"When things don’t seem normal, we’re prone to action. Yes, we’ll wait around a bit expecting the familiar to return but we aren’t a patient species: somewhere between dogs and finches. The urge to do something overwhelms caution at some point. I believe we (the markets) are there. We’ve given up on the return of familiar. The genetic playbook is calling for action.
But I’m feeling it too. I almost raised 10 percent more cash on the morning of Thursday, Nov. 5: the day before the October jobs report release. I believe the estimate was for something like 180,000 but the whispers were that it might be lower given the poor September report and trending weakness in other timely measures. To be honest, I also thought it would be weaker but I’m getting ahead of myself. Let me back up. That Monday (Nov. 2), Eagle had played host in our St. Petersburg offices to a prominent Wall Street economist. He’s generally been a glass-is-half-full kind of guy so I expected the conversation to be reassuring. The meeting followed that script. His theme is slower for longer: slower economic growth for longer, no danger of recession anytime soon. He had no worries with the exception of – and this is an important exception – his company surveys, which were noticeably weakening. He said he believed they’d eventually turn up because of something to do with e-commerce’s perversions of Christmas retailing. Frankly, I had trouble following the argument but, as it happens, I’ve drifted into the slower-for-longer camp too so I wasn’t overly concerned about the surveys. (As an aside, the behavioral finance experts have discovered that we don’t pay as much attention to facts that don’t fit our model. We need experts to tell us that?) Anyway, I felt pretty good about my asset allocation.
But in a bit of cosmic irony, the very next day in that very same conference room, we played host to a brash, smart, up-and-coming strategist from a firm located just a little north of Manhattan. ..." Download below to read full report.
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