07-30-2020: Fundamentals vs Tweets

Year-to-Date Strategy Stats as of COB today:

+26.85% : Turner Quant Advantage

+ 6.50% : Tactical Growth

- 6.13% : Total Market

- 0.42% : Diversified Income

+ 2.24% : Aggressive Growth


The market sold off today, ostensibly on the massively intelligent logic that a tweet from our president about the election. Seriously? Now, we are not only ignoring the economy when it comes to the current market condition, but a mere presidential tweet about potential voter fraud is enough to see a 1%+ sell-off in the market? That's almost funny... no... I take that back... that's actually funny since Trump is, obviously, just yanking the chains of his opposition.


Oh... you think the sell-off today had nothing to do with the TT (Trump Tweet)? You must be thinking the huge, unbelievably large drop in 2nd quarter GDP of a massive -32.9%!! What the headlines and the talking heads bury is the drop, while significant, was really just -9.5%... the -32.9% is an "annualized" number and was used all day to make things 'seem' worse than they are... but there is no getting around the fact that the -9.5% drop in GDP is the worst since they started recording quarter GDP numbers, 70 years ago. But, are you really surprised? I am. I am surprised that the number wasn't larger... quite a bit larger. How can you shut down an entire world and only see a -9.5% drop in GDP?


Or maybe the big sell-off today was due to the unemployment numbers; another 1.4 million jobless claims. Yes, that could have contributed to the sell-off today. While that is not a good number, it is not surprising either. And since it is obvious that the market is almost totally uncorrelated to the economy, what's another 1.4 million jobless claims when all that matters is free money and a vaccine around the corner?


Like I said in yesterday's blog... it really doesn't matter why the market moved lower today. It only matters that it moved lower and not enough to matter. By the end of the day, the loss had been cut almost in half.


Don't get me wrong... I am a firm believer that one of these days, the market is actually going to correlate to the future economy. But, to think that is happening today flies in the face of reality. The stock market is expecting a COVID-relief package out of Washington to the tune of $1++++ trillion dollars. The market believes a vaccine is immanent. The market believes the government (and especially, the president) has the market back-stopped and will dump whatever money it needs to keep the economy/market from crashing. And... the market believes that as soon as the election is over and a vaccine is being mass produced... all will be right with the world and the economy/market will boom higher. That's a really, really good dream. I doubt that it has anything to do with reality, but as they say, "Hope springs eternal!"


So, what does this mean? I took today's sell-off as a buying opportunity. I bought TDOC (up 8.84% today) and DOCU (up 2.75% today) in TG. I plan to do a little more buying in the morning in the Tactical Growth model. It is the only strategy not fully invested.


As for the Turner Capital strategies, we had some great gains today in TQA, TG and AG (see stats at the top of the blog).


The afterhours are screaming higher... tomorrow should be a great day for my clients!

Turner Capital

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