Ah yes, if we try hard to catch our breath amongst the waves of supposedly bad news flowing over us, we may just find what Mick promised long ago:

“You can’t always get what you want
But if you try sometimes you find
You get what you need.”

I liken it to the feeling that we have been getting washed under the waves with all sorts of fear-mongering headlines, having to then hold our breath while waiting to fill our lungs with air any time our head would pop back above water.

I Like Warren’s Latest

Warren was asked in an article over the weekend if he was worried about the markets. He answered,

“I don’t ever recall having a feeling I knew where the markets were going.”

Then he was apparently asked what others could do when they were afraid of the markets, he answered,

“Stop watching it so much.”

I agree.

“But it is scary….”

Sure it is if you believe all the garbage that flows…but markets have proven for the better part of the last 200 years that the loudest experts are the most incorrect over time.

There is that ugly word again – time.

That roller-coaster feeling which plagued the markets for all of January and most of February has brought us to a seeming pause – a respite from the never-ending feeling of that trap door in our minds eye giving way – a calm bay of protection from what we are told is an on-going storm.

The bears are quick to note that we should enjoy it while it lasts as the next spin cycle is on its way. The black swan hunters are telling us it is simply a reload and that all bear markets have rallies in them. The doomsday crowd is beating its chest sure that resistance will win out and destruction will be our only future.

I chuckle sometimes when I hear all this garbage – mainly because I wonder who will buy all their newsletters if their doomsday world comes to pass.

So Where Did All The Bad News Go?

Let’s see, so we ended 2015 and began this year with the following major elements ahead – in no certain order:

The world is ending because of China
The world is ending because of cheap oil
The world is ending because of energy sector high yield debt collapse
The world is ending because of the strong dollar
The world is ending because of the Zika virus

…and now we see something a bit different.

Energy and commodities have all bounced in the last few weeks. Recall on January 22, we sent a note out about just this type of event. A quick review is in order:

That morning, crude oil has just broken below $30 and was immediately down several more percent as calls hailed in from every corner of the “oil experts” world calling for a “crash to the $20’s” even as one expert suggested $10 a barrel was now in the cards.

Back then, we suggested that often the last portion of any significant sector adjustment can sound and feel like the worst part. Sure we may spike down into the 20’s again as and if a panic wave hits but as we stated then, we suspect this is nearing the end of the price collapse.

We do not expect a race back to the upside however as literally thousands of wells are drilled and capped – waiting for higher prices. It’s an old story now – time to move on.

The good news? Even high yield bonds are adjusting to the recent “new perception” as can be seen on the chart below:

The first chart shows the spreads so many feared in the last few weeks were a sure sign of coming collapse – have already fallen over 500 bps.

The second shows that all commodities have had a nice little bounce – right at 10% from their lows – and their stock sectors have seen a nice batch of short-covering indeed.

Recall this all arise from deep in the pit of darkness which so many assumed would cloak the horizon forever. Remember – when it finally all becomes “obvious”, it is really close to change.

What Now?

The market has staged a “surprising comeback” as the experts chime in. The Presidential Election is getting as ugly as we suggested it would – expect more. Too many are shocked that Trump has come as far as he has. It is the outcome of 8 years of abuse.

Imagine your legacy as President is that you made so many crappy decisions that flew in the face of your campaign promises that you set the stage for a guy like Trump to become popular to replace you. Wow.

It is time for a change and I just hope we are all brave enough to make the change.

Here is the more important element though:

It would be easy to get lost in all the speeches and debates. It would be simple to assume the world is terrible. But that would be an error. The world always needs help. Indeed in recent notes we have suggested we pray for continued problems to fix and remedies to work toward.

Without our problems and hurdles to overcome, what would we awake each day to solve?

The Bottom Line

We are going to have ringside seats to some nasty stuff for the next 7 months as we whittle down the votes to a final winner for President.

Ignore most of it as we need to be centered on this fact…

You win an election by gathering a group of people together and reminding them of how good it used to be.

Once their eyes fill with tears as thoughts of the good ole days fill their head, you tell them who is to blame for changing what used to be so good.

And then, once they are mad as hell and want change again – you tell them you are the change.

It’s been this way since we had President Number 1.

In Closing

Sorry – got a little wordy today – did not intend too.

Here is the deal: Pray for continued chop and angst. Pray for the fears to last longer. Pray for the “earnings recession” to have another quarter or two in its lifespan. Pray for the headlines to get ugly again.

Use periods of red ink to your advantage. They end like all the others have. They are never fun to endure or live through….they test your will to build when others refuse to.

The really bad part of the process of building wealth over time is that as we age we learn what Warren already knew:

To get the results shown in long-term readings of return, we need to invest the whole way through during the good and the bad.

We can’t time or guess the future.

If we could, there would be an also written to disprove it.

Patience and discipline my friends….patience and discipline.