There is a young cowboy, he lives on the range, His horse and his cattle are his only companions,
He works in the saddle and sleeps in the canyons, Waiting for Summer, his pastures to change,
And as the moon rises, he waits by his fire, thinking about women and glasses of beer,
And closing his eyes as his dogies retire, he sings out a song which is soft but it’s clear,
As if maybe someone could hear,
He sings good night you moonlight ladies, rockabye Sweet Baby James,
Deep greens and blues are the colors I choose, won’t you let me go down in my dreams?
And rockabye Sweet Baby James
James Taylor
This goes out to Jo –the original moonlight lady. who left us two years ago. With love and respect.
Meantime, today, we begin the back half of Q1/26 (the year is now, improbably, ~12.5% in the books), and I have long believed that the trailing 50% of any calendar quarter is much more difficult to trade than its immediate predecessor, being largely bereft, as it is, of actionable dataflows. And this here quarter feels no different. Earnings, for example, and save the potentially world changing NVDA print next week, are substantially in the books.
There’s a GDP drop on Friday, but by now I am confused as to what period it covers and whether it is a preliminary estimate or a revision. We’ll get some macro data in March, to which I offer an unenthusiastic whooptie doo.
Ands to top it all off, the markets are closed today. For President’s Day. Soon to be renamed Trump Day. Until, that is, gravitational forces cause his humorless hubris to collapse on top of him.
Meantime, for market participants, it’s a tough read out there, and one against which we must be highly selective in allotting our wandering, finite attention spans. However, the following “stop the presses” item did catch my eye this past weekend, and I’d caution against you’re sleeping on it:
Now, being myself a young cowboy, and coming, as I do, from a family of Chicago Kosher meat producers (David Berg, Inc, whose claim to fame – long before my tsar-fleeing antecedents purchased it from its eponymous owner — was the production of the hot dogs that fed the 1860 Republican National Convention, which, after several ballots, nominated one Abraham Lincoln), I have been watching meat prices with great interest for quite a while.
But what I didn’t realize was that the supply problem was so acute. And, upon instructing the propellor heads at the General Risk Advisors Jet Propulsion Laboratory to conduct further research, I have learned the reason. The flesh of the nubile young XX cattle is so much more valuable than that of more mature bovine damsels, that they’s slaughtering ‘em young, and, most importantly, before they have a chance to reproduce at a pace sufficient for full population replenishment.
All of which reminds me of three anecdotes, the first of which is a quote from the Grapes of Wrath:
“When I was a kid my ol’ man give me a haltered heifer an’ says take her down an git her serviced. An’ the fella says, I done it, an’ ever’ time since then when I hear a business man talkin’ about service, I wonder who’s gettin’ screwed.”
I believe we have always known the answer to that question.
Unfortunately, though, if the charts above can be relied upon, then there is neither enough servicing, nor screwing, to repopulate the country’s Holstein populations to levels adequate to match those which prevailed when Gary Cooper played opposite Grace Kelly in the Cowboy Classic High Noon.
But hey, not all of us are cowboys, or even carnivores. So, far from everyone is getting screwed, or, if you prefer, serviced.
And don’t even get me started on those beef substitutes that were all the rage 5 years ago:
Now, I will cop to having choked down at least one of these Beyond Meat Burger Buggers, and to have lived to tell the tale.
But a share of its stock, once commanding a princely ~$180, can now be had for seventy cents. Meaning that it takes about eight of these to secure a Big Mac, and up to ten or more for a Happy Meal.
As reported last week, Mickey D’s stock is flying, its post- covid sales surging. All of which suggests that we may have achieved peak design – for hamburgers and fast-food franchise finance.
So, how you gonna trade ‘em, cowboy? If you figure it out, let me know. Because it sure beats the hell outta me.
But I’d keep my eyes and ears open by that roaring fire that you built under that big open sky. Because certain market movements remain puzzling. Last week was a rather frustrating one for the Equity Complex, for instance, and no doubt coincidently, the Big Dog didn’t choose to weigh in about it.
He was probably just busy, hopefully occupied, at least in part, with facilitating the incremental production of calves that become heifers which are impregnated by bulls, give birth, and start the cycle anew. Because he just doesn’t seem like a Beyond Meat kinda guy.
Such a project requires patience, though. And the marshalling of physical strength. Which brings us to our second anecdote, lifted from The Sopranos (and used before in this space).
A father and son bull look down from a hill where they spot a ravine full of the loveliest set of same-species females they, or at least the younger of them, had ever encountered.
“Hey dad” says Junior “let’s run down and f_ck one of them cows”.
To which the elder replies “I have a better idea, son. Let’s walk down and f_ck em all”.
Never have I heard such sound risk management advice – from biped or quadruped. And I kind of think that there’s rarely been a better time to bust it out.
My above supplied math suggests that 87.5% of 2026 remains to be, er, endured. The year, as all years do, will travel its own path, live a life of its own. But right now, it is still a nearly newborn calf, unsteadily testing its own legs and sucking its nourishments through its mama’s teats. And it behooves us, as investors and observers, to allow it to further develop before determining directly how we wish to comport ourselves with respect to it.
Its financial and economic vitals are, thus far, encouraging – GDP and Earnings Growth, pesky but finite inflation, etc. Yet so many of us have a churning in our guts about its prospects. And, by my perspective, justifiably so.
The latest bit of headline-grabbing agita is no new revelation; rather, it derives from a long-socialized fear that the pace of technology development is now so rapid that it threatens our ability to control it.
Perhaps, and I reckon we’ll see. But as AI morphs into the version of 2001’s HAL before Dave dismantled it, there’s a passel of money to be made by mere mortals in the transition.
But none of this is to help us with our more pressing problems – how to pump out more beef cattle, and what to do with our investment portfolios. Borrowing from our two anecdotes (in reverse order), I’d suggest we walk/not run into risk, such that we get serviced/not screwed.
However, seeing as how this note is dedicated to Jo, I offer a belated Goodnight, moonlight lady. Your life-giving essence flows across the ages, as does those of your offspring. And their offspring.
And though you all human, one final cow reference – our third anecdote – comes to mind (with a grateful nod to Ken Kesey):
A dumb-ass thing keepin a cow. But God O Mighty, ain’t they warm to lean against?
Well, yes, you were. And now I am told that you are headed to the place you best belong. To your home in the sky. Where deep greens and blues are the colors we choose.
And rockabye Sweet Mama Jo.
TIMSHEL