When a computer tells you one thing but your gut tells you another... which one do you trust?
The pro-computer crowd would argue that human decisions are clouded by emotion.
Machines and computer models solve this problem. They take the "human" out of things. They aren't biased. They can quickly and dispassionately collect and analyze thousands of data points.
But that ignores the extreme power of the human mind. In many cases, we're capable of far greater insight than a computer. Computers can churn out data-based results that humans can instantly recognize as completely disconnected from reality.
Personally, I've always valued human and real-world experiences over what the machines and models spit out at me. It's how I get an edge as an investor... No computer can have the same conversations and observations as I do.
For example, by traveling the country and talking to all different types of people, including many business owners, I was able to call for inflation much earlier than the models: My team and I shared our first inflation warnings in February 2018 – pointing out that conditions were in place to allow the sort of supercharged inflation we saw when COVID-19 struck a couple years later.
I've focused on inflation ever since I experienced it firsthand as a SuperAmerica gas station jockey in Minnesota, when gas was 25 cents a gallon. In my Income Intelligence newsletter, we've been monitoring inflation for a decade...
But inflation is just one example. I hone my intuitions on many points with research and real-life experiences. When this intuition also sides with the machines, I have a lot of confidence in the result... And that means I have a different take on the economy from the general public.
Right now, Americans are scared to death of a recession. A recent Quinnipiac University Poll found that 85% of Americans think we're going into a recession over the next year. Specifically, 45% of respondents said that a recession is "very likely," while 40% said that it was "somewhat likely."
Similarly, a late-March survey conducted by Momentive found that 81% of the 4,000 adults surveyed think the U.S. will see a recession in 2022. Maybe you're among them.
I get it. This is not a crazy fear. The headlines are terrible. Between war in Ukraine... mass murder in our communities... rampant inflation... and rising interest rates... no one could blame you for nursing doubts about the economy.
But today, I'm trusting my gut...
In a typical year, I log at least 150,000 miles flying. And I'm usually on a few different flights every single week. Most recently, I've traveled to California, Philadelphia, Dallas, and Montreal.
I have expected to see fewer and fewer people on each flight over the last few months. After all, ticket prices have been higher. But that's not what I've encountered. Instead, most flights I've been on have been packed full.
What's more, the computers and the data agree with my gut... giving me even more confidence that my optimism is on point.
The financial giants' best models have predicted a low likelihood of a recession. Add to that the economy's staggeringly low unemployment, solid wage growth, and abundance of open jobs. Unemployment sits at just 3.6%... That's one of the lowest rates since the late 1960s.
Now, this doesn't mean the current troubles in the stock market are over. The Federal Reserve is tinkering with interest rates, and stocks continue to trend downward. We could see stocks sink more before they turn around.
But while there's still a lot of fear out there, I'm not panicking about an economic collapse.
What does your boots-on-the-ground experience tell you about the state of the economy? Send us your stories at [email protected]. We read every e-mail.
Now, here are some of the things on your minds this week...
Q: I came to my computer because I was experiencing severe leg cramps and thought I'd try to learn what can be done to avoid such in the future! Obviously, that is not what you were addressing, but I'd truly appreciate learning what, if anything, can be done to avoid such in the future. I take over-the-counter leg cramp pills, but they are quite useless. Have you any recommendations? I'd certainly appreciate learning what, if anything, can be done to remedy this problem! Thank you. – E.O.
A: Anyone can experience leg cramps, but they're more common in folks over 50. Cramps often stem from too little calcium, especially in older folks. Leg cramps at night could be due to things like too little magnesium, dehydration, or Parkinson's disease. Even certain medications, like diuretics, can cause leg cramps.
Make sure you're getting enough water. You can read what we recommend here. Get your calcium needs through food sources, not supplements. And you don't need to depend on milk and cheese... Almonds, orange juice, and sardines are all good sources of calcium.
And finally, stretch. Stretching is good not only for cramping prevention, but it also helps when you get cramps. So if you experience a cramp in the middle of the night, take a few minutes to stretch. You can find some stretches to get you started here.
Q: Is there a difference between heatstroke and heat exhaustion? – T.H.
A: Heatstroke is a more severe form of heat-related illness. As we wrote last week...
Heat exhaustion happens when your body overheats to as high as 104 degrees Fahrenheit. You might feel the following symptoms:
- Dizziness or feeling faint and lightheaded
- Loss of appetite
- Heart racing
- Nausea or vomiting
- Vision problems
Heatstroke shares some similar symptoms, like dizziness, but your body temperature will continue to rise (more than 105 degrees), you'll stop sweating, and you could experience hallucinations, confusion, and even seizures.
The best thing is prevention. But if you do start to overheat, take steps to cool your body down like removing any layers of clothing you can and using a cold cloth to bring your temperature down. If you're experiencing symptoms of heatstroke, you'll need immediate medical attention.
What We're Reading...
- Did you miss it? There's been a big change in the 401(k) world.
- Something different: What Sri Lanka's economic crisis means for the world.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
June 24, 2022