Stocks Break Out

Stocks and bonds are two of the three biggest assets in the world, and they know each other quite well.

There are so many different ways to categorize stocks that new ETFs are released weekly that can sort and group equity in ten ways to Sunday. 

And it seems the stronger the stock market gets, the madder people are getting. It’s like they are yelling at the stock market that it’s wrong—that a $70 trillion asset class is wrong again. 

After all, the Chicago PMI Index, set to be released at 8:45 a.m. on December 30th will set the market right. 

You can’t go higher says the cash-hoarder. Haven’t you seen the initial jobless claims (total, NSA)? The continuing jobless claims (regular state program)? The durable goods order index? The Chicago Fed national activity index? The gross domestic product revision data? The consumer confidence index? Existing home sales?

I mean c’mon stocks… get with the program and drop already. 

You can either study the map or you can study the territory… which reminds me of a Google employee I was talking to years ago when I lived in Silicon Valley. He was one of those employee #20 at Google sort of guys. Clearly intelligent, but obviously stuck on studying a map from the 1950s. Over and over again he would point to a piece of paper that had a mathematical calculation called the Efficient Frontier on it. 

Apparently this 1950’s formula told him everything he needed to know about investing today. He couldn’t see it (read: the territory). 

The growth of his money was living in the 1950’s even though he was earning millions thinking in the 21st century. And he wouldn’t budge. 

So as we move into 2021, my wish is for you to understand what it means when stocks break out. 

Let me show you in this week’s video.