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Despite a few bright spots, we're going into the end of Wall Street's worst week since 2008. You read that right, but it's worth putting that "shocking" number in a larger context.

 

First, it has been a week of almost uninterrupted negativity. Our recommendations and the market as a whole are down close to 11% and a full 93% of all stocks . . . not just the S&P 500 or the Dow, but everything . . . have lost ground in the last five days. No sectors or themes have been spared. Our REITs and High Yield portfolios have resisted the worst of the selling, but they're still down a substantial amount.

 

It's painful but it's only a little more severe than what we lived through at the end of 2018, barely 14 months ago. Back then, people were fretting about the the yield curve, the trade war, and the Fed. Now all those fear factors have receded completely into the background. People are simply wondering how bad the domestic virus outbreak will get and how deeply it will cut into the global economy.

 

But from the bottom of that 2018 downswing to today, the S&P 500 has surged 23%, erasing all of its losses and more. Our recommendations, as it happens, have soared 43% over that same time period. Of course a week ago, the end-to-end numbers on both sides were a lot better, but we know the market will recover this time as well. The important thing here is the demonstration of how resilient sentiment really is. Moods swing but stocks generally keep moving higher in the long haul.

 

After all, while the 2018 downswing felt fierce at the time, few remember it now, even that last 8% lurch before Christmas. It's old news. And that particular mini-bear-market cycle wasn't quite as bad as the summer of 2011, when the S&P 500 dropped a gruesome 22% across 22 weeks. Remember that summer? The United States lost its AAA credit rating and markets around the world shuddered. Today, it's ancient history . . . stocks have practically tripled since.

 

And as for 2008, while no other modern retreat compares to what we've seen this week, we're still nowhere close to those credit crash conditions. Back then, it took the death of Lehman Brothers to trigger the worst selling . . . and the market fell 22% in barely five days. That's double what we've seen this week. We're a long way from that level of outright panic.

 

If we were, we'd see the Fed cut hold emergency meetings to cut rates and take other measures to support the market. That just isn't happening here. Ask us again in a week, but right now it looks like we'll get a "relief" cut in three weeks at the next scheduled policy meeting. There's no emergency here, only concern. And don't forget, while 2008 was bad, the 1987 crash took stocks down 22% in a single day. Again, this is barely a blip in history . . . and the market has recovered every time.

 

So where are we? Square (SQ) held up well yesterday, so it's clear that some people are actually paying attention to earnings. Anaplan (PLAN), on the other hand, suffered for falling short of absolute perfection on a day when investors were not in a mood to tolerate risk. We are confident that it will recover like our stocks rebounded from 2018.

 

CBRE (CBRE) held up quite well even though earnings were a touch low at $1.32 per share. That's only a rounding error off our $1.35 target and in the face of an unexpected $200 million revenue windfall ($7.1 billion when we expected $6.9 billion) it's not so bad at all. Management promises that growth will pick up later this year. We like that.

 

And Occidental Petroleum (OXY) edged up after hours on our final 4Q19 question mark of the week. The company lost $0.30 per share . . . more than we expected, but everyone knew it was going to be a bad bottom-line comparison. However, $6.8 billion in revenue came in well above our $6.5 billion target, so there's still some unanticipated strength here to fuel the recovery to come. We're excited.

 

Finally, TPI Composites (TPIC) confirmed its numbers, but here there was zero suspense or surprise. They told us what to expect three weeks ago and the final SEC filing matched the outlook in every particular. Even guidance is tracking right where it was earlier this month. While there's no direct upside here, it's great to see that the last few weeks of disruption in China (a key customer and manufacturing center) haven't budged the company's operations one bit. That doesn't look like a disaster brewing to us. We look forward to business as usual.