Identifying Long Term Growth vs. Short Term Trends - #5 - December 13th, 2024

Gary Brode of Deep Knowledge Investing and Robb Fahrion of Flying V Group discuss the 5 Things to Know in Investing This Week: The Fed Does Not Have Inflation Under Control Issue

-How to make money whether your thesis is long-term or short-term.

DKI Summary:

In this week’s Ask Gary segment, we received a great question about distinguishing between growth companies with true long-term potential and those riding short-term trends. The investment landscape surrounding COVID-19 is a prime example, as hundreds of companies saw their prices soar due to short-term trends, such as people being stuck at home. For example, companies like Peloton $PTON and Zoom $ZM soared to absurd valuations that reflected immediate conditions, but not long-term potential.

DKI Takeaway:

When the Fed lowered the fed funds rate in September, and again in November, DKI warned of the “Arthur Burns” problem. Burns was the Fed Chair who reduced the fed funds rate while inflation was on the way down, but not under control. That’s where we are now with the Fed cutting into above-target and rising inflation. With Congressional overspending (regardless of which party is in control), there’s continued inflation-causing stimulus. Other inflation metrics have risen in recent months as well. President-Elect Trump has made it clear that he wants a more accommodating Fed. It will be interesting to see if the Powell-led Fed, which cut rates just before the election, will push back with a pause or higher rates in the next year. On to next week, the Fed will likely go against our analysis and cut rates another 25 basis points. We’d offer them a complimentary subscription to DKI, but don’t trust them to use it.

Your links:

This week's written version of the 5 Things with graphs:

https://deepknowledgeinvesting.com/weekly-points-december-13th-2024/

Deep Knowledge Investing Subscription Page: https://deepknowledgeinvesting.com/we...

Flying V Group: https://www.flyingvgroup.com/

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Видео Identifying Long Term Growth vs. Short Term Trends - #5 - December 13th, 2024 канала Deep Knowledge Investing