard to make money short stocks. They have many tailwinds -- and shorts face many headwinds (borrow, negative carry, risking infinity percent to make 100%, worst companies are hardest to borrow, etc.)

This is from Sam Ro this weekend.”

Image

Occam’s Razor — the simplest explanation is the most likely. But there is something else happening in markets that may surprise you.

Wall Street Journal’s Gunjan Banerji highlights the Federal Reserve cut interest rates, yet money-market funds are still seeing strong inflows. This is allowing money-market funds to collectively reach new all-time high records for AUM.

Major narrative violation.

Image

These narrative violations are going to continue to happen because there is more money in the system. People have to put the capital somewhere.

Overall, those who are bearish will continue to be bearish. No amount of data or logic is going to convince them otherwise. But that doesn’t change the truth. It is hard to see a bearish argument over a 5+ year outlook when cheap capital is coming into the market.

It is called stimulus for a reason.

Hope you all have a great weekend. I’ll talk to everyone Monday.

-Anthony Pompliano

Founder & CEO, Professional Capital Management


Podcast — Anthony Pompliano

James Lavish is the Co-Managing Partner of the Bitcoin Opportunity Fund, and is the author of the ‘The Informationist’ a weekly newsletter that simplifies financial concepts.

In this conversation, we break down the macro environment, how inflation has been ravaging America, national debt & the future impact on the economy, bitcoin, potential solutions, risk of CBDCs, and where the world is going. 

Listen on iTunes: Click here

Listen on Spotify: Click here


James Lavish Explains The Risks For National Debt & Bitcoin As Potential Solution


Podcast Sponsors

  1. Gemini is the safe and secure way to trade crypto. Use code Pomp100 and start trading crypto to earn $100 in BTC. 

  2. Xapo - Xapo Bank is the only way to bank with Bitcoin. 

  3. CrossFi is the Apple Pay for Crypto. For the first time in history, anyone with a web 3 wallet can spend crypto through a physical or virtual Visa card where Visa is accepted.

  4. Domain Money makes financial planning straightforward and accessible.They tailor plans to your personal priorities and goals, whether it’s buying a house, funding college, or taking that dream vacation.

  5. iTrustCapital allows you to buy and sell cryptocurrency in a tax-advantaged crypto IRA. Open and fund an account today to receive a $100 USD funding bonus.

  6. ResiClub - Your data-driven gateway to the US housing market.

  7. Professional Capital Management - Anthony Pompliano’s asset management firm is now on Linkedin. Please subscribe by clicking here.


You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren’t finding this valuable. Nothing in this email is intended to serve as financial advice. Do your own research.


Discussion about this podcast

The Pomp Letter
The Pomp Letter
Pomp's daily newsletter analyzing the business, finance, and technology industries. Join 260,000 subscribers by signing up below.