Reasons for Not Selling Stocks This May

Rob from NC posted over 2 years ago:

Interesting but irrelevant. Those who chase short-term movements likely shoot themselves in the long-term foot.

Barry from TX posted over 2 years ago:

As I was writing one of my characteristically fully expository analyses of Charles' "Stay after May" premise, I received a copy of Warren Buffett's 2024 Letter to Shareholders. As Lily Tomlin's 60's Laugh-In character Emily Litella always said, "Never mind." North Carolina Rob's pithy 15-word comment summarizes Buffett’s thoughts over 42 pages. No surprises there. Rob is a Buffett fan with a shared long-term view. What is surprising in Buffett's 2024 remarks is his repeated focus on the limitations he foresees for future BRK growth due to the lack of targets of opportunity both in the US and abroad. BRK is a victim of its own success. Net assets of $561B and cash on hand of $168B are so large that the size of the denominator in any financial ratio reduces the percentages for future growth which places BRK at a disadvantage in comparisons. And the targets for added growth aren't there to deploy the cash. Buffett is still the Head Cheerleader for Capitalism. The US is still the best (maybe only in his opinion) place to invest. US markets are still the best (maybe only in his opinion) places to achieve future returns, but opportunities for buying or investing in other companies aren't there right now. What does this mean for BRK stock prices? That's a question Charles' timely column addresses. The BRK report may have dimmed the spotlights on M7 (now M3), AI generative or not, and semiconductors (US or not). I await Charles' trenchant analysis. PS, I cannot resist the temptation to post my "It's the economy, stupid" comments I interrupted to do this one.

Barry from TX posted over 2 years ago:

Charles, a very timely topic, however, the data points in these charts are not going to reduce my use of Night-time Tylenol. #1 Chart #1 needs to show the related EOY SPX performance so we can estimate the overall relationship between the number of up/down days versus the overall final performance it might generate. That is your underlying premise. That correlation would reinforce your optimistic advice to “Stay after May” … or not. #2 I am especially interested in the data for 2020 and 2022, the largest outliers in your small same. #3 I remember 2022 as a miserable year with large losses, but some data on correlations would help. (Yes, correlation is NOT causality, but it IS information on the probabilities of outcomes.) Chart #2 shows this data … for unspecified periods. #4 Chart #2 data is “historical” data, which normally goes from CRSP 1926-to-date data, but that does not provide the evidence we can use to compare to Chart #1 to estimate the possible relationships between Bull and Bear markets since these larger market cycles span multiple years (usually). #5 However, even with apples-to-apples data, the beginning and end dates of B/B market cycles are very important because they would provide evidence to support your premise. The old saw about “this is the exception that proves the rule” applies here because an exception is the only way to falsify (disprove) a hypothesis, i. e. prove that it is true. All the other data merely “proves” that you do not have to reject the hypothesis at some level of confidence. A p-value only measures the probability of obtaining the observed results so you can assume that the null hypothesis is true. #6 There are other issues with your light-heated attempt to encourage us to “stay the course.” I remember, in 1992, G.H.W. Bush said exactly that just before he LOST the 1992 election because, as James Carville screamed, “it’s economy stupid.”) That inflection point in history could be an omen –not necessarily proof – that in 2024, “It IS the economy, stupid” which you use as support for your hypothesis for us to “stay the course.” Please feel free to fill in the name of whomever you think should wear the “stupid” label in 2024; there are so many candidates. #7 Note: Some argue that the 1992 election was the starting point for the entrenched 50%-50% divisions we see on so many issues that began the plague of divided decision-making to this date; others place the origin it at the 2000 election. Either way, the same players are involved to this day. #8 In his 1987 Letter to Shareholders, the masterfully quotable Warren Buffett said: “If you've been in the [poker] game 30 minutes [or 5 months?] and you don't know who the patsy is, you're the patsy.” At the 5/4/2024 Woodstock for Capitalists, The Oracle indicated the was staying the course. Words to the wise from a very wise man.