Omicron Surge

 Omicron Surge

The recent Omicron Surge is eerily similar to the Volatility Index in the U.S. Stock Market, so similar in fact this author is willing to step out on a limb and predict that just like sustained high volatility, sustained Omicron is nearly impossible. What does this mean dear readers? The end is near for the pandemic.

How do I have the gaul, the IQ, the "je ne sais quois" to make such a bold statement when the likes of Anthony Fauci, the CDC, NIH, USA Govt leadership, not to mention the entire (mostly) media establishment has not broached the subject? Math my fellow financial farmers!

Extreme volatility is similar to extreme spikes in almost every natural event; it takes extreme energy to maintain extreme deviations from the mean. And nature abhors sustained deviations from the mean. Let me say that again just for good measure: Nature abhors sustained deviations from the mean.

With the Omicron variant now surging to over 1,000,000 (1M) case per day, the White House narrative has changed dramatically over the past several weeks from "We will defeat the virus!" to "Contain the virus!" to "Embrace the virus!" Immutable natural laws are impossible to defeat.

History, I believe, will show that the vaccines acted as a significant and worthy speed bump which prevented millions of deaths, but probably more importantly, bought us time as a nation, as a species, to be overcome by a third wave of intense infectiousness and lower lethality. Reversion to the mean is my expected result.

Stock Market Roller Coaster

For those faint of heart, the past couple weeks have not been kind; up, down, spin around, back up, only to fall down again. Yikes!

What's an investor to do who wants to Invest Like A Farmer? Keep the plough steady and keep your eyes level on the horizon that's what!

The fact of the matter is that the volatility index has been particularly quiet through the summer and just as the classic entry into autumn begins the VIX is at it again moving up hundreds of points one day and just as much (or more) down the following day.

In spite of these often drastic movements, dividend flows have remained consistent (and rising.) Positions of monopolistic companies often improve during chaos as the most damage is typically inflicted on small capitalization companies (if you want to see something really scary, take a look at the Russell 2000 Small Cap Index.)

Framing all of this is the concern of a major economic slowdown in Europe (probably true) which will spread to the United States (probably true) that will ultimately derail the recovery and impact the real estate market (maybe true, especially in regards to the real estate market which looks poised to triple dip.)

Blue chips here look REALLY appealing as well as select names in the tech and biotech sectors. It's tough to get bullish on small caps in the face of a slowing economy. With the Fed most likely remaining dovish for the foreseeable future real estate should muddle along, except in a dozen areas where it clearly has extend itself. Pockets of wealth, affluence, and creativity will continue to bloom, get funding, and launch exciting new products and services; that roadmap has been in place for quite some time.

For those who wish to Invest Like A Farmer, keeping the plough steady and your eyes level on the horizon should pay off once again in the months to come.