Making Hay Monday – November 12th, 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.
A special edition: Chart-O-Rama!
Hello and happy Tuesday, MHM Readers:
As many of you might already have concluded, we took a publishing holiday this week in honor of Veterans Day. Thanks to you all for the patience and, of course, for your continued and much-needed support of this newsletter. Our goal is to keep things pretty steady and routine throughout the holiday season, with the exceptions of the Thanksgiving and Christmas weeks themselves. On that topic, let us know if you’d like to gather ‘round the Haymaker fire for an end-of-year chat on 2025 anticipations (and 2024 aggravations).
There’ll be plenty of time to get into Q/A practice once our new AHA!webinar series is in full swing. The first of those is kicking off this week, so be sure to join in and bring your sharpest questions for the elder Haymaker!
The Haymaker Team
Evergreen Compatibility Survey
“A swelling interest in investment performance has created an increasingly short-term oriented and (in my opinion) more speculative market.” -Warren Buffett writing to the investors in his investment partnership in 1969; based on his current cash hoard of over $300 billion, he obviously has similar feelings today
“Clearly Mr Trump’s election could lead to a seismic shift in a number of areas. His signature policies – the ones I would rate as most likely to be implemented – include tax cuts, tariff increases, deregulation, larger deficits, and slower working-age population growth. This is a mixed bag for investors. But markets are now betting on an outcome that has the good stuff without the bad stuff.” -Gerard Minack, author of the insight-rich Downunder Daily
Chart-O-Rama
In this week’s Making Hay Almost Monday, we are doing a reprise of our stock chart-focused edition. As a result, it will not include the usual Champions, Contenders, or Down For the Count sections.
The last stock chart issue was on July 22nd. At the time, we highlighted nine stocks, (we’re embarrassed to say it was supposed to be 10 back then) making clear they were not buy recommendations. The screening test for these names, out of several hundred charts we reviewed at the time, was based on those that were making new three-year highs. In some cases, they were breakouts above even a longer trading range. Better yet, a few had made all-time highs.
Regular Haymaker readers are aware of the heavy emphasis we place on these developments. In our experience, the longer the trading range has been in place the more significant, and likely profitable, is that breakout.
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What happens after these events is, unsurprisingly, varied. Often, they surge 20%, or more, quite quickly. Sometimes, they correct hard before surging again. Occasionally, there are false breakouts where a marginal new high is made and then the stock in question breaks down in a material way. Fortunately, those are rare. To avoid those fake-outs, it’s helpful to also consider fundamentals such as valuations, as well as preferring situations where earnings are often also making new highs.
Before providing a few new names you may want to put on your watch list, let’s take a quick look at how those highlights from back in July have performed. Because two of them are part of the famous Magnificent Seven, this might be of particular interest in terms of comparing them to the less illustrious stocks shown below.
(Note: To expand any charts, simply click on them directly.)
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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.
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