What Did We Learn From The Panic/Selloff

I like to say if you are going to panic, panic early. My friend Morgan Housel has a classic post up titled’ When Things Get Wild‘ which has so many gems but this one about panic stood out:

Just 10 days ago I was getting blitzed with panic texts and tweets from friends and Schwab emails about the bear market that was about to ravage my portfolio.

We had TWO ‘Markets in Turmoil’ specials from the predictable CNBC. They are the masters of panic. I chronicled the silliness on the blog last Monday.

Apple has since been banged up, but the market as a whole has been in a strong bounce mode.

Tomorrow will be a much better time to panic. If the markets keel back over next week you will have calmly panicked early.

So what has changed since September (the last all-time high in the indexes) and the ‘midterm panic of 2018’?

I have no idea to be honest, but here is a list of stocks at all-time highs tonight:

Mostly yawner companies you have never heard of. Boring is cool at the moment.

A few months ago it was sexy enterprise software stocks. Six months ago it was all Chinese internet stocks.

The good news is the all-time high list was just one stock 10 days ago. Leaders are quickly emerging once again.

I own McDonald’s and Twilio which are on the list. Johnson and Johnson, Disney and Etsy are inches away (I own them as well).

Google, Amazon and Apple have been battered but not beaten.

I look a this chart from Ben Evans and say I am grateful for the panic because I have a good idea where the puck is still going (directionally).

Internet, ecommerce, smartphones….while the players may change, the big trends remains in place.

Fintech (crypto too), weed, gaming and sports betting (more on that in another post soon) will remain massive growth opportunities as well.

Hopefully this gets you up to speed at a high level for how I am thinking.

All that said, I truly have no idea what’s up next for the markets as a whole.

For the last month I have been in STFR (sell the fu*king rip) over BTDF (buy the fu*king dip) mode.

It’s nice to have a panic behind us but I am not sure if that was ‘THE’ panic or a longer drawn out bear market is immediately ahead.