Making Hay Monday – December 9th, 2024
Making Hay Monday
High-level macro-market insights, actionable economic forecasts, and plenty of friendly candor to give you a fighting chance in the day’s financial fray.
Mega Trading Alert Edition (By popular demand)
Special message: This is another change-up edition of Making Hay Monday (MHM). As you will soon see, we are focusing, as promised, on stocks that have been slammed this year and, accordingly, are likely under tax-loss-selling pressure. Consequently, we are skipping our usual Charts of the Week and Power Punchers, Promising Picks, and Down-&-Out Sections. However, we have included a link to a list of those for our paying subscribers at the end of this issue.
“Oh, East is East, and West is West, and never the twain shall meet,
Till Earth and Sky stand presently at God’s great Judgment Seat.” -Rudyard Kipling, The Ballad of East and West
Momentum vs Valuation: Where the Twain Ain’t Meeting
Mark Twain once famously quipped, “October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.”
In the fullness of time, his wise words were actualized to a degree he probably couldn’t have envisioned.The first month he listed has indeed turned out to be a particularly dangerous month in which to own, much less speculate, in stocks. Over the past century, Octobers have contained some of the worst panics, crashes and sudden corrections markets have endured.
Even this year, October was a rare down month, albeit modestly, in an otherwise rip-roaring year, at least for U.S. stocks. This has created that unusual situation where the S&P 500 and the NASDAQ have experienced two consecutive 20% plus return years, as this newsletter recently pointed out. Yet, as Evergreen’s co-CIO, Jeff Dicks, articulated on a recent podcast with David Lin and the geriatric Haymaker, history isn’t encouraging for what happens next. (For the 99% or so of you who missed that, here’s a link to that podcast.)
Ironically, the point of this Making Hay Monday (MHM) is to provide you with a Holiday Season shopping list of stocks you may want to investigate. We’ll soon get to that, but first it’s important to emphasize the peculiarly dangerous aspects of the current overall market environment.
Serendipitously, for the timing of this MHM, the Wall Street Journal ran an article on the front page of its Exchange section this Saturday with this extremely apt title:
WSJ
That neatly sums up what I’ve been hearing with increasing frequency on a slew of recent podcasts from some of the brightest minds in the financial game. (We’ve included a link to a prime example of that from my pal Adam Taggart at the end of this MHM.) The recurring message is that a 50% type meltdown is coming but not quite yet. In fact, thanks to abundant liquidity and relentless momentum, the odds favor further gains. This upbeat take is usually followed by the caveat that once the indicators of the pundit in question start flashing red, it will be time to head for the hills — pronto, if not sooner.
Evergreen Compatibility Survey
It’s that aspect that has me worried. Even for professional investors and strategists whose systems are able to provide at least some advance warning, exiting in time is likely to be challenging. For the typical retail investor, it’s probably a classic case of “mission: impossible”…
Subscribe to Haymaker to unlock the rest.
Become a paying subscriber of Haymaker to get access to this post and other subscriber-only content.
A subscription gets you:
 | Subscriber-only posts and full archive |
| Post comments and join the community |
IMPORTANT DISCLOSURES
This material has been distributed solely for informational and educational purposes only and is not a solicitation or an offer to buy any security or to participate in any trading strategy. All material presented is compiled from sources believed to be reliable, but accuracy, adequacy, or completeness cannot be guaranteed, and David Hay makes no representation as to its accuracy, adequacy, or completeness.
The information herein is based on David Hay’s beliefs, as well as certain assumptions regarding future events based on information available to David Hay on a formal and informal basis as of the date of this publication. The material may include projections or other forward-looking statements regarding future events, targets or expectations. Past performance is no guarantee of future results. There is no guarantee that any opinions, forecasts, projections, risk assumptions, or commentary discussed herein will be realized or that an investment strategy will be successful. Actual experience may not reflect all of these opinions, forecasts, projections, risk assumptions, or commentary.
David Hay shall have no responsibility for: (i) determining that any opinion, forecast, projection, risk assumption, or commentary discussed herein is suitable for any particular reader; (ii) monitoring whether any opinion, forecast, projection, risk assumption, or commentary discussed herein continues to be suitable for any reader; or (iii) tailoring any opinion, forecast, projection, risk assumption, or commentary discussed herein to any particular reader’s investment objectives, guidelines, or restrictions. Receipt of this material does not, by itself, imply that David Hay has an advisory agreement, oral or otherwise, with any reader.
David Hay serves on the Investment Committee in his capacity as Co-Chief Investment Officer of Evergreen Gavekal (“Evergreen”), registered with the Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940. The registration of Evergreen in no way implies a certain level of skill or expertise or that the SEC has endorsed the firm or David Hay. Investment decisions for Evergreen clients are made by the Evergreen Investment Committee. Please note that while David Hay co-manages the investment program on behalf of Evergreen clients, this publication is not affiliated with Evergreen and do not necessarily reflect the views of the Investment Committee. The information herein reflects the personal views of David Hay as a seasoned investor in the financial markets and any recommendations noted may be materially different than the investment strategies that Evergreen manages on behalf of, or recommends to, its clients.
Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this material, will be profitable, equal any corresponding indicated performance level(s), or be suitable for your portfolio. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Investors should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.
20241209
