The Sunday Drive - 01/22/2023 Edition
👋🏻 Hello friends,
Let's take it easy and enjoy our leisurely Sunday Drive around the internet.
Vibin'
The Vibe of the Week has long been an inspiring and uplifting song for anyone who is facing challenges and difficulties. Written by Kenny Loggins for his father who was battling cancer at the time, it had a very positive effect and Kenny’s dad lived several more years.
For me this week’s Vibe represents optimism and excitement for the opportunities that lie ahead for New Lantern Advisors. Please enjoy 1979’s This Is It by Kenny Loggins.
💡 Quote of the Week
理念なき行動は凶器であり、行動なき理念は無価値である.
Translated: "Vision without action is a daydream. Action without vision is a nightmare." - An Old Japanese Proverb
📈 Charts of the Week
It appears that, coming into this year, investors are meaningfully under-allocated to US equities (1st chart) AND also that short interest is at levels not seen since the pandemic (2nd chart). As a result, I believe there is a good bit of pent up buying power for stocks. This could very well bode well for US equity market performance over the course of 2023.
Another driver of strong performance, in my view, will be how quickly the margins and earnings of the mega-tech companies will recover. Even after their very poor performance in 2022, these companies still represent a historically high proportion of the aggregate market capitalization of the U.S. equity market.
While many are focused on the recent layoff announcements by large tech companies, it’s important to remember that for quite some time, these companies hired aggressively, in a competitive way to avoid letting quality talent be hired by their competitors. So to the extent they over-hired and overpaid their staff to recruit and retain them, relief from those expenses via the aforementioned layoffs should drive a meaningful earnings recovery over the course of this year and next, and thus give a “post recession” feel to this year’s stock market performance.
Interesting Drive-By's
🤔 What Even Is a “Mild Recession”? - Excellent article by Kyla Scanlon.
Recession Scale ☝🏼
Response to Recession ☝🏼
Putting the two together ☝🏼
💡 Secretary Jobs in the Age of AI - The ‘secretary’ literally means ‘person entrusted with secrets,’ from the medieval Latin secretarius, the trusted officer who writes the letters and keeps the records. The secretarial role originally conceived was far more central than roles with the “assistant” title now standard. In the nineteenth century, the secretary was a prized role for young men: a diplomatic assistant, the overseer of correspondence, the superintendent of the files, and in many cases, an apprentice manager—well-positioned to learn at the elbow of the man in charge, someday to be the man in charge.
💸 Workers Want to Work, But It’s Still Not Enough - Remember when “jobs, jobs, jobs” was a political talking point? You don’t hear that so much now, maybe because most every voter who wants a job has one. The Labor Department’s broadest unemployment benchmark is at its lowest level since 1994.
Many employers grew their companies and careers in a time when the US had more workers than jobs openings. Math gave management the bargaining power for decades. Now it doesn’t.
🏠 A Boomer Sells the House He Raised a Family In - As a follow on to the Reflections segment I wrote in last week’s Sunday Drive, this is a humorously written, yet also bittersweet, story about another family who went through the same process that my family recently did.
If you have any cool articles or ideas that might be interesting for future Sunday Drive-by's, please send them along or tweet 'em at me.
I hope you have a relaxing weekend and a great week ahead. See you next Sunday...
Your faithful financial provocateur,
-Mike
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