Inflation Isn't Transitory but Bad Times Are

You owe it to yourself to prepare for good times.

Early-spring weather in Southern California is wonderful.

Well, to be honest, anytime weather in Southern California is wonderful, but our current weather is particularly nice, and it was a great excuse for a couple of dozen folks to meet al fresco this week for the StockTwits OC Meetup.

It’s been a long-time since I’ve attended a live trader/investor event, and it was really fun getting back out there and meeting folks IRL that I’ve only known online.

At the apex of the event, I stood on a chair and surveyed a mass of humanity, not just our group, but also the hundreds of others who were eating, drinking, talking, and laughing throughout the mall complex.

If I didn’t know better, I would have thought it was 2019.

Last weekend, I took the family to Walt’s Wharf in Seal Beach, a favorite restaurant of ours that we’ve patronized going on three decades now.

During the depths of Covid, when everything was shut down, they announced on their Facebook page that they were closing their doors forever.

Nobody wanted to see a family business that had been serving the community since 1970 go under, so locals began bombarding their page, both with offers of encouragement and financial support in an effort to get them to reconsider.

They did, but it was tough making a go of it.

You don’t need me to recap all the details as you lived through it as we all did, but new operating rules, reduced hours, and a 25% capacity cap – perhaps in perpetuity – put the odds of a happy ending to this story somewhere between slim and none.

Yet there we were on Saturday night with the place busting at the seams and a line around the corner. Better yet, there wasn’t a mask in sight, and once again, if I didn’t know better, I would have thought it was 2019.

There’s not enough space on this digital page to list all the things we were never going to see again according to the Covid perma-bears circa March 2020.

Buffets and self-serve soda machines were gone. Nobody would ever open a restaurant again. The kiss, the hug, and the handshake were to be banished forever. And worst of all, free samples at Costco would be something our kids would only read about in history books – while masked and gloved in their individual, hermetically sealed and socially distanced learning pods.

The perma-bears of 2020 were equally as negative on the stock market, basically arguing that we wouldn’t see the highs for a generation and that a complete breakdown of the world’s financial system was a distinct possibility.

In both cases, commons sense, perspective, oh, and a near-exact historical analog that concluded 100 years previous, argued otherwise.

As early as April of 2020 – as I wrote at the time - you already had a sense that the bears had overstayed their welcome in the market. It took a little longer for society to figure it out.

We’re dealing with a lot of bad stuff right now.

Inflation, rising interest rates, soaring gas prices, the war in Ukraine, and so on.

Yet the market has had a pretty decent run over the past two weeks, and for the first time in a long time, you could almost throw a dart and make money.

Does the market know something we don’t? Too early to tell, but something worth paying attention to, because eventually, just like disco, this too shall pass.

Even if you don’t believe that good times will return, at least be open to the possibility.

Bad times suck because bad things happen during bad times. Sometimes really bad things.

That’s why they’re called “bad” times.

But bad times never last.

Unless you want them to.