Posted on Sunday, December 19th, 2021
23 years ago we brought home our baby girl from the hospital. It was December in New Jersey and we bundled her up for the trip home. The problem was that it was 75 degrees!! She must have wondered – Who gave her these two bumbling fools as her parents? She probably was on the verge of heat stroke! – in December!
In the weeks leading up to graduation Diane and Kayla spent weeks picking out her outfit. Diane said- “It’s gonna be cold so bundle up.” Wouldn’t you know it? The temperature on graduation day was 75 degrees!! It was a beautiful day as the sun burned off the morning clouds. The stadium held 10,000 very excited students and parents. I had to choke back tears several times. I was awestruck by all that she has accomplished, overwhelmed with pride and amazed at how quickly time has flown by. The present you ask? Diane decided to have her mother’s diamond wedding ring made into a necklace for Kayla. It was just before Diane’s 24th birthday that she lost her mother to cancer. They were the best of friends and cancer took her far too soon. At dinner, as we celebrated, it was a very touching and special moment as Diane gave Kayla her mother’s diamond. Time flies.
It was a big week for the Reilly’s and a big week for the market. The FOMC gathered and let the market know that it is looking to claw back some of the liquidity it has been providing. The options expiration on Friday has given stocks an opportunity to reset. The bulls or the bears can take over here so the first few days of next week could set the tone. Much is made of the market’s “Santa Claus Rally” which is historically the last five trading days of the year and the first two of next year. That is the period from December 27th until January 4th. Since 1928, in 78% of those periods the market has rallied at an average advance of 1.7%. In a typical 7 day period the market will rally only 57% of the time. The old saying is “If Santa should fail to call, then bears may come to Broad and Wall.” Outside of the top 5 stocks, the market has struggled for the last month. The important takeaway is that if, in a historically strong period, we see weakness then that is a bad sign for the first half 2022.Given historically elevated valuations we may be inclined to reduce risk. For now, we wait to see who wins the battle of the bulls and bears. For the moment our money is on the bulls. Have a very Merry Christmas!
….. My little engineer. Degree – BS Mechanical Engineering cum laude
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.