Missing the night, now that everything is brightMissing the night, now that everything is bright

It's been a fun ride, this far, and here are our returns at the end of January 2024:

We have a wider section on valuations, market thoughts and how we think about where we stand today, in the Townhall on Feb 10. Please do attend!

And because we have so much to say then, we won't say THAT much right now. I want to highlight something, as I realize people wonder how bullish this territory is. There will be many people who haven't seen too much of a bear market. They didn't live through 2020 (and even that wasn't too much). The stock market hasn't seen a down calendar year in 8 years. The fear is of a crash, a fall from here, simply because the going's been so good.

That thought is not guaranteed to be wrong, but this is probably not the right way to think about it.

Markets rise because they can fall.

And because they can fall, and because they do fall, you appreciate the rise a little more. It's a bit of the yin and yang, and in that context, I saw two interesting quotes - on the same weekend - with my son, who's just discovered "Young Sheldon". The little genius there is, in one episode, on a quest to discover religion, and has a strange dream. In which there's a voice he speaks to.

"But why is there evil and suffering?", asks young Sheldon.

"Well, without evil and suffering, there is no good and happiness", answers the voice.

That's deep. You need the downs to appreciate the ups. You need the bad days to know that a day is good. If you had only good days, then the "goodest" (for lack of a term) day would be the good day and the "not quite that good" would become bad. The key point is: you have to have bad days to really appreciate the good ones.

We haven't had those lousy times in stocks in a while now. It seems far away but 2022 was a little disturbing, and then 2023 just blew the socks right off it, in the markets. For those of us who are new to markets, it seems like markets only go up, and if they go down it's not much, and it's not for long. For those of us carrying the scars, it's like 2007 all over again and we absolutely have to crash.

Markets will, eventually, show us that there is enough of the downs to frustrate us. But those downs are what make markets so insanely good on the upside. So much that when it's going up, instead of feeling that happiness, we feel the dread that it will fall again; but the fall is what propels the NEXT upmove, and so on.

The point is: we should expect and embrace the volatility, even if there is a fear of some sort.

The clincher came from a poem in "Orion and the dark", an animation movie that involves making friends with "Darkness". There's a poem in there, of a time when "Dark" just leaves the world, and that will ignite a thought:

I once thought quiet was the absence of sound
But learned it’s the space where small sounds can be found

I once thought Dark was the absence of Light
But it is the place where starlight is bright

The Quiet, the Dark The Dreams once embraced me
They let me feel safe In a world that erased me

Now that it’s gone, I miss the night
Now that the only thing left is light.

(end)

Maybe in some odd way, I miss the night in markets too. But when it comes, it will bring with it the ability to see the stars.

I'll just leave it there, just as spring is around the corner. Remember to smell the flowers!

De-light-fully,

Deepak