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The overall market remains in an uptrend, but we’re seeing more and more unusual action among individual growth names, and thus are making moves mostly on a stock-by-stock basis.

With the stock market regularly surging to record highs, it may seem like an unusual time to focus on valuation. After all, many stocks are remarkably expensive on traditional measures, and even somewhat lofty on non-traditional measures. But valuation still matters, especially if the market loses its current luster (assuming that is even possible)!

This week, we are rolling forward our valuation comments – generally dropping our valuation based on 2021 estimates, where appropriate, while adding commentary based on estimates for 2023. Most analysts project that all of their companies will have higher earnings in future years, so we take the 2023 estimates (which are over two years away) with a grain of salt. And, they almost certainly will be wrong – we just don’t know in which direction or by how much. However, these estimates are helpful in understanding the level and direction of consensus opinion, especially between earnings reports when there is usually little hard news or fundamental data at the company level to support estimate changes.

It’s not news that the stock market has been sloppy lately. After the steady march upward to a doubling of the S&P 500 from the early 2020 low, and a 33% increase from year-end 2019 before the pandemic, one can hardly be disappointed in the market’s performance.

The market seems to have settled into complacency. We’re in a period after first-quarter earnings reports and government statistics indicate a surging economy, yet investors rightfully wonder if or when the Fed will raise interest rates and are starting to consider what happens after the post-pandemic boom.

The economy is already rebounding, and at a stronger pace than was expected. But it still has one arm tied behind its back with the remaining restrictions and lockdowns. Plus, with the indexes not far from all time highs, the market had likely risen as much as it was going to before the next phase of the recovery came into view.

After last week’s selloff in tech, this week has been relatively calm, though the action at mid-day today suggests we could see more selling before the closing bell.

As we near the end of the second week of 2021 and approach inauguration day, the market is barreling full steam ahead, seemingly unaware of the dung piles that are consistently thrown in its path.

Despite more grumblings out there about how “we are due for a pullback,” stocks continue to hold up. In fact, many growth stocks have done far better than that and are jumping higher on almost a daily basis.

The big developments over the last week have been the situation with the potential failure of Evergrande (Chinese property developer) and interest rates. As of mid-morning Thursday, we appear to be moving past these potential issues.

For some time I’ve felt that we should be bumping up the upper end of our market cap range since the market’s evolution, and rising share prices, has made for somewhat slim pickings for high growth names in the under $3 billion market cap range. That is the rough upper end that I’ve been holding to for many years.

The consensus opinion right now is that the market is strong because it’s looking favorably on the prospects of a clear-cut winner in the upcoming presidential election and that the likelihood of another round of stimulus is going up.

The market got off to a horrible week as stocks sold off Monday, but things have been a lot better since and the S&P 600 Small Cap Index is now back above where it closed last Wednesday (6% below all-time highs). Stepping back, we see that the broad small-cap index has been bouncing around since March without making any net new progress. But drilling down deeper we see many stocks (including several in our portfolio) acting well.

As coronavirus matters continue to dominate the headlines and the world works toward slowly reopening, the action of marijuana stocks continues to impress—and with good reason.

The good news is that the amount of cannabis intercepted along all U.S. borders has fallen by 89% since 2011, from 2.5 million pounds per year to about 270,000 pounds in 2019.

The good news is that one of our stocks, Trulieve (TCNNF), closed at a record high yesterday. The bad news is that none of our other stocks did. The sector as a whole remains in the moderate correction that began five weeks ago, and I continue to think that we are likely to see lower prices in the near future.

As financial markets begin to thaw, global leaders build consensus on how to address this pandemic, options of potential interim treatments for Covid-19 surface and the framework of economic relief starts to firm up (even though it won’t be enough), the stock market may be showing early signs of stability (a relative term).

In such an environment it’s easy to assume the worst and miss the flipside of the equation – great companies trading at prices that just a month ago we would have considered incredible. Market volatility and uncertainty are creating great opportunities.

The big news pertaining to global investing is the signing in Washington yesterday of the phase-one “truce” trade deal between America and China.

I’m making four changes to the portfolio today.