What About Pork Bellies?

Just an FYI:

Are pork bellies the same as bacon?

ANSWER: Pork belly, like bacon, starts out from the underside or the belly of the pig. But don’t think of the word “belly” as in stomach, rather it’s the flesh that runs on the underside of the pig. Pork belly is uncured, un-smoked and un-sliced bacon

As a rule, all dogs and most meat consuming humans love bacon.

A guy I sorta, sometimes, occasionally follow has written an article - he publishes one weekly, that basically says that the “bulk” of the gains we sharpie investors have gotten over the last decade were generated by:

  1. A decade of monetary interventions and zero interest rate policies.

  2. A massive spending spree by corporation on share repurchases.

I have no idea if he thunk that up himself or not but he is attempting to debunk a Wall Street Journal article that says all our fat gains actually came from profit margins. However, an easier way of unbunking that claim might be to simply point out that for most of that time none of our companies produced much profit - and still don’t. Seems reasonable and seals the deal more quickly than all that dancing around the edges. So what?

Note: I’d like to go on record right here that I don’t actually know or have much of an opinion myself; however, regardless of the actual birth of all those nice gains, I am firmly on the side of keeping them. Besides, in the immortal words of Satchel Paige: Don’t look back - Something might be gaining on you! Which, itself belies another old saying: Those who ignore history are doomed to repeat it. Its like this: Everyday I eat some form of desert served up by our cook. Its always very tasty. Then I remind myself that I need to get rid of the calories which always leads to more exercise as I shuffle (I gave up running for a more obscure rolling type gait) around the lake. Talk about a flywheel!

And sure enough, something seems to be gaining on us as a lot of those frothy gains over the past few years are ebbing, if not gushing, away just now.

Guys name is Lance Roberts and he says he covers “global markets, bond markets, equity markets, commodities and economic news” which just about covers the entire dang shebang. In his blog he quotes something called Pavillion Global Markets which evidently has its own blog and they claim that the S&P gains over the same time frame came from the following:

  • 21% from multiple expansion

  • 31.4% from earnings

  • 7.1% from dividends

  • 40.5% from share buybacks

Note: Pavillion is very specific and precise in those numbers which leads to this quote:

"In other words, in the absence of share repurchases, the stock market would not be pushing record highs of 4700 but instead levels closer to 2800.

Such would mean that stocks returned a total of about 3% annually or 42% in total over those 14 years."

Now…in presenting all this, what Lance is creeping up on is whether or not the artificial influences noted above can be sustained for another decade. The Wall Street Journal then weighs in:

“As sour as the mood has seemed lately, the S&P 500 would drop by another 45% or so if both margins and price/earnings multiples reverted to their long-run averages. Such would take the benchmark back to a level it first crossed five years ago.

That sounds alarmist, but stocks’ level in 2031 could be the same whether Mr. Grantham is correct or not about a sharp bear market. The alternative could be milder selloffs and recoveries along the lines of what we have experienced recently that lead stocks exactly nowhere.” – WSJ

The scary stuff continues:

Reversions to the mean” is one of the most powerful forces in finance, The importance of which often gets lost during a raging “bull market” that seemingly defies all logic. Such was a point made by David Leonhardt previously:

“The classic 1934 textbook ‘Security Analysis’ – by Benjamin Graham, a mentor to Warren Buffett, and David Dodd – urged investors to compare stock prices to earnings over ‘not less than five years, preferably seven or ten years.’ Ten years is enough time for the economy to go in and out of recession. It’s enough time for faddish theories about new paradigms to come and go.”

Which then leads to this:

Throughout history, whether it is valuations, prices, profits, or any other metric, eventually, and always, deviations revert to the mean. Such was a point discussed in “The Market Is Disconnected From Everything.”

“Profit margins are probably the most mean-reverting series in finance, and if profit margins do not mean-revert, then something has gone badly wrong with capitalism. If high profits do not attract competition, there is something wrong with the system, and it is not functioning properly.” – Jeremy Grantham

Lance closes the loop with this:

Such is not a dire prediction of doom and gloom, nor is it a “bearish” forecast. It is just a function of how “math works over long periods.” However, during a “raging bull market,” investors always lose sight of long-term realities. As Howard Marks noted in a Bloomberg interview:

“Fear of missing out has taken over from the fear of losing money. If people are risk-tolerant and afraid of being out of the market, they buy aggressively, in which case you can’t find any bargains. That’s where we are now. That’s what the Fed engineered by putting rates at zero.

“We are back to where we were a year ago—uncertainty, prospective returns that are even lower than they were a year ago, and higher asset prices than a year ago. People are back to having to take on more risk to get return. At Oaktree, we are back to a cautious approach. This is not the kind of environment in which you would be buying with both hands.

The prospective returns are low on everything.”
For investors, understanding potential returns from any given valuation point are crucial when considering putting “savings” at risk. Risk is an essential concept as it is the expectation of “loss.”

The more risk investors take within a portfolio, the greater the destruction of capital when reversions occur.

This time is “not different.” The only difference will be what triggers the subsequent valuation reversion and when it eventually occurs.

Two previous bear markets taught many this lesson. Unfortunately, a whole generation of investors are learning this lesson the hard way.

