OOH …Here’s One Thing
by Jim Johnsen,
Managing Director, Johnsen, Fretty & Company
Peace of Mind
While it’s true that I am a carpet bagger, having grown up in post war Long Island, which at the time was really just a very watered down version of prewar Brooklyn, there is something about Boston that truly makes me feel like I am home. Its really hard to put my finger on what it is that makes Boston so special as its a multitude of subtle distinctions rolled into complex ball of wax. If you have spent sometime in Boston, I think you will relate immediately. If you have never been to Boston, you need to run, not walk there right now.
Johnsen, why are you talking about Boston? I was giving blood this past Friday (no I’m no Mother Teresa, nor am I trolling for an attaboy) and Boston was on the radio. Lying on the table looking at the ceiling (anyone else hate watching the blood leave the arm and enter the bag?) with nothing to distract me, it was the first time I REALLY listened to Boston in a long time. It sounded so damn good. And then my mind wandered to what it must have been like to have had seen them in Danvers in the early 70’s before they became a national treasure. (By the way, you should read their history. Quite an entrepreneurial and unconventional route to stardom for an MIT graduate! http://www.gonnahitcharide.com/history )
Anyway, Boston’s Peace of Mind got me thinking of the decent business people I’ve met, the good friends I’ve made and the city of Boston’s incredibly unique and strong character. I mean yes it’s very very American. But it’s also smack in the middle New England: hard scrabble but community. But it’s much more than New England. If you want New England go to Portland Maine. If you want intensity like New York (as us New Yorkers know everyday is jump ball) but with hard-headed brotherhood, you go to Boston. It’s very hard to pin down with words, but when that Boston accent rolls and the direct honesty hits you between the eyes, you know you are in Boston.
In any event, after struggling for the right words to capture a very distinct slice of America, I stumbled on this on the web. Its a good laugh if you’ve got 4 minutes.
Okay Johnsen, lets get to the point. Here’s the thing. More Than A Feeling nails it for me this week. Not the song (well that nails it too) but rather the statement. For the last 45 days I’ve been wondering how the stock market could be SO decoupled from the global economy. I’ve had a feeling that something was amiss but have had no explanation for it. Then over a beer, a friend of mine, who manages more institutional money for a living than we can count, hit me over the head with it. He said it’s simple; “its a “Wall of Money””. Embarrassingly I had not heard that term before. It turns out that a whole bunch of the $3 trillion that the FED printed and then pushed into the economy, didn’t go to Chick-Fil-A or Domino’s Pizza but rather got cycled into the stock market. In the simple law of supply and demand, there is more demand for yield (or investment return) than supply, so the money managers have bid up stock prices in things like the “FANGs (Facebook, Amazon, Netflix, Google) in the hail Mary hope that over time stocks will deliver some kind of return on their money beyond zero. If you believe what my friend is saying, the stock market is indeed decoupled from the economy. The sixty four thousand dollar question is how long can it stay that way? Like the unknown of how long corona virus is going to hang around, it appears as if no one knows the answer to that question. According to my friend, only the “wickedest” (pun intended) money managers are willing to bet against it right now, and this group is comprised of…almost no one. Long short, with the stock market doing the huka dance, the impending Presidential election and the lack of visibility around the virus, its going to be an interesting 18 months! We are all going to need a peace of mind.
Now if you’re feelin’ kinda low ’bout the dues you’ve been paying
Future’s coming much too slow
And you want to run but somehow you just keep on stayin’
Can’t decide on which way to go
Yeah, yeah, yeah
I understand about indecision
But I don’t care if I get behind
People livin’ in competition
All I want is to have my peace of mind, yeah, whoa
Now you’re climbin’ to the top of the company ladder
Hope it doesn’t take too long
Can’tcha you see there’ll come a day when it won’t matter?
Come a day when you’ll be gone, whoa
Boston – Peace of Mind, 1976
Securities transacted through StillPoint Capital Member firm FINRA/SiPC
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