THEME: Animals — Bulls, Bears, and Serpents

May 23, 2022

Michael’s CIO (Check-It-Out) Report on the week just past — events, sarcasm, and global macro reflections

Photo and graphics by Michael Ashley

THEME: Animals — Bulls, Bears, and Serpents

GL🌏BAL MARKETS

• Bulls, Bears, and Serpents: Stock headlines and media pundits talk in terms of bullish and bearish markets, which can be confusing for many. Why do these animals describe markets?
• Bulls & Bears: To professional investors, bull🐂markets are good — they are positive and upward moving, and hard charging like a bull! Bear🐻 markets are bad — they are negative and declining, and dull like a hibernating bear! However, I am not a huge fan of these terms because they oversimplify and for many non-professionals, they are counterintuitive. Why might they be counterintuitive?
• Bears: Most people love bears; they are methodical, cute, and cuddly. Many of us had a teddy bear, Care Bears Bear, Paddington Bear, or other stuffed toy bear as a child and watched cartoons of Winnie the Pooh, Yogi Bear, or Baloo (singing about the “bare necessities”). Therefore, subconsciously, bears are considered friendly
• Bulls: On the other hand, most people are afraid of bulls (they are considered untamable, bucking wild, and destructive — think mechanical bull, bull in a China shop, stubborn as a bull, and the sport of bull-riding). Children rarely ask for a stuffed bull to play with. Thus, subconsciously, bulls are often considered negatively
• Metaphors: Thus, I understand why people might think a bear is good and a bull is bad when describing investments (or anything else). But is there a better animal to describe markets?
• Serpents: A serpent🐍(any Slytherins in the house?) may be a more suitable metaphor of how a market moves and is influenced since investments and markets in general almost never progress in a straight line. Rather, progress is made by some parts of the body inching up as others inch down, much as an entire stock market doesn’t unilaterally move in the same direction
• Lateral Undulations: For snakes, these movements are often described as lateral undulations, side-winding, concertina, rectilinear, or slide-pushing. In all these cases, progress is made, but with caution, rarely in a straight line, and with elements of unpredictability

BIZNOMIC$

• Stork: The U.S. government is flying in baby formula from Europe on Air Force planes to alleviate shortages. 39 tons arrived on the first flight. The effort is officially known as “Operation Fly Formula” (and unofficially known as “off”) 😏 obviously they didn’t consult me on the name😏
• Birds: Elon Musk has still not bought Twitter — his vacillations earning him the moniker of Elon Mush?🐦
• More birds: Avian flu (aka, bird flu) has spread to over 35 states, killed more than 38MM poultry (e.g., chickens, turkeys, ducks), and driven up egg prices 🥚 — It has also been detected in wild birds🦅
• ApartmentZ: As Millennials move into homes, Gen Z will surpass Millennials as the largest cohort in the apartment rental market — Running Point continues to see select private real estate opportunities as the sector is favored by robust supply-demand fundamentals and new household formation in the U.S. approaches 1.5 million next year
• Pox: Monkeypox, normally considered a rare disease, has been detected this season in at least 250 people across more than 17 countries outside of the monkeypox endemic areas of Africa

CONTENT

• Blue Magpie: The U.S. will protect the national bird of Taiwan, as well as the rest of the country, from invasion by China according to U.S. President Biden — the third time in nine months that Biden has made such a proclamation

PERSONAL

• Local: Last week, Running Point was at the South Bay Police & Fire Memorial Foundation Medal of Valor Luncheon to honor South Bay’s law enforcement and fire protection agencies — each story of quick thinking, action, human outreach, and selflessness was moving and inspiring
• Privates: Find me this week at a small private markets investment forum (private real estate, private credit, and natural and ecological assets) in Dana Point and an evening leadership event in Santa Monica

Best wishes for the week ahead😊
Michael
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Michael Ashley Schulman, CFA
Partner / Chief Investment Officer

“We deliver custom investment solutions, innovations, and unique perspectives to you and your family.”

Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-22–27

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