To The Moon

The stock market could go through a massive correction over the next year because the economic reality and market focus seem to be at odds.

It's a reminder that price matters!

The S&P 500 is trading for 25x earnings, which is on the high side of a non-recessionary period (when the E in P/E falls).

But does the market deserve to trade at a premium?

- Many retailers are reporting negative comps as customers cut back on higher priced goods.

- Have you noticed more sale signs on everything from groceries to clothing? Demand < Supply???

- Auto demand is falling relative to supply and margins are coming down.

- American Airlines just said they have lower demand than expected.

- Relatively high interest rates are making it harder to buy homes and cars. The value of both appear to be falling.

The only positive is AI and (this is going to shock you) normal people don't care!

I'm not predicting a deep recession or a collapse, but going from a 25 P/E ratio to a 15 P/E ratio isn't out of the question. That's a 40% drop in the market!

I've been selling stocks I view as overpriced and have been buying stocks with P/E under 15 and in some cases under 8. I've also focused on companies with a lot of cash. I would rather be bargain hunting than chasing FOMO!

$S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ(.IXIC)$ $Invesco QQQ(QQQ)$ $NASDAQ 100(NDX)$ $DJIA(.DJI)$ $GLOBAL X DOW 30® COVERED CALL ETF(DJIA)$

Image

https://x.com/TravisHoium/status/1795850641224393184