"Mr. Mason would like to speak with you." I certainly wasn't expecting to hear the voice of the personal assistant to a comedy legend when I answered the phone that day, but, as a small-business owner, one learns to roll with every situation.
It started off with a random run-in in a bar in New York's Upper East Side when I was out with some friends, and then the business card exchange (which was one-sided, he certainly didn't need one) and then the unexpected - and hilarious - phone call with him, which included my pitch for my asset management business, Portfolio Guru, LLC.
I would never divulge the names of any of my private clients, but I can say that Jackie Mason, despite my best efforts, was not one of them. He was a man of means and there were certainly no hard feelings on my side that his "people" decided to stay with their existing advisors. We actually ran into each other a few months later on 57th Street, and, as I re-introduced myself, his eyes lit up and he said, "Oh, you're the finance guy."
For better or worse, I am. Jackie Mason was the comedy guy. His passing at age 93 was reported this weekend.
How does that relate to the stock market? Well, I would go back to one of my favorite Mason performances, as gas station owner Harry Hartounian in The Jerk. Harry employs Steve Martin's Navin Johnson, who is not the most perceptive man on earth. In fact he is the least, hence the film's title. As Navin is randomly being fired upon by a lunatic gunman, played by legendary character actor M. Emmet Walsh, the exploding motor oil cans prompt Navin to believe that the gunman is aiming at the cans. "He hates these cans." Jackie's Harry Hartounian calmly informs him, "Hey, Pop Tart, he's not shooting at the cans. He's shooting at you."
That moment of hilarity captures the current state of the U.S. stock market. There is a sense of incredulity the likes of which I have ever seen before. Good news, buy! Bad news, buy! No news, buy! Just like Navin Johnson's misunderstanding of the gunplay at the gas station, the gullibles that I see trotted out on U.S. financial news networks just refuse to even contemplate the inconvenient facts that the U.S. stock market is at a cycle-high and approaching the dot-com peak in terms of valuation and that inflation is ripping through the economy.
Inflation hits corporations mainly through lowered profit margins and hence returns on capital. It's not as obvious as the shock you feel when you go to fill up your tank yourself (Navin's job has been disrupted in most places) but it's real. No amount of necromancy from Powell, Yellen and their cronies can offset that. Inflation hurts and inflated P/Es have preceded every modern stock market crash.
So... protect yourself. Find some horrifically overvalued names, and hit them with a Jackie Mason-style putdown while you short them with impunity. That excludes the Big Tech big boys. Are Apple (AAPL) and Microsoft (MSFT) overvalued at current levels? Yes. Are those companies at any risk of serious financial difficulties? No, of course not. It's always a great feeling to call a 10% correction, but that is not going to buy you a luxury apartment on West 57th Street, where Jackie lived.
No, what I am talking about here are stocks that could - and should - go to zero. These companies are essentially worthless, but in today's stock market they are valued as quite the opposite. I identified three in a research report I wrote for OHM Research in São Paulo last week. Piedmont Lithium (PLL) , Proterra (PTRA) and Lordstown Motors (RIDE) . These companies together produce economic value that, as Jackie would say, amounts to bupkes. Yet they sport a combined market cap of $4.5 billion. It's just insanity in a market that is full of it.
I will keep identifying these stocks that are valued on logic that is, as Jackie would say, fakakta, and you should keep taking the other side of idiocy. It doesn't always work the next day, but be patient... it works.
RIP Jackie Mason. Thanks for all the laughs.