Transcript:
Tom Vaughan:
Everybody, welcome to Tuesday, the S&P 500 was up point 7%. Today, which is really good day, actually, we had those two huge days Friday and Monday, having another carry through day on the positive side is really, really good. Google just reported earnings after the market closed, jumped 4%, you know, after hours, because they beat their expectations seems to be the theme this quarter. As far as that goes, That’s what seems to be driving this market. A couple of studies that I’ll share with you I find kind of interesting. So Oxford Economics, you know, they went back to 1965, looking at the S&P 500. And the average downturn, when you don’t have a recession is 15.4%. When you do have a recession, it’s negative 36%. That’s been one of my key points during this whole timeframe is that you do get these downturns that happen. But you really need to watch the economy at the same time. Because when you get the combination of stock market’s going down and economy going down, you can get these bigger downturns that you might want to do something else about. But we’re not seeing that right now.
We’re seeing earnings go up very handsomely, this quarter. Obviously, that leading indicators were up, you know, in December, we’ve seen a few things slow down, travel and restaurants manufacturing member came out today, it was slower in January, it’s being blamed on the Omicron, you know, variant, keeping people home, that type of thing. So, you know, we have to watch for those things. But at the moment, we’re not seeing really any inflation, recessionary pressure, just a matter of what the Federal Reserve does, and how that plays out. Obviously, there’s some concern there, but we haven’t seen anything yet to show us that these things are translating into recession. Another study that came out from David costume with Goldman Sachs, I thought was really interesting. Go back to 1950. You look at the S&P 500. If you bought the S&P 500, when it was down 10%. In any point in time, even if it went down further, the average rate of return 12 months later was positive 15%. So I think that’s kind of interesting.
You know, we did our big rebalance the last one that we did last Monday, when the market came down really hard. And the market at that time was down about 10 to 12%, depending on whether you look at you know, the close or the intraday high and low. And that worked out very well so far, obviously. And so I think that’s kind of interesting all together. I believe, personally, that part of the education, of learning how to be a good investor is really to kind of understand the history, some of the things that have happened in the past, and understand, you know, all of the ramifications of that history so that you can make some decisions. You know, things do happen differently over a period of time, but you know, really, I’ve seen history kind of repeat itself fairly frequently within the stock market for the most part. So, another great day, look forward to seeing what’s going to happen tomorrow. It will be really fantastic to see another carry through. We’ve got over 100 companies in the S&P 500 reporting earnings this week. So Google’s kicked off a really nice one. So maybe we get some roll from that. So we’ll see what happens. Talk to you then. Thank you very much.