New Address as of 10/4/24 — 60 Broad Street, 39th Floor, New York, NY 10004
DJIA: 46,358
Bubble, bubble… no toil, no trouble. Just as a prophet is not recognized in his own land, bubbles are not recognized when you’re in one. To hear the term mentioned these days is therefore perversely reassuring. The idea of a bubble, of course, is misunderstood, and therefore given a bad reputation. The distinction needs to be made between a bubble and a bubble’s consequences. Very likely this is a bubble, and to that we apply the rarely used technical term – Yippee! If a bubble you are likely to make more money in the next three or four months, then you will in the next three or four years. By definition bubbles run up one side of the mountain only to fall down the other side. The upside is real good, the other side real bad. Of course, maybe this is just your garden variety speculative market, though it has begun to quack, if you know what we mean.
You might argue the Homebuilders did a good job of anticipating the recent rate cut. Following that logic, however, might bring you to the conclusion there will be no further cuts – such has been the recent poor performance of Homebuilders and stocks like Home Depot (HD – 378). Another area you might have thought of benefiting from a rate cut is the Private Equity guys. According to Barron’s, a few bankruptcies have been the issue. As someone once said, there’s always a bear market somewhere, and we haven’t even touched on the Staples. But it is a bull market, and there’s a rotation which seems behind the Market’s enduring health. Noteworthy there, of course, are the Biotech and Pharma stocks. And as Palantir (PLTR – 185) and Nvidia (NVDA – 193) jockey for king of performance, IBM (288) and Microsoft (MSFT – 522) have shaped up pretty well. Just as you never see Superman and Clark Kent together, it’s rare to see Gold and Bitcoin rally together – they did this week. And there’s that stock which shall not be explained, Tesla (TSLA – 436).
Frank D. Gretz
PLEASE NOTE: Unless otherwise stated, the firm and any affiliated person or entity 1) either does not own any, or owns less than 1%, of the outstanding shares of any public company mentioned, 2) does not receive, and has not within the past 12 months received, investment banking compensation or other compensation from any public company mentioned, and 3) does not expect within the next three months to receive investment banking compensation or other compensation from any public company mentioned. The firm does not currently make markets in any public securities.
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