Don't Let the Mainstream Media Kill Your Portfolio

Joel's note: The Altimetry offices are closed on Monday for Presidents' Day, so look for the next Altimetry Daily Authority on Tuesday, February 22.

Here in the DMV...

I'm not referring to the Department of Motor Vehicles. Last week, I was visiting several places in "The DMV," a term big musical artists often use to refer to Washington D.C., southern Maryland, and northern Virginia.

I've been in our nation's capital region at one of our offices, meeting with clients and business partners, and our friends at Stansberry Research.

I also met with one of my former students when I taught at the Marine Corps War College, who now works at the Pentagon.

Given recent market volatility, everyone I've talked to is asking what we see for the markets and the economy in 2022...

Recent and expected rate hikes, high inflation numbers, and the unpredictability of future spending bills are dominating mainstream financial media.

Turn on the TV or open your phone or PC, and it sounds like the economy could break at any minute.

But the daily blips of the market make for a bad guide.

It's best to examine historical patterns to understand the big picture of the U.S. economy.

Pattern recognition is paramount. By understanding the past patterns, we have a model for the present.

Bring in the context of hundreds of years of bull and bear markets, built into a framework that we call the Market Phase Cycle, and we can see a more reliable guide than the on-air talking heads.

It's what we discuss here every Monday in our Altimetry Daily Authority. Those patterns point one way... Despite all the bad press, the legs of this bull market, one of the greatest ever, appear very strong.

And yet, the financial media is making it seem like the next crash is right around the corner. It's too bad, but you almost can't blame them – they're paid more for emotional reactions.

Incentives dictate behavior... People do what they're paid to do, and the media is no different...

In the context of delivering useful financial guidance, the business models of mainstream media are broken.

Major networks and most news websites are paid in advertising and, therefore, by viewership. In the world of the 24-hour, nonstop news cycle, saying boring things, no matter how accurate, does not generate views.

Sensationalism sells. Advertising-driven businesses are paid to excite us. The media wants to raise fear, or better yet, to enrage us and push us to feel that we must constantly be plugged into the news with our phones, computers, and televisions.

The rolling scare tactics and pumps of excitement can often play to our worst fears...

The amygdala hijack is what sells the most screen time.

Providing accurate and insightful cognitive content and context... Well, that just doesn't keep people glued to their screens.

To be a great investor or great at virtually any discipline requires emotional intelligence.

Great investors consistently talk about how boring great investing is. They talk about how the market's daily volatility and news flow simply need to be ignored.

The great American economist and Nobel laureate Paul Samuelson once said...

Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.

Last week, I walked through one very typical investment office lobby. It had a giant television playing CNBC's chart of minute-by-minute changes in the S&P 500 Index. That kind of news is fairly useless and creates fear-driven decision-making.

Emotional intelligence combined with the right data and a long-term context like the Market Phase Cycle is far more important in investing. Intellectual horsepower needs a strong emotional foundation.

For example, in 2013, when we first recommended Meta Platforms (FB), investors thought we were boarding a sinking ship. It was only through the latter half of 2013 and into 2014 when we first started booking our massive gains.

And with that, I humbly wish you an unemotional and boring investing week, where you continue to pursue the right long-term strategy for your investment timetable.

Following the right "boring" strategy, seeing through the daily emotional waves, is the sure-fire way to wealth creation.

It's also a good time to buy high-quality stocks that have gone 'on sale' recently...

In a recent presentation, I identified 20 stocks trading at bargain prices that you can buy immediately.

If history is any indication, they won't stay down for much longer... and my favorite of the bunch could rise 20x from here.

Get the facts for yourself.

Love, joy, and peace,

Joel
February 18, 2022