I love the ‘Lowering of Expectations Season’ which precedes the release of corporate earnings. It gives those of us who are bullish the ability to use market needed drawdowns - such as the 4% pullback we experienced - as a way to add to profitable positions and shake out the weak longs. 

For the last few years, ever since Sarbanes Oxley was introduced into the capital market structure a decade ago, companies have ‘lowered expectations’ with vigor in order to avoid the perception of a violation of the rules. It’s a pattern that has repeated itself quarter after quarter.

Unfortunately it keeps money on the sidelines at the worst possible time. Worse yet, people find themselves in investments which are immediate losers. Buying a 10 year bond that yields 1.95% with inflation (As measured by CPI) at 2.9% is all risk and no return.