Run, America! Run!
Run, Forrest! Run! - Jenny Curran (Forrest Gump, 1994)
Here we stand again in 2023 as the S&P500 is above 4400. Oh boy! Who could have guessed? Well we did more than guess. Read The Fed's War . This is the whole point of a narrative it is to get you running in the direction they want you to run, a direction to nowhere. Yes! They! The fat wigs in Westminster, the cronies on Wall Street, The conservatives in Congress. Yes, they are all f***king conservatives, in fact we are all conservatives, we only want to hug a tree when we are depressed and feeling entitled.
Anyway, let's not start a generational war. I am here to tell you why like Forrest you are just running. I get it, interest rates are higher, Joe Biden is in office, there is a wall on the Mexican border and America is a little browner in politics and religion but that's still no reason for you to be shorting the S&P500. I mean, let's face it under every US president the S&P500 grew at least 12% by the end of their term. In fact Clinton achieved the highest growth followed by Roosevelt and then Obama. I am not even going to mention what those three have in common. Biden has already notched 11.2%, so hoping for a Truman, Hoover or Bush Jr. is not a good strategy. Instead, say no Jenny! I will not be running today.
We don't want to face the inevitable reality of AI with any degree of seriousness until it eventually puts us all in the ground as the legendary trader Jason Shapiro once said to me, "it's garbage in and garbage out". AI is being fed so much garbage and eventually that garbage will come out on all of us but guess what? AI will sing and dance for its creators and it will print Dollars as we pay for the garbage that makes us look cool. It's all about the Winners Club . So yes, GDP will get a boost as cooperate America and Europe cuts the worker slack and replaces a few humans with AI; what's lost in personal taxes will be replaced with more public sector borrowing but on paper it will say we have higher GDP and 90% of it will come from AI productivity enhancements but they will tell you AI is good for humanity but is it? Well, I say once again, no Jenny! I will not run.
So what am I going to do in the face of Jenny's onslaught? Well, I am going to go massively long the S&P500, I am going to go massively long China, I am going to go super long Taiwan, hell, even Mexico and I am going to plant my feet firmly in the sand and say, not this time Jenny, this man is not for running.
If you decide to keep running, then I say to all you good folks, Run, America! Run! I hope you get where you are going.