March Charts of Interest: The War's Impact on the Economy and Stocks

DENNIS from CA posted 4 months ago:

'I paid $3.74 per gallon of gas". I really feel bad for you, as I see prices nearing or above $5.50 for regular unleaded around here.

Charles Rotblut from Illinois posted 4 months ago:

Dennis,

You have my empathy. Illinois is often one of the more expensive states, but I do realize California gasoline prices are absurd.

-Charles

Barry from TX posted 4 months ago:

#1 Filling up your car is the obvious impact of ANY (and all prior) war. #2 Try this on as a “look on the sunny side” take on our current inflationary situation. Although XOM and CVX, and other NRG IND stocks/ETFs are soaring, every investor should take time to note HOW the cost of transporting goods from producers to retailers and the cost of delivering them to homes is silently picking our COLA pockets. AMZN and WMT stocks are temporarily swooning as higher costs (up 47% per Dennis) impact consumer prices for gas at the pump (cars) and LNG (home heating). #3 Both of these “trillion dollar club” companies meet Buffett’s, Morningstar’s, and AAII’s common/shared “4M” criteria for being a “good company” – (1) they have profitable business Models (with predictable earnings and large, dependable cash flows), (2) “wide” Moats (sustainable economic competitive advantages), (3) “good” Management teams (experienced leaders in hard-wired cultures), and (4) a Margin of Safety (trading at a significant discount to its estimated fair value). #4 I add a 5th M. Both WMT and AMZN are positioned to exploit current AI multimodal foundation and reasoning Models and to develop and deploy agentic AI. #5 So, while you’re crying over the price of gas, you may want to look into these two opportunities as a way to afford today’s gas prices.

Barry from TX posted 4 months ago:

Charles, similar tables keep showing up everywhere. #1 Some convert the history of each asset class to correlation statistics (usually using simple percentages). #2 Most of the data series are overlaid with a color-coded "heat map" to show increasing (hotter colors) correlation among asset classes. #3 Some add observations/opinions that the charts show an increasing concentration of asset classes since the March 2022 "bear market" ended. #4 Most do not mention that the TIMING of these trends coincide with (A) the FOMC decision to begin lowering the FFR to "cool down" the 7% inflation rate at that time ("blamed" on Covid, although $7B in fiscal policy and (B) subsequent M2 infusions through USTs sold and stored on the US Treasury Balance Sheet contributed too) that have fueled the current 3-year long Bull Market. #5 What these "heat" charts do NOT show is that the Core rate of inflation (a FOMC favorite statistic) has "cooled" down 50% to around 3.5% YOY. #6 Most comments I see posted after seeing these data trends tell me that well-over 80% of investors look for the simplest explanation their brains can construct (Kahneman's System 1 at work) to JUSTIFY their desire to continue to invest heavily in risky assets -- "the usual suspects" are gold, bitcoin, commodities and now Ex-US stocks -- to "diversify." #7 Remember, every time YOU take on more RISK (to diversify?), someone else SELLS you their RISK and pockets your CASH as their profit. #8 As Sergeant Phil Esterhaus (Michael Conrad) on Hill Street Blues said, "Let's be careful out there." #9 In the "Monk" theme song, songwriter Randy Neuman reminded us that "It's a jungle out there" and added, "I could be wrong. But I don't think so." The market "jungle" IS teaming with predators these days.