The Mariners are playing in their first postseason since 2022 and won their first division title since 2001. What a draught! They split this weekend with the Detroit Tigers, to go back to Detroit for a couple games. It would be fun to see the Mariners in the Championship Series, but they have some work to do. The other team that at this point is likely to make the Championship Series is the Toronto Blue Jays. Both teams were part of the 1977 expansion, and it would be fun to see those two teams play each other. Although Toronto already has two World Series world championships, while the M’s are still the only team to have never made it to the Series. Here's to erasing that annoying trivia fact from reality!
Back to the financial world. Paul Tudor Jones was on CNBC this morning talking about the similarities between now and 1999.
If you were around during that time, it was both fun and heartbreaking not long after. Here are a couple of his quotes.
This is exactly why we put our model together coming out of 2008. It has evolved since then, but still remains focused on long-term growth and being mindful of volatility. I think the index holders, the ‘buy and hope’ crowd, may be disappointed when emotions come back into the picture. If Tudor Jones is right, it’s important to remember the magnitude and direction of what that could translate to. The NASDAQ went down nearly 80% in 2000-2002, while value-oriented stocks performed quite well.
Will this time play out exactly like the past? Probably not. You know the old saying, History doesn’t repeat itself, but is sure does rhyme.
With any luck our model will note these issues ahead of time and will be able to save you a tremendous amount of volatility in your accounts. For now, even against our gut, we are pretty much fully invested and continue to be overweight small and mid-cap stocks.
Part of the reason the market is going up is that people think it should go down. Counterintuitive, right? Think about it, when everyone is expecting it to go down, who’s left to “make” it go down? On the flip side, if everyone think it’s going up, who’s left to make it go up? The market tries to frustrate as many people as possible.
Speaking of frustrating people, here is a chart of economists and their view of a recession in the next 12 months.
You can see that every one of them thinks it’s more likely to have a recession 12 months from now than back in January. I happen to think they’re right, but I also don’t think it will be a bad recession. Now, if something happens like Paul Tudor Jones is talking about, then all bets are off. For now we can just follow the model and see what happens, knowing that we are keeping a close eye on things.
That’s it for this week. Please let us know if you have any questions or comments about this or any other topic. We will be happy to have a conversation, especially if it’s about the Mariners!