Dave Portnoy day trading is ‘sign of a market top’: Dennis Gartman
University of Akron Endowment Committee Chair Dennis Gartman on Barstool Sports founder Dave Portnoy getting into stock trading.
I have always thought — and I have always been taught — that recessions, diseases, riots, the destruction of property, chaos, etc. will be deleterious, materially, to equity valuations.
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I’ve been wrong of late for this seemingly illogical thought.
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Instead, in 2020, we’ve seen that recession, disease, riots, destruction of property and chaos are beneficial to equity valuations as long as the monetary authorities do indeed throw all caution to the winds and remain massively expansionary.
As I have said in countless speeches, television appearances and radio interviews since then, we must always understand that the Fed’s “margin account” is, by definition, almost infinite. At the very least, it is larger than any of ours.
Here we are four-plus months into the COVID-19 shutdown/circumstance/pandemic and the harsh reality is that bringing our entire economy to a halt as quickly and as “violently” as we have is not something we can reverse as easily, as quickly and as violently.
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The hard truth is that machines and machinery rust; workers go stale and forget their skills; trade lines are broken and are difficult to repair.
Some things will survive and may even prosper in the future including Amazon, Zoom, Nvidia, et al, but others will be nearly impossible to start again.
Restaurants, hotels, local stores, barber and beauty shops, auto repair stations (the list can and will go on) have closed their doors, hopefully temporarily, but in many instances, the closures are already permanent.
Yes, economies can be rebuilt, but the harms done to address the virus are harms nonetheless.
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Hope does spring eternal in the minds of many investors. Hope, however, is at best a very difficult investment partner.
The signs of ill-advised, naive, young speculators rushing into the markets are everywhere. They remind me of Joseph Kennedy’s decision to exit the stock market in early ’29 when he began receiving stock tips from the young man who shined his shoes.
As Kennedy reportedly said, “When the shoeshine boys have tips, the stock market is too popular for its own good.”