Tag: tech

The United States economy is often compared to an aircraft carrier by experts. It’s massive, and is steered very slowly. Much like an aircraft carrier, it also has millions of moving parts. Some of those parts are human capital, while others are systems and machinery, much like American factories, supply chains, pipelines, and so forth. So when we’re talking about an entire economy in an article or blog post, it’s incredibly easy to leave out thousands of minute details that make the entire machine work.

However, you can take some solace in the fact that much of this giant economy is run by experts.

Yes I said it, but it’s likely not what you think.

Those “experts” are not at the top sometimes, but rather somewhere in the bottom of the ship, running the thousands of moving parts. American workers can extract minerals and resources from the ground, and grow food to feed the population. American engineers can turn those raw materials into useful everyday products, and factories can run the machinery to manufacture those products. American transportation experts and workers can move those goods to retailers, restaurants, grocers, and distribution hubs. American tech companies know how to provide the technology and support for these massive endeavors, and so on.

So, regardless of the Fed moves that are mucking things up, human capital knows how to make adjustments and decisions on the fly, in order to position themselves and their tiny individual sections of the economy for success. We saw this happen all through the pandemic, when millions of families and small businesses made tough decisions everyday in order to survive. Now, with the pandemic at least partially behind us, we must commit ourselves to the hard work of making this giant ship move out of the dire straits we’ve encountered along the way.

I’m kicking myself for not posting this yesterday, like I wanted to. Today, with the Dow down around 800 points and NASDAQ down around 600, I may seem like I’m being captain obvious.

However, with the NASDAQ only down 3% and the NASDAQ only down 4.5% off of record highs, I believe that gravity will not let up so easily.

Sure, some Robinhood investors may see this as a chance to catch some stocks on the cheap, but we’re talking fundamentals here! Most of the people on Robinhood don’t know a thing about market fundamentals, and those who do will likely scoff at the very subject.

Back in the year 2000, while I was taking an Information Technology class in college (more specifically -Oracle), I recall one student loudly telling another that his JDS Uniphase stock had nearly doubled to something like $105 per share. The Dot-Com bust spared almost no tech company, including the biggest names in tech at the time.

A year later, JDS Uniphase was clinging to $5 a share. Yes, the stock recovered much later, but the moral of the story is simply keep your powder dry. There will be a chance in the future to make money in the market. Now is not the time. Park your cash in different places, earn that measly percentage rate that your family & friends are joking about, and wait patiently.

INFLATION

One of the main caveats to holding cash is inflation. But with 30 million people out of work, stores and small businesses closing by the thousands, and millions facing eviction, that’s not a worry right now.

Yes, the Fed will likely print more money, but it’s extremely likely that will be eaten up feeding liquidity into a the market in any kind of event like the one we see today. That, my friends, will largely end up in the pockets of a handful of billionaires and opportunistic investors (kinda like us, but with more access) who will be buying real estate, equites and other assets at a very nice discount.