#Economy & #Stocks Focus Has Turned to Concern

E&S Review

Much of today’s economic data, time series officially collected and produced, are highly unreliable. Statisticians employ well-documented techniques such as geometric smoothing, seasonal adjustments, substitution, double counting, and hedonic to adjust economic outcomes as far back as the 1980s. Politicians and central bankers use these techniques for political gain.

Data massaged by statistical techniques (tricks) are revised when nobody is looking, or Administrations or public policies change.

Subscriber Comments

The Economy & Stocks (E&S) Report, a series of videos, provide depth to today’s review. The E&S Report should be mandatory for all subscribers.  2023 will be a difficult and volatile year. It leads an important transition to 2024. Investors need to be prepared for 2024.

The majority never gets timing right.  They’re bearish when they should be bullish, and vice versa.  They also have a long history of becoming bag holders.

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” — Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds.

Mackay reminds us that the majority, the collective conscious of all investors, to be swayed by the emotions and behaviors of the crowd. The majority, a group that struggles with timing, find themselves being bearish when they should have been bullish, and vice versa. This traps them as bag holders when trends against the majority’s expectations. The stock market often defies expectations, rising when everyone expects a recession, and vice versa. This is why we follow the invisible hand rather than opinions.

Focus Has Turned to Concern

Stock bulls are worried (see Chart 1). We go through the steps of understanding what the invisible hand is telling us in the Matrix. A short read rather than the more detailed discussion of the Economy & Stocks Report.

Chart 1: Dow Industrials Daily

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The Matrix provides market-driven trend, cycles, and intermarket analysis.