In November of 2022 as investors were fortifying their concrete bunkers while buying 10 gallon buckets of powdered creamy chicken flavored rice awaiting the end of the world, I put out a note titled They Are All So Quick To Abandon Ship.
At the time, this was a plea to investors to screw their heads back on straight, not falling victim to the bearish psychosis that had become endemic.
Now here we are some 600 SPX points higher, and while investor sentiment is no longer suicidal, they are still So Quick To Abandon Ship.
In this weekend's 361st edition of Zenolytics Turning Points, I outlined the case for taking our exposure back up to near 100% invested during the week ahead, after averaging this past week at roughly 50% invested, our lowest exposure in some weeks.
Along with analysis of two new positions and the case for adding to our largest position, the following excerpt from this weekend's note cannot emphasized enough:
When looking back at 2022 – early 2023 some years from now, we will confidently be able to say that it was one of the most deceptive market moves you will find during a secular bull market.
Against this frame of reference, knowing what we know about the 100 year history of secular bull markets as I've presented in my recent notes, while also understanding that the degree of effort the market puts into a deceptive result is directly proportional to the degree of output yielded as a result of the deceptive effort, a significant pullback for the rest of 2023 becomes a very low probability event.
It's not a matter of analyzing a market based on recent performance, then coming to the conclusion that being the market has moved up so far in so short a period a pullback must be due.
Rather, it is a matter of analyzing a market based on context and effort.
The effort expended to gather the hearts and minds of investors into expecting a certain outcome, tells you more about the markets future intentions than most anything else.
Additionally, understanding the context of where the market is in its largest cycle, tells you the timing of the move.
2022 was such a monstrous anomaly that every investor should do themselves the favor of understanding that the swing of the pendulum forward will be of equal if not greater significance than the swing back.
In other words, anomalies are met by equal if not greater anomalies.
Extraordinary outcomes in one direction snowball into extraordinary outcomes in unexpected directions.
Be wary of being quick to abandon ship.
It didn't work out well in November of 2022 and it won't work out well now.
Zenolytics Turning Points is 300+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. Click here for details.
Disclaimer
This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice.
This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website.
T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing.
Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding capital markets or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in, the transmission thereof to the user. With respect to information regarding financial performance, nothing on this website should be interpreted as a statement or implication that past results are an indication of future performance.
