Can’t wait for Fed Speak to be over… long-live Fed Speak?

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Do you feel like all anyone is talking about is what the Fed will do next? I feel like conversations have shifted from fundamental work to “will the Fed cause a recession?”… and we’ve been doing that in earnest for a year now and I’m over it.

Well, we’ve been doing it for 14 years at least, but it feels really heightened right now.

Some people may say, “yeah, they can cause a recession and impact earnings!” and I get that. But it feels like digesting “Fed speak” is the only conversation right now.

Some people may say, “that’s how it has always been. The Fed moves markets. Don’t fight the Fed.” Was it really always this way? As a result, I guess do limited fundamental work and just monitor the Fed? A lot of people do that I guess. It sure does take the fun out of fundamentals. It doesn’t feel like companies like Autozone or Monster Beverage did well simply based on what the Fed did.

I remember when it was “jobs Friday” and everyone waited on bated breath for a weaker jobs number so that it meant the QE spigot stayed on. And a weak number sent stocks higher. But did a lot of that anxiety really matter? I don’t know. Maybe. But we’re doing it again, on steroids.

I think after each crisis we say to ourselves, “the Fed is been so dominant because of extraordinary measures taken to support the economy [or stifle inflation].” But even so, it stays part of the conversation…

Truth is, something will always dominate the conversation. Probably just to distract. Especially when there’s limited new earnings releases.

Anyway, more of a “musings” post, but I wonder if it’s an opportunity if we were to zoom out with a longer-term perspective. I’m not saying people aren’t doing any fundamental work, and I am not saying you can tune out the Fed completely.

But I am asking myself if I would be a better investor for tuning out 80%+ of the Fed stuff and poured myself into at least medium-term analysis of where I think a company will be. I think its tough to argue with that.

2 thoughts on “Can’t wait for Fed Speak to be over… long-live Fed Speak?”

  1. Yes it’s silly sometimes how little attention goes to fundamentals, but that’s where the opportunity lies. I do think Fed policy can affect valuation multiples, but that’s not something that can be confidently predicted.

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