Investors looking for a definitive picture of the economy and investing backdrop are not finding one. Some companies are doing well while others are struggling. Those that sell into international markets, particularly China, may be facing challenges. Clearly, the domestic market still appears quite strong, but even here there continues to be pockets of challenges. Airlines are dealing with the 737 Max grounding, some retailers are facing major preference shifts, capital goods suppliers may struggle with the uncertainty of the tariff war, and so it goes.
However, it’s a mistake to call this environment tough. Many companies are also posting growth in not only profits but sales. It is still early, but fears of a profit recession look to be misplaced. Fears are exaggerated. Selection, for investors, always important, is even more so now. Don’t fall for the simplicity of an overarching investment view. The real world is rarely black or white, but usually shades of gray. The Bull remains optimistic for increasing investment returns. Stay steady, my friends.
The Lonely Bull