15Dec11:20 amEST

Armed for an Economic War

I see Warren Buffett is out this morning opining that the current landscape is akin to an "economic war," as he was specifically referring to the lack of new PPP for small business owners and, generally speaking, most people not named Jeff Bezos. 

For those traders who recall 2008, Buffett actually sued the same language, word-for-word, to describe conditions heading into the TARP bailouts from Congress in the heart of the global financial crisis. 

Back then, the market's price action should have been enough of a motivating factor for politicians to get something done, what with the Bear Stearns, Fannie Mae/Freddie Mac, and especially the Lehman Brothers fiasco all leading up to TARP. Of course, equities overall were mired in a devastating and unforgiving bear market, with bears dominating just about every trading session in spectacular fashion

This time around, as we know, Buffett's words still carry weight, as always, but it just hits a few notches down on their impact when equities continue to drunkenly move higher with no worry in the world for a new strain of the virus in England, spiking cases in America, politicians fiddling on the stimulus, and several other major concern like a richly priced market amid skyrocketing bullish sentiment. 

Still, I expect politicians to heed Buffett's advice in due time, even if the market is not forcing their hands this time around. 

On that note, with threats of hard lockdowns ramping up again at the local levels, and also as we head into a Biden presidency, the firearms plays are as attractive as they have bene in a while. I expect a fair amount of new stimulus money to be allocated to purchasing firearms (not to mention the "perfect" 2020 holiday gift of arms), and general fear about civil/social unrest is sure to come back into play if the lingering lockdowns cause many citizens to reach their breaking points. 

It may be an economic war for now, as Buffett likes to say. But economic wars can have non-economic consequences in more ways than one. I am bullish SWBI and RGR over the next few weeks/months off their 200-day moving averages with the SWBI daily chart flashing a long, tight multi-month base, below. 

We Made It Stock Market Recap 12/15/20 ...


This website is intended for educational purposes only. | © 2024 MarketChess.com | All Rights Reserved | Website design by Saco Design | Superpowered by Site Avenger

mobile site | full site