Andrew Zatlin right here with a model new difficulty of Moneyball Economics.
I’ve spent the previous couple of days analyzing the info — and proper now, the U.S. financial system is buzzing!
In order we head into 2022, how ought to we be investing? Is it time to be bearish, or to run with the bulls?
In my newest video, I’ll begin telling you precisely what to do…
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Bullish or Bearish? Methods to Strategy 2022
Howdy, my pal!
Welcome to Moneyball Economics. I am Andrew Zatlin.
If you happen to’re like me, you are invested in a handful of themes and concepts…
And also you prefer to check-in infrequently to guarantee that the financial knowledge that’s coming in is constant along with your concepts…
Or if it is not constant, that you simply make some tweaks to get again on the precise path!
Properly, as we roll into 2022, I would prefer to share my investing concepts, in addition to the info that is behind them.
So over the following couple of weeks, I will be sharing a bunch of those concepts with you.
Trying on the “Huge Image”
Let’s begin off as we speak wanting on the “large image”…
In 2022, ought to we be bullish, or ought to we be bearish?
Properly, to chop to the chase right here, you need to be bullish!
However nonetheless, we have to reply some core questions right here like:
- Ought to we expect numerous volatility and turbulence? And
- What will we do if there is numerous volatility and turbulence?
The Information that Issues
So with that in thoughts, I would like to point out you a number of the knowledge that issues — a number of the latest knowledge.
As a result of it’s suggesting that subsequent yr’s going to be just a little spicy! Even spicier than we anticipated.
So proper off the bat, ought to we be bullish?
[Zatlin enthusiastic] Properly, hell yeah!!
You’ve acquired to be bullish if you’ve acquired a robust financial system!
And that is what we’ve got proper now — in actual fact, we have got a tremendous sturdy financial system!
Basically:
- Gross Home Product (GDP) is powerful…
- The labor market is tremendous tight…
- And inflation is up.
So, merely put, we’ve got an financial system firing on all pistons!
Let’s check out the newest knowledge:

Initially, jobless claims got here in at a 52-year-low.
We’ve not seen this since we had the wartime financial system of Vietnam in full drive!
And be mindful, the U.S. not too long ago acquired out of Afghanistan…
So we’re really in a reverse wartime financial system!
This can be a very sturdy labor market.
So the query is: Is that this a pattern, or is it transitory?
Pattern or Transitory?
[Zatlin with conviction] Properly, I am right here to let you know it’s not, not, not transitory!
This can be a large ongoing pattern! And now let me let you know how I do know…
You see, past the mainstream knowledge that everybody seems to be at, I’ve acquired my personal knowledge.
For instance, right here’s a snapshot of some proprietary knowledge that I take a look at:

Principally, I gather hiring knowledge. And this chart reveals a slice of my particular knowledge.
This reveals me what the most important corporations in America are doing. That is the S&P 500. That is their hiring.
As you’ll be able to, it reveals what’s happening month-to-month — and also you see that we’re at unprecedented ranges!
And it’s not taking place any time quickly.
This reveals that corporations are hiring.
And the takeaway right here is that, going ahead, corporations can be placing extra cash into family pocketbooks as a result of there’s extra folks employed!
On the identical time, wages are going up — and firms are seeing numerous demand. Which means gross sales!
The underside line: there’s so much of financial exercise happening.
In the meantime, I see the identical factor taking place on a year-over-year foundation.

That is unprecedented. That is enormous. That is an financial system that’s tremendous sturdy!
So the query is: Ought to we put money into it?
After all! You at all times put money into a bullish financial system! You go lengthy and robust!
What “Taste” of Bull Is This?
However now let’s get extra nuanced:
What “taste” of bull market are we taking a look at?
As a result of we’ve acquired a extremely inflationary financial system already… and now the federal government is speaking about throwing one other $2 trillion of stimulus into play.
[Zatlin with emphasis] This… is… harmful!
That is principally what some folks name a “coverage error.” As a result of there’s completely no cause, no justification, to do any type of financial stimulus.
Certain, 10 months in the past, situations have been completely different. They have been dangerous.
However as we speak? At present the financial system is sturdy. And it’s not transitioning away from that power. So why throw $2 trillion at it?
Brief reply? It isn’t about proper or fallacious:
It’s about profitable the election in November subsequent yr!
And fairly frankly, the Democrats are determined. They’re not in a great place.
And there are two causes for this:
One, they did not get elected as a result of folks preferred the Democrats. They acquired elected as a result of lots of people did not like Trump. So this was extra of a vote in opposition to Trump, than a vote for Democrats.
As Trump recedes and we go into two years of Biden, now we come to the second level:
The Democrats should defend what they’re doing.
“Shopping for” the Election?
And fairly frankly, the American public is not seeing numerous positives proper now.
That’s why they’re attempting to “purchase” the election by placing $2 trillion on the market.
And admittedly, I believe what’s taking place is an enormous downside.
Now, we might see some guys like [Joe] Manchin or a number of different Democrats increase their hand and say, “We do not want this.” So this $2 trillion package deal does not transfer ahead.
However let’s take into account what occurs if this package deal is a “yay.”
Right here’s What Occurs if it’s a “Yay”
For example we get the infrastructure invoice on the market — one other $2 trillion spent! — and the financial system goes from sizzling to white sizzling. Properly, consequently, we’ll get even extra inflation…
And that might drive The Fed to be even extra “hawkish” — in different phrases, as an alternative of only a small interest-rate hike, perhaps it’s a large one — like greater than 25 foundation factors.
In different phrases, we get uncertainty injected into the financial system and the investing setting.
Properly, uncertainty means turbulence and volatility.
It means numerous gyration within the inventory and bond markets.
So it’s essential make investments accordingly:
Which means: purchase the dips and promote the surges!
OK, in order that’s what occurs is the vote on infrastructure is a “yay.”
Now let’s take a look at what occurs if it’s a “nay”…
Right here’s What Occurs if it’s a “Nay”
The “nay” occurs if any individual wakes up and says, “No — no approach. We’re not doing this.”
And in that case, you’ve got much more predictability!
Principally, charges will not transfer up as a lot as a result of The Fed will not be compelled to counter the fiscal stimulus with financial contraction.
We don’t know but which methods the wind will blow. However over the following few weeks, we’ll discover out.
So sure — you wish to be lengthy and robust within the inventory market proper now…
However I’m additionally suggesting that, if the infrastructure invoice passes, you would possibly wish to shift away from “interest-rate-sensitive” investments — as a result of rates of interest will go up a lot extra in the event that they cross this infrastructure invoice!
The massive image?
Bullish — With Some Nice-Tuning To Come
Be bullish — and be ready to do some “positive tuning” as we be taught extra.
With that in thoughts, subsequent week so we’ll take a look at some different investing concepts…
For instance, if we’ll be bullish, the place precisely ought to we be inserting our bets?
That’s the place we’ll choose issues up subsequent week.
Till then, take care!
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