None of which leads me back to Pork Bellies. In fact, I just threw in the whole Pork Belly thing for fun. But what it does lead me back to is this:

Despite the doom and gloom that seems to be galloping hard and gathering steam, the fact is that regardless of overall indexes, intelligent stock picking works. More to the point, once the market is done shuffling the cards it’s up to us as investors to choose the winners. And what better winners than our high growth SaaS companies that will still be leading the cloud revolution for a long, long time to come. I don’t see SNOW, DDOG and/or CRWD saying, “Oh gee, our valuations and stock value has been sliced and diced by mean old Mr Market - lets just take our ball and go home.” No…those companies, among many others, will still be cranking out market beating gains and will lead our portfolios higher. Thats the reality - the rest is just smoke.

All just my humble opinion of course. But I intend to keep doing what I am doing:

Retreat to High Ground as needed - Control my emotions, Eyes to the front, Mark my targets when they come, take advantage of TB opportunities when available, and hunker down, hunker down…hunker down.

All the Best,


mmmm, bacon

Retreat To High Ground Breakfast (RTHGB)

biscuits (homemade)
butter (awesome synergy with fellow starter; can set pick and drop back for 3, or roll to basket)


Scout Team
cheese on eggs

note, when made properly, biscuits already include butter & bacon fat as ingredients


Hi MostlyLong:

Your post has inspired me to pursue an idea that has been ricocheting around my mind for quite some time. Women spend a great deal of money on perfumes; many of which, are in fact olfactory pleasing and come with exotic names many times augmented by a hint of French. Or so it seems to this particular cretin. Anyway.

Now…bear with me here as this could be tricky ground: If the aim of the women who spend a great deal of money on perfumes is to perhaps attract manly attention - or even to augment additional manly attention getting factors and or features, then why not go with an olfactory gold standard for men and create a dainty perfume that combines bacon and that new car leather smell that is sooooo wonderful? Seems reasonable - albeit, it perhaps opens the door for allegations of the sexist pig variety. But then again…what normal healthy male among us has never entered/broached those premises before?

Now…in America, branding and marketing are the essential tools for product success - well, that and if they actually work. But thats another issue entirely. All we want to do is sell the stuff and give the impressions, nay…perhaps the illusion, that women who spend lots of money on expensive perfumes receive some definitive leg-up in the attractions wars.

So we need a well designed container and a French sounding name. I have taken the time to evaluate potential names and have come up with this:

Eau de Pig Le Car - which may be a little too definitive.

Odeur de Cochon de Voiture neuve - which is the translation of New Car Pig Odor and gets to the point… but sigh - is way too long.

hmmmm…I can see I am going to have to pass this on to the industries staff for further work once they get done with our new Never Erring Stock Barometer. (Every Investors Dream Machine).

All the Best,





Thank you Leana. Champ neglected to provide the link to his site. I guess he solved the naming issue. I tried to order, but got out-of-stock message. Something about supply chain something or other. Will try again tomorrow as I am certain the bacon-auto portion is USA-sourced but with French language on the label (best of both worlds).

1 Like

Since the stock market is so full of confusion and consternation, I have become convinced to go into the pork belly perfume business. I am beyond delighted to introduce for the discerning customer my latest offering- Porcine (pronounced POOR-See-Nay) PayPal and Bitcoin accepted.

1 Like

Hi Leana:

Just curious - have you tried this?

All the Best,


All Americans with the Entrepreneurial spirit salute (pronounced Saw-Loot) your leap into the pork belly perfume business! Having said that, being something of a product marketing guru - stated in all humbleness - I might offer a couple of marketing concepts to wit:

  1. You might consider adjusting the name slightly: Arome Du Porcine. The use of French in perfume sales, in lieu of some famous female celebrity spokesperson, seems to be the cats pajamas.

  2. It cannot be overstated that an initial sales campaign include a specific strategy to build volume by targeting men who would be enthralled by the product and purchase it for their wives, girlfriends and secretaries. You can easily do this by including a moderately priced Havana Cigar with all sales of a specific price point volume. This would be your Arome Du Porcine Tri-Pack and you would go for this tag line: For Men Who Want to Cover all Their Bases!

Note: Yes…Yes…Yes - I know, sexist pig and all - but, it is entirely lamentable that I am, as of yet, irreversibly Non-Woke; and further, am easily confused by all this mixing and matching of the ever altering, wide, wide world of pronouns.

How About That ZS Today!

All the Best,

Hi Leana:
Just curious - have you tried this?

No, I haven’t, but if you pay my very reasonable market research fee of $999.99 (reduced for you from it’s usual $1000 cost) I will gladly get a bottle and asses it for you.


1 Like

Hi Leana:

That is a very generous offer and once I am back from Memorial Day family stuff I will get back to you with all due haste. Hard to pass up these once in a lifetime deals. If you will provide a PO Box I can go ahead and forward my personal IOU.

I hope you and your loved ones have a safe, fun and thoughtful Memorial Day weekend!

All the Best,

I regularly smoke both bacon – usually wrapped around other proteins – and pork belly on one or another of my cooking tools. I can confirm, pork belly has a lot of fat.

It’s the ‘high valuation’ choice on the pork scale. Like my stock choices in the most recent short term.

If you’re in the Midwest come on by for a pork taste-off.


1 Like