Transcript
Hello, everybody, welcome to Thursday, S&P 500 was up .3% today, but the real story, I think in terms of the breadth of the market was really good. eight out of the 10 segments of the S&P 500 were up today, which is great. And again, every time buying comes back in, it’s coming into the same areas, most of the areas that were involved in, so I like that doesn’t work every day. But it’s been, you know, pretty obvious to me where the market wants to go, especially on these updates. So that’s, that’s great.
A little bit of time, I’d like to spend just talking about some philosophy issues, you know, the overall concept of our investing is that we try to buy kind of everything with a big chunk of the portfolio, the entire broad market. And then we use these targeted indexes for these other portions. During this pandemic, we’ve actually had to reduce the broad market exposure, just because there’s too many segments of the economy that are suffering too greatly. And it’s really making the broad market underperform more than I’ve ever seen. And on the other hand, there are these targeted segments that are doing quite well. So just talk about kind of how I identify those, you know, there’s a group use surfing as an analogy, there’s a group of surfers or investors that would go out to this flat part of the ocean and say, Hey, this is the next place, the wave is going to come. And so they’re sitting out there waiting for that wave. And if they’re right, they’re going to catch that wave maybe before anybody else and enjoy that, I tend to like to look for swell to already have started before I try to get on that wave.
And so what we have found that segments of the stock market that have had over performance in the last nine months, they tend to over perform for the next 12 months. And that’s just current that changes. We look at these algorithms. But that’s the way it is right now. This is what allowed us to see what was going to run here in this recovery, and why we’ve overperformed the stock market so much. So I’d like to see some proof. I don’t want to get out on that flat spot on the ocean and hope that the wave comes there, I actually want to get on the wave after it happens. Now, I don’t make as much money that way. Because I’m not in there early. But I make more money in a lot of ways because there’s a higher probability, once I’m on that wave that it’ll continue to be able to ride that for a while.
And so just kind of this momentum. And so we do see, you know, interruptions to that momentum, which is what we’re seeing here in September. But the momentum is persisting and every time new money comes in, we see it come into the stock. So I still think it’s there. The major trend is up. What we’ve seen so far is a minor downtrend, and you know, we’ll see what happens going forward, but look forward to talking to you tomorrow. And let’s see how this goes for the end of the week. Thank you.