Minuk's Musings and a Recession, 100%

I don’t mean to alarm you but please make sure you are sitting down for this week’s Musings.

 

We are now 100% certain that there will be a recession in the next 12 months which will cause large losses to your hard-earned retirement nest egg.

 

….

 

Isn’t that scary?

 

I’m not kidding you that this was the headline 2 years ago today from Bloomberg Economics. I took a snapshot at the time…

 

 

 

Financial media is very alarmist and makes money from keeping your attention glued to their stories. And that is why they focus on our fears and our greed.

 

Two years on, inflation has come down from 7.7% to 2.4% (USA), the stock markets have sustainably marched higher and there was no recession in 2023 so Bloomberg Economics was very wrong.

 

Focusing in on the stock market aspect, why have stocks continued to rise?

 

One core reason is that great businesses run by some of the smartest people on the planet keep finding ways to make more money and grow their earnings.

 

Netflix is a good example, reporting strong earnings last night. Their future includes plans for live events and sports, getting into the video games arena, and more tiering of price points with different benefits for each. The stock is up 10.5% today on the news and it has more than doubled since Bloomberg’s fear mongering headline 2 years ago.

 

 

 

Hope you have a nice weekend.

 

Rich

Investment Advisor