“This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” - Winston Churchill, 1942 This week marked the end of the semester for me, as classes ended on April 30 and the students are now in finals week. Next week will be graduation festivities for all, including my youngest. It was definitely the end of a phase of life for many this week.
Thank you, Beachman! It is quite exciting that all of our kids are now off into their career journey.
The markets and the economy are certainly difficult to navigate. Expectations have gotten high as they tend to when we have had a good run. This make me feel like there is a looming disappointment and there have been for many names which are summarily punished by investors. I completely agree that well-run companies have many levers to pull and that is what we are seeing.
Richard - Congrats on the graduation of your youngest child. What a proud achievement for the padawan as well as the Jedi masters (parents). Next year, we will be celebrating two graduations in our family - one from college and the other from high school. Yes, my wife and I planned it such that we only have one kid in college at a time. LOL.
I always read your post as soon as possible after it hits my inbox and this week I was not disappointed. I rarely am. I continue to be intrigued by your students' work especially the economic modeling and applying AI to your investing process..please keep us informed on that front.
"Sell in May and go away" is top of mind for me as an investor...many conflicting macro and market signals that are keeping us guessing. 2024 could shape up to be an average year of returns (7-9%) in the face of 1.5-2% GDP growth and higher earnings growth predicated on lower sales. Overall, SP500 earnings are expected to grow by 5% in Q1, by almost 10% in Q2, almost 9% in Q3 and more than 17% in Q4. These forward estimates are bullish for markets, but they are quite a ways away on the calendar and you will note that they are about earnings growth and not revenue growth. Well run companies have many levers at their disposal to show higher earnings in the face of slower sales i.e. cut headcount, stop hiring, shut down side projects, pay off expensive debt etc.
Thank you, Beachman! It is quite exciting that all of our kids are now off into their career journey.
The markets and the economy are certainly difficult to navigate. Expectations have gotten high as they tend to when we have had a good run. This make me feel like there is a looming disappointment and there have been for many names which are summarily punished by investors. I completely agree that well-run companies have many levers to pull and that is what we are seeing.
It will be an interesting summer for sure.
Have a great week!
Richard - Congrats on the graduation of your youngest child. What a proud achievement for the padawan as well as the Jedi masters (parents). Next year, we will be celebrating two graduations in our family - one from college and the other from high school. Yes, my wife and I planned it such that we only have one kid in college at a time. LOL.
I always read your post as soon as possible after it hits my inbox and this week I was not disappointed. I rarely am. I continue to be intrigued by your students' work especially the economic modeling and applying AI to your investing process..please keep us informed on that front.
"Sell in May and go away" is top of mind for me as an investor...many conflicting macro and market signals that are keeping us guessing. 2024 could shape up to be an average year of returns (7-9%) in the face of 1.5-2% GDP growth and higher earnings growth predicated on lower sales. Overall, SP500 earnings are expected to grow by 5% in Q1, by almost 10% in Q2, almost 9% in Q3 and more than 17% in Q4. These forward estimates are bullish for markets, but they are quite a ways away on the calendar and you will note that they are about earnings growth and not revenue growth. Well run companies have many levers at their disposal to show higher earnings in the face of slower sales i.e. cut headcount, stop hiring, shut down side projects, pay off expensive debt etc.