I Am Still Wrong

June 5, 2021
June 5, 2021 Ryan

I Am Still Wrong

Over the last month, or so, I’ve lost confidence in the equities market and investment opportunities on the long-side. Despite obvious signs of inflation and overly extended PEs (Shiller PE Ratio is very high at 37%),  the equities market continues to melt up.  I continue to be wrong.  Simply put, the post-pandemic growth is currently outweighing the rising costs of living in gas, food, housing.. almost everything.  It’s odd and not what I expected.  However, as a trader AND an investor, I have to consider the now (market still melting up) and the future (will the market succumb to inflationary pressures?).

As a trader, I’m still involved on the long side.  The market is still offering a LOT of trading opportunities and there is no reason for me to move to the sidelines.  That doesn’t mean to buy blindly, but to stay engaged with a strategic exit plan.

As an investor, I’ve shifted some of my long-term positions into strong, established companies like BMY.  I’m also in names like JPM and PG that should be able to survive some rising inflation.   Obviously, with the consumer getting out of the house and ready to  spend, my eyes and money are also involved in travel, beauty care, luxury brands, restaurants, and entertainment.  Over the next few weeks, I’ll likely continue to add to these post-pandemic opportunities.

Infrastructure stocks may have temporarily peaked.  I may be wrong here, but there are rumblings that Biden’s infrastructure bill will not be as big (total dollars) as originally proposed.  This could put a little pressure on names like CAT, CX, and others in this space. Despite a possible near-term cap, I’m still interested in these long-term – this country NEEDS infrastructure investments.  I’m currently holding CCI (5g infrastructure) and CAT (global building). I’ll probably exit HD soon as consumers spend less on their house and more on travel/dining out.  I also thing the building boom will start to cool this year, as well.

Here are few stocks I’m looking at or invested in that are related to the ending of the stay-at-home consumer.  PLNHF – Vegas/cannabis, MAR – travel/lodging, LYV – concerts, CAKE – restaurants, ABNB – travel/lodging, CAR – travel, BKNG – travel.

Trade ’em well.

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