Broker Check


June 05, 2024


Ischia, Italy

June 2024

I pen this commentary overlooking the Mediterranean Sea, more specifically, the Gulf of Naples. WOW is one adjective to describe this peaceful paradise. However, WOW for this writing, encompasses the following:

Wall Of Worry

An old Wall Street adage is that bull markets climb a Wall Of Worry. A mindset that keeps investors fearful, under-invested, and skeptical. Today's bull market, looking back to the major sell-off in 2022 for all capital markets, certainly supports the WOW theory.

Hardly a consensus that 2023 would reverse the 2022 damage, and certainly unexpected that the technology sector, with the extension of artificial intelligence (Ai) would be so powerful.

A fair question 18 months later from the depths of the 2022 sell-off, is where are we, and where are we headed? Our framework follows:

Interest Rates & Inflation

We have posited in writings and conversations that the grand bull market in bonds from 1981 to 2021 was over. A 40-year run, nearing this writer's time in the business of Wall Street, that took T-Bills from 16% to near zero.

Our Federal Reserve, and to a lesser extent, the EU and Central Bankers in Japan should get credit for maneuvering and managing a series of crises over three decades. The last decade, not so much.

The zero-interest rate policy (ZIRP) never made sense to the average person in every day life trying to manage a household, business, or retirement savings. ZIRP has been a disaster and will continue to weigh on the global economy for years to follow. Our recommendation is to stay short average maturities (duration); long high quality credits and expect elevated interest rates and inflation to remain.

Artificial Intelligence (Ai)

The investment sector known as Ai we communicated in a short video last summer and opined the power of Ai to transform the global economy for the better. One cannot be naïve regarding troubling aspects of Ai in the wrong hands. However, Ai tools can checkmate the bad actors too.

Ai’s performance over the past year has been impressive and in the near term overvalued and we expect a correction. Our view remains this is an important long-term trend not simply a tradeable opportunity. Our recommendation is to stay the course and if the correction is sizeable to buy across the Ai spectrum: semiconductors, cyber security, software and hardware technologies.

A Wall of Worry lingers in aspects of the stock market as investor concerns focus on deficit spending, increase bankruptcies (due to ZIRP), and a troubling banking sector. An early “depression” developing in commercial real estate is a black hood on banking especially regional ones for years to come.


For certain we are climbing a Wall Of Worry, outside of the stock market, as it relates to geopolitical concerns as follows:

  • The broken US political system and upcoming November elections
  • Putin’s insane war with Ukraine
  • Iran’s green light to Hamas last October that provoked Israel to adopt a scorched earth counter move
  • And of course, the USA’s biggest foe, China, and the dangerous and aspirational motives of Xi Jinping

The China aggression most notably towards Taiwan remains in our view the biggest real WOW that could derail markets, especially Ai in light of Taiwan semiconductor’s role in that sector. One only has to view what Xi did in Hong Kong to imagine a more troubling outcome to economic growth and harmony if Xi potentially moves on Taiwan. We currently are holding the course and monitoring any accelerated move by Xi. We will keep everyone posted.

WOW is not a science. Humans are not very good at forecasting, especially when trying to time markets. The more seasoned and rational route is one’s time in markets. That is a personal and customizable conversation we will have with everyone in the midyear reviews.

Arrivederci e stai bene!

Goodbye and be well!

Kevin Lane

Lane Brothers Team: Kevin Lane, Joe Allen, Megan Lane, Lydia Rodriguez