Report Card Season!

We are in the middle of the time when public companies report their results for the fourth quarter and the recent year. At the beginning of this week, 45 percent of the companies in the S&P 500 have reported. Seventy-eight percent of these have beaten their expectations. Some have done so emphatically, indicating accelerating growth.

The Bull and his partners are also noticing how many companies are doing targeted layoffs. These are not because business is bad but because the firms want to drive efficiencies. In some cases, it is to invest in new technologies that will help them drive even more productivity and profitability. Artificial intelligence is one new area that seems to be offering great promise.

So, companies are reporting excellent results, employment is high, growth is good, and stock prices are rising! That is a lot to like. Ignore the noise from politics, the macro environment, and most other extraneous events. These may affect markets in the near-term, but growth and earnings are what really count. That is why throughout the twentieth century, despite two world wars, smaller wars, the Cold War, a presidential assassination, civil unrest, and many other major events, the stock market rose an average of over 10 percent per year.  Growth and earnings are key; never forget it and stay steady my friends.

The Lonely Bull