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Weekend Reading: What You Do Matters Most

Authored by Lance Roberts via,

Confidence is soaring…everywhere.

In last weekend’s newsletter, we showed multiple charts of surging investor confidence all at, or near, record levels. But while investors are indeed confident about the markets over the coming year, business and manufacturing surveys (sentiment) have also surged to near record levels. The National Federation Of Independent Businesses (NFIB) just released their December survey which showed a near record level of confidence for business owners.

One thing to notice is that spikes in optimism have generally occurred near peaks in the market.

Why should that be the case?

The reason is simple, exuberance tends to be disappointed by reality. When you dig down into the NFIB survey what small business owners are “saying,” and “doing,” are two different things.

For example, while business owners “SAY” they are optimistic about the economy currently, when it comes to committing their capital they are not nearly as brash. In fact, their level of planned capital expenditures continues to run at levels more normally associated with weak, or recessionary, environments.

What about consumers? They are optimistic as well.

Well, maybe not as much as you think. The survey shows that while business owners “SAY” sales should be improving, their biggest concern, which is spiking higher, is “poor sales.” 

Furthermore, notice that while there has been an immense amount of “chatter” about how the recent tax reform has lowered the burden on business which will lead to a surge in economic growth, etc., the level of concern over the amount of taxes being paid has budged from post-recessionary levels. While taxes were recently lowered, the “cost” of labor is rising which will absorb, for small business owners, much of the impact of any tax cut received. 

There is also a big difference between what the “hope” sales will be and what “actually” occurs. With such high levels of expectations currently, the risk of disappointment in future sales volumes is elevated.

While there is much “hope” that economic growth will boom this coming year due to regulatory and tax changes, history suggests the current levels of “economic optimism” are also likely to be disappointed.

Ultimately, for the markets and for investors, it is what you DO that matters the most.

Investors are currently set up for disappointment on many fronts over the next 12-24 months. While “exuberance” currently reigns, and investors are piling into risk equity with reckless abandon, the markets will continue to push higher.

Just be aware that “reality” will eventually set in.

Here is your weekend reading list.

Economy & Fed


Cryptocurrency Mania

Research / Interesting Reads

“Risk comes from not knowing what you are doing.” – Warren Buffett


spastic_colon Fri, 01/12/2018 - 16:56 Permalink

I'm reading "How to Disconnect Cable TV"

1 - call xfinity

2 - keep internet for 49.99/month (12 month commitment)

3 - buy a new modem and router (separate!)

4 - configure smart TV(s)

5 - laugh while you're not paying for commercials and liberal broadcasting

Endgame Napoleon logicalman Fri, 01/12/2018 - 18:35 Permalink

Triangulation, a Board Game:

  • Move 1 [Red Pieces]: Campaign on deporting all illegals and building a wall.
  • Move 2 [Blue Pieces]: Say you love the DACAs. 
  • Move 3 [Purple Pieces]: Talk about your negotiation skills, saying you are a tough negotiator who can hammer out an immigration solution that gives all some value. 
  • Move 4 [Blue Pieces]: Sign off on a tax cut / tax-welfare plan that increases the refundable child-tax-credit welfare up to $6,444, including for illegal aliens with US-born kids on top of their free groceries and free rent, making it easier for them to undercut low-income, American job seekers who lack unearned income from government to cover their major household bills. 
  • Move 5 [Red Pieces]: Raid some businesses that employ mostly illegal aliens, cracking down on the job displacement of underemployed citizens by foreigners who are illegally in the country. 
  • Move 6 [Purple Pieces] Reiterate the need for merit-based immigration, not welfare-based immigration. 
  • Move 7 [Blue Pieces] Meet with RINO Republicans—the ones who are hungering for a pro-DACA immigration deal that betrays the American Deplorables who voted for Republicans—saying you will sign any bill these bought-and-paid-for Swamp Creatures design in collaboration with Democrats. 
  • Move 8 [Red Pieces]: Put out a pro-Deplorables triptych of Tweets, using the recent s******e countries controversy to let DACA-loving Democrats know that you will not be a patsy when it comes to selling out the underemployed Deplorable citizens who stood in line to vote for you, thinking that there was a remote possibility that you might be some kind of America First BatMan, as opposed to just another Swampian.   
  • Move 9 [Red, Blue, Purple???]: That is the million-dollar question.



In reply to by logicalman

buzzsaw99 Fri, 01/12/2018 - 17:11 Permalink

i plan to attend a lecture given by lloyd blankfein titled "ethics and compassion in the usa, and why calling countries shitholes is immoral but bombing and plundering them is not".  /s

Dilluminati Fri, 01/12/2018 - 18:01 Permalink

On a serious fucking note I think the NFL is fixed, bovada went from +1200 to +1400 on the Eagles winning the SB, now what do those cocksckers do?  Payoff of the refs?  This is the MSM and fake news collaborating with the bookies and the refs for that sort of nonsense.  It's going to be fucking cold outside, so wtf can bovada and these assholes think?  This reminds me of Hillary that ridiculous cunt Hillary winning in a landslide.