Transcript:
Tom Vaughan:
Hello, everybody, welcome to Wednesday. The S&P 500 was up about .8%, today. All of the indexes were up. The Russell 2000 Small Cap Index was up 1.8%, today. Really good day actually. We’ve now made back all the money that we lost on Monday, and we’re starting to head back; I think towards another all time high. As I mentioned on Monday, sometimes you need to see that downturn: We didn’t have one for a while, and we ended up kind of really stretching, hitting all time highs over and over. And eventually, you know, we’re going to get some kind of downturn. The downturns have been less this year than what I’m used to: 3% to 5% downturns. Usually, when these types of things happen, you’re looking at 5% to 10%. That just shows you the power of what’s happening here.
Go back to the 23rd of March last year when the market hit its low point, during this pandemic. And from then until now, we’ve had an unbelievable market: One of the best ever. And yet, there’s still negative news articles coming out, day after day about how we’re going to have some kind of market crash all the way through, and it’s incredible. It kind of mystifies me, because when you look at the basics, lots of money on the sidelines, and nowhere else to go with that money. And every time the market falls, people keep coming in and buying the dip. And there’s still like four and a half trillion dollars sitting in money markets and savings right now. And it’s a big jump up over what usually is. So there’s a lot of money on the sidelines. And some of that might not come in the stock market, but it might go into the economy. And even sitting in the banking system that’s money is flooding into treasuries and all kinds of different places.
So I think there’s all kinds of reasons for this market to do well. I’m not surprised to see that we’re back after the Monday downturn. I’m a little surprised to how fast that happened, but heck, I’ll take it. And so, again, the basics are there, keep that in mind. Those basics will change at some point; we’ll talk about those when they change. They have not changed since March 23. Interest rates are still the same. The stimulus from the government is still coming in.
Things have not changed since March 23rd, and until they do, until rates start coming up, until stimulus programs stopped coming in, until we start to see a depletion of some of the capital assets that are available to come into the stock market, you should have some decent markets. Now, you’re still gonna have volatility; that’s the way it works. It is not a straight line. You can see all these little squiggly lines behind me here. I mean, really, the markets kind of go up and down, right?
But the overall trend, at least at the moment is definitely up, and I think it kind of continues to go up just because of what’s happening here, structurally, within the kind of the financial arena for what’s happening. Earnings are fantastic. There’s lots of cross currents that are happening that are causing all kinds of issues. But overall, if you look at the very basics, at the core issues, things are bad. So look forward to talking to you tomorrow, and I hope I hope we get a chance to see what’s gonna happen then. Thank you.