The Sunday Drive - 05/12/2024 Edition [#110]

Musings and Meanderings of a Financial Provocateur

A Sunday Drive Around the Internet

👋🏼 Hello friends,

Greetings from Saratoga Springs, NY. For all the mothers who are reading this week’s edition, HAPPY MOTHER’S DAY!

Now, let’s enjoy a leisurely Sunday Drive around the Internet.

🎶 Vibin'

I used to have a little saying at the bottom of my corporate email signature that read, “Life is simply the pursuit of stories worth telling your grandchildren.” I don’t know where I came up with that, but it was always a reminder of the importance and power of storytelling even, or even maybe especially, in business.

One of my favorite musical storytellers has always been Lyle Lovett. So, this week I’m vibin’ to a live recording of his 1987 hit song, If I Had a Boat. I hope you enjoy it.

💭  Quote of the Week‌

“Stoic detachment combined with emotional awareness is the perfect combination for stocks. Feel the fear, but let reason decide.”
– Joel Tillinghast

📈  Chart of the Week

Source: J.P. Morgan

Much has been written and said in the recent past about the relative performance of the largest tech stocks, and how concentrated and top-heavy the equity markets have become.

Some forecasters even go so far as to evoke the memory of the early 2000s’ so-called Tech Wreck and the stock market declines - nearly 50% for the S&P 500 and nearly 80% for the tech heavy NASDAQ - at the end of the Dot-com Bubble.

I suggest that the Chart of the Week depicts just how different today’s market leadership is compared to the previously mentioned period in history. Unlike the biggest companies in the tech, telecom, and media space in the early 2000s, the companies whose stocks have performed the strongest in recent years have grown the fastest AND are also the most profitable versus the other sectors of the market. This was not the case during the dot-com era.

I recall a wise old saying from the early days of my investing career… “Earnings are an opinion, but cash flow is a fact.”

So in light of the profitability of the largest companies in the U.S., I am hard pressed to call today’s environment another stock market bubble.

Could we have a meaningful market correction, triggered by some exogenous event?

Of course. Absolutely, we could.

But unless the profitability of the largest companies in the market wanes and their growth slows meaningfully, we could very well continue to experience solid equity market performance for a good while longer.

🚙 Interesting Drive-By's

💡 Lucky vs. Repeatable - from Morgan Housel [Link]

🤔 7 Keys to Your Longevity Mindset - from Peter Diamandis [Link]

📈 The Simons Defense - from Dror Poleg [Link]

🤓 Separation - from Jason Fried [Link]

❤️ Charming Upstate NY Village Claims a Spot on the Top 10 Main Streets - from USA Today [Link]
Note: My wife’s hometown.

👋🏼 Parting Thought

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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 (X ‘em?) at me.

Please note that the content in The Sunday Drive is intended for informational purposes only, and is in no way intended to be financial, legal, tax, marital, or even cooking advice. Consult your own professionals as needed. The views expressed in The Sunday Drive are mine alone, and are not necessarily the views of Investment Research Partners or Cache Financials.

‌I hope you have a relaxing weekend and a great week ahead. See you next Sunday...

Your faithful financial provocateur,

-Mike‌

If you enjoy the Sunday Drive, I'd be honored if you'd share it with others.‌‌

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