Market Moment

By Randy Williams Gurian on June 16, 2023

Randy’s Market Moment – June 16, 2023

Market Euphoria and The Incredible Levitation Trick

I am always amazed how many people jump on the bandwagon when the market rallies. It is similar to being late to the party: even though the event is well underway, and you probably have missed some of the best parts, you still have a good time. There are other folks who figure they are so late already, they’ll just not attend at all. Those are the ones Mr. Market loves. But the people who show up to the party early learn about all kinds of stuff as they discuss topics with their friends. These early partygoers are favored by the bull markets. They’re the ones who make the most money—if they are right. If they are wrong, they can be left holding the bag, and it’s not filled with potato chips this week. Consulting with your adviser(s) about what to invest in is wise at this point.

Assessing market euphoria is part of my job. I recall going to an investors’ conference in New York City in the mid-1990s and jumping into a cab. The cabbie asked me what I thought about an internet stock that recently went public, saying he was already up $5,000. I thought at the time this conversation was nuts, as cab drivers rarely asks me questions, especially about stocks. I knew then the market was ahead of itself, and the euphoria had gone too far. Too many people had joined the party.

Today the party looks different to me. Yes, it has gotten off to a wild start, but perhaps it is valid. Artificial intelligence (AI) is going to change how we work and how we communicate. It will also likely replace jobs now being done by humans. This should ultimately reduce costs and improve margins, both of which are good for earnings and stock prices, if not great for the people losing their jobs. The incredible levitation trick may be a little ahead of itself, as many stocks mentioned as key players in the new AI world have moved up fast. My advice: stick with the winners and don’t venture too far off the path when you join the party, because no one rings a bell when “happy hour” on the stock market is over. Ultimately, Mr. Market is in the background trying to convince you the party is already over, but I have a secret that I’m not telling him. This party feels different, and it may last much longer and be much bigger than most expect.

The M’s are about two or three proven hitters short, and I don’t understand it. They could have spent money during the offseason to improve their club, but instead we “get” to watch very boring baseball, where our pitchers keep the games close, and our offense barely scratches out any runs. And yes, I did watch the series this week against the Marlins, and I was mostly stunned. The “fish,” as they are called, were one of the hottest teams around till they came up against Seattle. Odd, but good. At this point, though, I am concerned we will use up all this great pitching before we put a quality lineup on the field that can hit the ball consistently. I draw your attention to the Texas Rangers. They added Marcus Semien and Corey Seager to their team, and since then, they are scoring more runs than almost any team in baseball.

When are the Mariners going to be fun to watch again? Even this diehard fan is starting to lose interest. (I do hope you were sitting down for that.) My excitement for the team for the rest of 2023 is to see how our young pitching develops and hope that Jerry Dipoto gets the memo for next year to add at least two guys who can rake (hit the ball consistently).

Sans exclamation point or question mark today, go Mariners.

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