Follow Your Own River

Written By Christian DeHaemer

Updated May 15, 2024

My wife had a business meeting north of Orlando, so we decided to make a mini-vacation of it, leaving Maryland's frigid weather behind for Florida's warmth. True to the brochure, it was 75 degrees and pleasant when we landed.

On Sunday, we decided to check out a cold spring in a nearby national forest. The website had promised bears and alligators, snakes and egrets. There were canoes for rent, so we paid our $40 and walked down to the landing.

“Here is your boat,” said a man in a big straw hat, pointing to a worn, fiberglass, 16-foot canoe. The dark-blue paint had long since given up, and great blobs of yellow resin had been slapped to the bottom in a half-hearted effort to keep the water out. But it was the silver duct tape that bandaged a jagged bend in a metal thwart that sealed the deal.

“There are alligators here, yes?” I asked.

“Just little ones mostly,” he replied with a shrug and a smile.

He gave us directions with the back of his hand, saying to keep to the right until you get to an old concrete bridge in about half an hour.

“Most people have a drink or lunch at the tiki bar on the island and then come back.”

That explained the state of the canoe. Things were about to get interesting.

Orlando, Florida

Most people go to Orlando for the Disney and Universal theme parks. They pack up their offspring and make the pilgrimage. Like a diamond for a bride, all self-respecting middle-class families have to bring their kids to Disney at least once.

It’s a scam, of course. You pay ungodly amounts of money to stand in line all day, fight crowds, and eat bad food, and yet it's what people do.

I bring this up because I keep seeing charts and reading articles regarding how overvalued the S&P 500 is in relation to previous bottoms. It seems that the S&P 500 is worth 150% of GDP right now, and yet at the bottom of bear markets, after everything washed out in 2001 or 2009, the market was trading at just 50% of GDP.

This would suggest that we have a long way to fall, and there are all sorts of other value meters that the permabears bring out — inverted yield curves, P/E ratios, etc. I imagine that they will be right.

However, I keep seeing equities that I want to buy. The answer to this paradox is that the stocks I like aren't in the S&P 500. I like Mexican airport stocks, Brazilian oil stocks, offshore oil rig companies, and international tankers. I also like small-cap AI stocks and office investment REITs. In fact, in my trading service Launchpad Trader, I just banked a 52% gain in five trading days from one of these AI stocks. That's not too shabby.

I like these stocks because they are extremely undervalued with solid growth prospects. I like the fundamentals at a time when most investors won’t touch them.

Much like they say you must go to Disney World, they also say you should put 60% of your money in S&P 500 index funds and 40% in bonds. Well, we all know this was a terrible trade last year, losing more than 23%. 

During the crash, people tell you to stick with it and not to sell. After the crash, they tell you dollar cost averaging is the way to go. They are wrong. You want to sell early and buy back just a little bit late — but really you don't have to play in their sandbox at all.

I’m here to tell you that you can make your own index fund. You can find better stocks than the average, and it's more rewarding to take a leaky boat down an alligator-infested river in search of a mystical tiki bar than it is to spend hours zigzagging through a cattle chute just to be hand-fed sanitized fun for 90 seconds.

All the best,

Christian DeHaemer Signature

Christian DeHaemer

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Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.

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