Now I can't stress enough, over and over again, you keep hearing me talk about the 2015-2016 analogy. I've been using that one because we saw a lot of the same tech stocks lose a third to 40% of their value as rates soared, the Fed raised the Fed funds rate, and then business faltered, all in that six-week period.
Now, we don't have the Fed to fight right now. Jay Powell will be talking while we're doing this, and we know that he is in favor of lower rates because he wants to generate more jobs.
And we have even more money coming at the economy because of the pandemic. And that's the $1,400 that Biden is fighting for.
But money managers regard these things as niceties. When things run hot, whether it be copper above $4 or lumber at Home Depot (HD) - Get Report double a year ago, or wages at Wendy's (WEN) - Get Report which impacted their earnings, you're going to see selling in companies that are highly valued.
That's what happens. If we didn't, then everyone would own them, and fortunes would be made if we just stuck with them. And you know how hard it is to do that in an inflationary period where interest rates go higher.
We have trimmed many of them not to get rid of them but to buy more of them when the crescendo -- and that's a technical term -- crescendo I expect occurs. And that's when you get that whoosh selling off pretty much every tech stock over a couple of days that breeds both an intraday reversal and a turnback down in rates.
And believe me, there are people -- and I've been debating this morning, all morning: Did we get the crescendo today? I mean, remember the despair we had at the opening? I mean, was that the crescendo?
Going back and forth with Helene Meisler, my friend for 30 years on Real Money. Is this it? It certainly could be it with rates staying stable, even though oil is up over $3, which is why we were tempted more to buy tech this morning than to sell it. As you know, we've been sellers.
We will be ready when we have the crescendo or if this is a crescendo because, you know, we raised the cash to do so. You can rely on us to spot that crescendo. And I have been a crescendo spotter for decades. And this time will be no different.
Crescendo: Once again, you have the market just whoosh down like it did this morning. But I want to see -- I want to see if interest rates stay steady before I declare this the whoosh that allows you to buy.