Pastrami on Rye
Posted on Sunday, April 18th, 2021
Our girl got a job!! After much consternation our daughter received an offer for an internship at Caterpillar. It has been a very stressful journey. She is an engineering major and has worked so incredibly hard over the last 4 years. She was starting to think that there was no reward after all of that hard work. Diane and I convinced her to talk to a friend that offered to coach her on her interviewing skills. She really dragged her feet but finally listened to her parents. She got the job on the very next interview! We looked like a couple of geniuses. She starts next month and is getting paid nicely. She has already asked me about how much she can save for retirement. Atta girl!
Last time we told you that we were pulling the weeds of our portfolios and watering the flowers. We had a slight pullback in the market but from there is has been all green for the last three weeks. It is almost as if the market has forgotten how to go down. Never a down day again was the cry from the NYSE floor back in the day. Analyst after analyst and pundit after pundit keeps saying that the market is dangerously overvalued. We know it is.
“From a traditional perspective, the market is fractured and possibly in the process of breaking completely.” David Einhorn Greenlight Capital Hedge Fund
The problem is that this is not a traditional market.
Momentum in markets is very powerful. Markets can remain irrational longer than you can remain solvent fighting them. We are not fighting it and going with the flow. Our proprietary indicators have not turned negative yet so we soldier on – a little less in but still in. The market will go down again but when it does it will be met with buy orders as even bearish investors are rooting for a pullback.
We agree with the analysts and pundits that there is excess speculation, leverage and fraud but we also have historically easy monetary and fiscal policy. One of the all time bull market stories made the rounds this week and encapsulates this era of fraud and speculation that goes hand in hand with all time loose monetary and fiscal policy. The latest story is about a company in NJ called Hometown International (HWIN). It is valued at just over $100 million. The largest shareholder is the CEO/CFO and Treasurer, who also happens to be the wrestling coach of the high school next door. Hometown International’s only asset is a deli! One deli! A deli that has been closed since the pandemic began and has had only $32,000 in revenue in the last two years. How he managed to get the company public I haven’t gotten the goods on yet but kudos to the wrestling coach at Paulsboro HS. The tremors are building.
While we haven’t sent out a note in a couple of weeks we did publish our Quarterly Letter which goes into much more detail about our views on the current investing climate. If you are not a client and would like to read our Letter you can find it on our website.
I think we aspire less to foresee the future and more to be a great contingency planner… you can respond very fast to what’s happening because you thought through all the possibilities, – Lloyd Blankfein
A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. – Winston Churchill
To learn more about us and Blackthorn Asset Management LLC visit our website at www.BlackthornAsset.com .
Disclosure: This blog is informational and is not a recommendation to buy or sell anything. If you are thinking about investing consider the risk. Everyone’s financial situation is different. Consult your financial advisor.