1/ This is exactly what I struggle with the most in attempting to make sense of the current environment. Even if we accept the idea that stocks were “fairly valued” coming into this thing (debatable at very least), I struggle with the following.... https://twitter.com/hedgeyeddale/status/1280821003774500865
2/ Taxes.

Given all the money printing / additional debt creation over the past 6 months alone - along with the political landscape at the moment - we’d have to assume the path of least resistance going forward is higher taxes.

Don’t see how that grows earnings?
3/ Employment.

I think most would agree that employment levels are incredibly unlikely to immediately return to levels coming into the year. And while I understand less payroll helps the bottom lines, that also has to hurt overall demand / pricing power, no?
4/ Trade tensions (China).

It seems very likely that there will be a significant push to bring critical manufacturing “back home” at the very least. Worst case, increasing likelihood of “all out trade war”.

Not sure how either of those get us to ‘19 earnings and beyond?
5/ Buybacks.

While certainly a topic of debate as to their role, I don’t think anyone can ignore their existence in creating “earnings growth” over past decade. Not only likely they will be reduced going forward, but growing chance banned all together for political reasons.
6/ Inflation.

Sure, one could say that the earnings growth will come from inflation itself - but will they have the pricing power to do so given the economic backdrop? If input costs are rising but you can’t pass through to consumers, it ain’t creating earnings growth...
7/ The Fed.

Everyone wants to use liquidity as the main justification for everything these days. Ok, so what happens if (huge if) they start to unwind? Or even stop what already doing?

I’m still grappling with this regarding ‘08 policy, never mind the past 6 months....
8/ You will note I haven’t even mentioned the virus. I’ve always thought it best to “assume a vaccine was ready this afternoon”.

Even under that assumption, I have a hard time getting back to ‘19 earnings anytime soon - never mind growing from there....
9/ I’d truly appreciate feedback on anything listed above - most useful would be conflicting opinion. Don’t have the followers, so could use some help:
@HedgeyeDDale @DiMartinoBooth @ttmygh @profplum99 @DavidBCollum @Peter_Atwater @HowardMarksBook @hussmanjp @fleckcap
You can follow @RoundHillWealth.
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