September 3, 2021
By Steve Blumenthal

“Two waves in the ocean are talking to each other.
The front wave tells the second that it’s frightened because
it is about to crash into the shore and cease to exist.
But the second wave shows no fear. It explains to the first:
“You are frightened because you think you are a wave;
I am not frightened because I know I am part of the ocean.”

― Daniel Gottlieb,
Letters to Sam: A Grandfather’s Lessons on Love, Loss, and the Gifts of Life

A quick post today. Next week, we’ll take a deep dive into the latest valuations and what the data is telling us about coming three-, five-, seven- and 10-year returns for the broad indices. Additionally, we’ll look at the accelerating geopolitical risks with China and what the poorly managed exit from Afghanistan means for Taiwan, South Korea, and parts of Europe. Sandpiles indeed (a reference to last week’s OMR).

To that end, today I share with you a link to an excellent article from the Telegraph’s Ambrose Evans-Pritchard. Click here or the image below to read the article.

Click on the image above to the read the article.

As we enter the challenging months of September and October, complacency abounds. David Rosenberg noted in his morning note, “Only ten other times since 1963 has the S&P 500 gone more than 200 days without so much as a 5% dip, and [that] speaks to the momentum, liquidity, and speculative aspects to the market.” To quote my friend the great Art Cashin, “Stick with the drill–stay wary, alert and very, very nimble.”

Grab a coffee and find your favorite chair. No material changes in Trade Signals section and I’ll conclude today’s OMR with a poem. Yes, I know… a poem. I hope you like it as much as I enjoyed my Susan reading it to me.

• Trade Signals – August 2021 Market Summary
• Personal Section – See Paris First
  

Trade Signals – August 2021 Market Summary

September 1, 2021

Posted each Wednesday, Trade Signals looks at several of my favorite equity market, investor sentiment, fixed income, economic, recession, and gold market indicators.

For new readers – Trade Signals is organized into three sections:

• Market Commentary
• Trade Signals — Dashboard of Indicators
• Charts with Explanations

Market Commentary

Notable this week:

Green across the board for equities and fixed income. Keep risk management top of mind.

Click HERE to go to the balance of Wednesday’s Trade Signals post.

Not a recommendation for you to buy or sell any security. For information purposes only. Please talk with your advisor about needs, goals, time horizon and risk tolerances.

Personal Note – See Paris First

Bookmarked in Susan’s copy of the book Letters to Sam is a poem entitled, “Fearing Paris” by Marsha Truman Cooper. If you are a new reader, my wife, Susan, coaches a boys’ high school soccer team. Susan read me the poem, one she had shared several hours earlier at her preseason parents’ meeting. I think it is great and thought I’d share it with you.

FEARING PARIS

Suppose that what you fear
could be trapped
and held in Paris.

Then you would have
the courage to go
everywhere in the world.

All the directions of the compass
open to you,
except the degrees east or west
of true north
that lead to Paris.

Still, you wouldn’t dare
put your toes
smack dab on the city limit line.

You’re not really willing
to stand on a mountainside,
miles away,
and watch the Paris lights
come up at night.

Just to be on the safe side,
you decide to stay completely
out of France.

But then danger
seems too close
even to those boundaries,
and you feel
the timid part of you
covering the whole globe again.

You need the kind of friend
who learns your secret and says,

“See Paris first.”

by Marsha Truman Cooper

See Paris first…

Successful sports teams build a family culture. You can see it when players huddle together and shout, “On three, one, two, three, FAMILY.” You can see it in how they treat each other.

I remember during my first week of soccer preseason in 1979, a Penn State offensive line coach stood next to the practice field. Rain had moved us to the football team’s turf and their practiced followed ours. As I walked off the field, the coach reached out his hand and introduced himself. “Freshman?” he asked.

“Yes,” I answered.

“Let me be the first to welcome you to the Penn State family,” he said. I’ll never forget that. Nervous and afraid I might not make the team, his gesture made me feel better immediately–and as if I was already a part of something bigger than myself.

Susan’s ultimate message to the boys’ parents was that they were part of an important culture, bolstered by a team that would allow them to have fears, take risks, and fail. Regardless of what happened, the team would be there to help them get back up.

Today, teachers and coaches alike are seeing a growing challenge in which parents try to fix everything for their kids. Not all do, of course, but the trend is concerning.

A friend of Susan’s is the athletic director at an Ivy League school. The AD says the arriving students are overstressed, over-medicated, and unprepared to be on their own. Honestly, I know I have made many of my own mistakes when it comes to parenting, but the poem–and Susan’s message–are a good reminder of how important it is to let our kids experience life and all its ups and downs for themselves.

A coach reading a poem to her player’s parents–I loved that Susan took that risk. The short-term wins are on the scoreboard. But the long-term win is seeing Paris, and all the joy it brings throughout life. After she told me about her parent meeting, I asked if she would read me the poem. I loved it and asked her if it would be okay to share it with you.

Here’s a toast to tackling fears, and a second toast to the “kind friends” who give us great advice.

Wishing you a fun-filled Labor Day holiday weekend! When you find a free minute, reach out to a good friend, a teacher you loved, and/or a coach you admired. Let them know you are thinking about them. It will lift you both.

All the best,

Steve

Stephen B. Blumenthal
Executive Chairman & CIO
CMG Capital Management Group, Inc.

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