My expectations were reduced to zero when I was 21. Everything since then has been a bonus.
-Stephen Hawking
Happiness is simply the space between reality and our expectations. When we learn to manage our expectations we can live a much more fulfilling life. When it comes to wealth, we tend to focus heavily on the making more money part. But what if we flipped it around and just wanted less stuff and expected less stuff? Wouldn't we be much happier? Because then everything we receive would become a blessing.
Welcome back to the Rambling Mind Newsletter. This is your Market Update.
Year-To-Date Market Returns
It's been a busy 3 months for the market. Lots of ups and downs. But that's the beauty of the stock market, it's a roller coaster. As long as you don't take off your safety harness and just enjoy the ride, you'll be alright.
This newsletter is 1,225 words a 6 min read
Tale of the Tape
Economy
📗Q1 in the Books
Despite all the end-of-world predictions. The market has remained somewhat resilient as you can see from the Year-To-Date Stock Returns.
👍🏾The Good: Tech Stocks returned to prominence. After a horrific 2022, tech stocks found their luster once again.
As companies announced layoffs and the word "efficiency" re-entered the vocabulary of tech companies. Investors rewarded them for being "prudent" in their business operations.
Plus with ChatGPT making AI more prominent, tech companies were able to capitalize on the excitement.
👎🏾The Bad: Last year it was all about financials and industrial companies. Well after two massive bank failures and a price cap on Russian oil. These two sectors are no longer as interesting to investors.
Credit Suisse and SVB took the world by storm over the last month and drained all returns from the financial industry this year
Short sellers were able to make a nice penny betting against banks. Bringing in over $2 Billion in profits in the first quarter.
🧓🏻The Jerome: Stocks were also aided by Jerome Powell saying the Fed has reached a good point in its fight against interest rates and will probably not increase rates anymore.
🎢Takeaway: This is why we do our best to ignore the day-to-day panics that get us riled up and emotional. We can enjoy the carnage for what it is, entertainment. Nothing that happens in a daily news headline should make you make massive changes to your portfolio.
As Professor Scott Galloway says, "Things are never as good or as bad as they seem in the moment — you're neither a genius nor a failure, but perspective takes time ."
Stats of the Week
Shout-out to all the unpaid stay-at-home parents. Y'all really keeping the economy going with all your free labor.
😵HUH?: According to insure.com's Mother's Day Index, caregivers provide services for families that would cost over $126,000/year.
🔢By The Numbers: In the US, one in five parents are caregivers.
Takeaway: Kiss the caregivers in your life. They saving us a bunch of money
I love the unadulterated violence that is John Wick. Last Friday, Chapter Four of the series was released. It brought in almost $74 million on its opening weekend. This was the best opening weekend for any movie in the franchise series.
🔢By The Numbers: Keanu Reaves, who plays John Wick, only said 380 words during the entire 3-hour movie. And most of those words were "Yeah".
👀Did You See It?: I saw the movie but only because T-Mobile with T-Mobile Tuesday gave me a $5 ticket.
If you saw it, let me know your thoughts and which John Wick Movie is your favorite.
📽Takeaway: Movies are generally back. I believed theaters were dead after the pandemic but looks like I was totally wrong. I used my personal experience of not liking going to theaters and extrapolated it to everyone else.
My Takeaway: Just because I experience life in a specific way, it does not mean everyone else experiences life in the same way. Question all your personal beliefs.
💻28%
The percentage of businesses that say employees work remotely some or all the time. This is a decline from 40% in 2021.
New Normal: Per Axios, a million fewer workers in America worked remotely last year according to a survey from the Bureau of Labor Statistics.
🔢By the Numbers: Every White Collar Industry saw a massive decline over the last year as more businesses told employees to report back to the office
IT went from 80% remote in 2021 to 67% today
Financials declined from 55% to 33%
Other professional services (sales etc.) declined from 66% to 49%
Takeaway: He who has the leverage WINS. The job market was tight for the last two years, then inflation went to the moon. The Fed increased interest rates in response causing businesses to re-evaluate their business model. Labor no longer has the upper hand, employers now do.
And We thought the hard part was getting into an Ivy League school. The average cost of the vaunted brownstone castles known as Universities for a bachelor’s degree has reached Med school levels of expensive.
🔢By the Number: About 50% of the Students receive financial aid which can drive the cost down to almost nothing for most students with a household income less than $125,000
Takeaway: Better get them kids studying, playing sports, doing something. Cause we need all the scholarship dollars we can get. Ivy Leagues set the pace for every other college. So expect your local state schools to be much more expensive as well.
Shoplifting is hitting the pockets of retailers everywhere. According to a survey from the Nation Retail Federation, shoplifting costs retailers $100 billion per year in security measures and stolen goods.
🔢By The Numbers: Since 2021, there has been a 27% increase in retail theft.
Takeaway: When people steal from a store, it hurts everyone in the area. Target and Walmart have shut down stores in certain towns and cities because of the cost of stolen merchandise (2 Walmarts just shut down in Atlanta because of this). This creates major food deserts for families. People may think I only hurt the large corporation. But hardly are things ever that simple.
Looking Ahead
Earnings
🌊A Wave Is Coming
The end of the Quarter means one thing: Earnings Season begins.
Time for panicked accountants, analysts, CFOs, and CEOs to load up on hella coffee and maybe other substances. As they prepare to report Profit or Loss numbers to their shareholder overlords aka You and I.
Economy
⚒Jobs Jobs Jobs
The JOLTS (Job Openings and Labor Turnover Survey) report will be released on Tuesday. I expect fewer job openings as companies are in the world of efficiency. But rather than layoffs, I believe companies will remove job openings from job boards and spread extra work to existing workers. Or companies will incentivize workers to retire while not replacing the position. Both of these are called shadow layoffs, where no one is fired but a company reduces its headcount.
On Friday, we get the nonfarm payrolls. There were 311,000 jobs added to the economy in February. This was above all expectations. Much less is expected for March, it is estimated for 240,000 to be added in March. I think it will be less.
Sports I Love
⚽Premier League is BACK
So is the bain of my existence 😭