First, it was Warren Buffett turning bullish on tech, and now none other than Dennis Gartman has thrown in the towel on "things that if dropped on your foot shall hurt” and will instead focus on "buying the things that are either replacing these simple things or are making these simple things better."
From his latest note:
We stand in awe of the sheer relentless nature of the global bull market. Unlike the parabolic rise by Bitcoin, for example, the trend from the lower left to the upper right in global equity prices is measured… is reasonable… is relentless and is, in the end, majestic in nature. It will stop when it stops and not a moment before. Every time we think that the market is overbought, it consolidates and moves higher.
It is interesting then to note that the CNN Fear & Greed Index has been “locked” in recent days a few points either side of 50, where 50 is evenly balanced between the bullish and bearish forces at work. When the Index is below 20 and has turned higher, the market is oversold and due for a rally. When it is above 75 or so and turns down, the market’s over-bought and due for weakness. But at 50 it is neutral… utterly and completely… allowing the trend at hand to obtain a while longer and the trend at hand is clearly a bullish trend.
In retrospect we allowed our prosaic, old-guard beliefs in simple things to color our view of the markets; that is, we have tended to err, even when bullish of stocks, to own metals, trains, boats, bearings et al. As always, we’ve wanted to own “The when instead we should have understood the disruptive nature of modern technology and should have been buying the things that are either replacing these simple things or are making these simple things better.
We shall never be able to step into the pharmaceutical equities for we are not able, nor willing, to make implied bets upon whether a drug in place shall meet FDA approvals or not. We’ve not that expertise, nor shall we ever have it. However, we should be able to ascertain what companies will make mining better; what companies will help run railroads run more efficiently; what high-tech companies will replace crews on ships with autonomy et al. That we have to do; that we shall do. The game has changed and so must we.
P.S.: for those wondering, here is Gartman's YTD P&L and reported exposure in his "retirement account"
In our retirement account…which lags badly behind a simple long position in global equity for we are barely profitable upon the year-to-date, and we do indeed mean barely… we are long of gold in EUR and Yen denominated terms. We own shares in an entertainment company which we bought earlier this week to capture the dividend on its ex-dividend date but whose prices quickly rose well beyond the dividend we captured and turned higher sufficiently to render the chart decidedly bullish (SIX) and we are long of the cotton ETF, BAL. In all likelihood we shall soon be adding to the gold positions and to the “entertainment” stock, but we may… with the operative word here being “may”… exit cotton
Time to reevaluate that long FAANG basket perhaps...