EDITOR'S NOTE
As if the pandemic, riots, hurricanes, and derechos weren't enough already this year, now the West is horrifyingly ablaze. Oregon has never seen wildfires this bad. California has lost a record 2.5 million acres to the fires so far in 2020.
So let's talk about something a little more hopeful. Namely, could 2021 have some majorly positive surprises in store?
I mentioned this in writing about how on earth Apple is now a $2 trillion company: "If anything, Apple has been hampered by the coronavirus. Bernstein's Toni Saconagghi estimates its iPhone revenues will be 10% lower this year than they would have been otherwise between the pandemic hitting demand and the delay of its iPhone 12 launching this fall." (Speaking of which, Apple just set next Tuesday, September 15th, for that likely event.)
But that means pent-up demand for 2021 could power major profit and earnings growth--one reason Apple shares have done so well lately.
To Morgan Housel, you could extend this argument more broadly for the U.S. economy. "One thing that I think is overlooked or underappreciated today," he said on our show this week, "are the odds that 2021 could actually be one of the best years for the economy in history, which sounds ridiculous given what we are dealing with right now."
(For more background on Housel, check out Jason Zweig's great write-up of his new book. And I highly recommend watching our whole interview.)
The key to this scenario--which even Housel cautions "is not his baseline" right now--is the government's massive monetary support combined with the aforementioned pent-up demand. Sure, some people will be scarred by the pandemic and be unable to dine out or travel again for years. Many, many others, though, are desperate to "get out" and experience some semblance of normalcy, especially if the coronavirus keeps receding.
On that front, a viewer this morning asked, "What if we don't need a vaccine? What if the virus goes away [on its own]?" We can only hope. But that's my point: maybe people are starting to feel a little hopeful again. Obviously, if the numbers shoot back up, it's back to our bunkers. In the meantime, though, we can try to venture "out" as safely as possible, to keep the rest of our shops and restaurants from shuttering.
John Spallanzani of Miller Value Partners is the first person I heard venture the notion that we could be setting up for a redux of the "Roaring Twenties." Then it was Michael Darda flagging a V-shaped economic recovery. Now the whole stock market seems to be on board with the idea, even if most of the public would still find it absurd.
And yes, a lot of it--though not all of it--has been concentrated in Big Tech. But did you notice Caterpillar yesterday breaking out to a two-year high? Maybe we're all ready to come out of our cocoons, and 2021 will be the Year of the Butterfly.
See you at 1 p.m...
Kelly
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Kamis, 10 September 2020
The Roaring Twenties
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