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It's a Mad, Mad, Mad, Mad World

10-23-2020

Schizophrenic responses to earnings reports continued, the net effect being that for the most part, if you look at the recent two-day period around the earnings releases, most of the well-recognized companies did poorly. Even cult favorite Tesla was net-net unable to make any headway on its "earnings" report.

From the Doghouse to the Slaughterhouse What's particularly clear is, if a company is already unpopular, it really got slaughtered. Case in point, Intel, a company that I have done a lot of battle with over the years, saw its stock price hammered almost 15% due to slowing in parts of its business, on top of the well-understood manufacturing issues it has. However, at 10 times earnings and a yield of almost 3%, I would say its problems are pretty well-reflected in the valuation currently.

If the environment weren't so insane, I'd be tempted to buy some. Of course, I could say that about a handful of other companies that are not in the mining sector, but the environment is so dicey, I don't feel at all confident in tackling the issues.

No Sensible Moves In Unsensible Times Suffice to say that something seems to be amiss with the bull case when so many companies are not able to win at the usual game of beat-the-number. Whether that turns out to be meaningful is too hard to say at this juncture, however.

Turning to the action, the indices were weaker through midday, led by the Nasdaq, which fell about 0.5%. In the afternoon, the market struggled to get back to around unchanged, which is where it was with about half an hour to go, when I decided to leave.

Away from stocks, green paper was slightly weaker, fixed income was about flat, while the metals were fractionally lower. The miners were weak once again.

Positions in stocks mentioned: none.