In Search of the Perfect Investment

Half my friends dumped all their stocks when Trump got elected. If I had anything to do with that, I apologize.

But those friends are now getting back in — as are many others — who don’t read my occasional “brilliances.”

All that suggests this market run will continue a little.

But — if you’re unsure — here’s some fodder. It comes from Robert Parker, CEO of Holborn Assets – Holistic Financial Planning Services, Dubai

Will stock market collapse during Trump’s presidency?

No one knows, but probably yes – there should be a big correction that can easily transform in a collapse.

Now, why would this reversal happen?

It’s because the market is cyclical and the stocks cannot go infinitely up or down.

If you can’t read the chart, click here. 

You can note the last 2 crashes – the dot com crisis in 1999 and the 2008 crisis.

So, as the stock indexes hit record after record, it’s time to see what bears have to say – and they are ready to short the whole stock bubble. It’s simply inevitable to experience correction that would eventually lead to a crash. The question is – when will it happen?

Finding the precise timing of the next downtrend is really difficult, but we can suppose that 4 years is enough for this to happen – so the Trump’s presidency can end with a stock crash – it’s very probable.

However, in the next few weeks and months, you will experience a stock market boom that was never seen before. The lower taxes, as Trump promised, will have an immense impact on stock prices, and, together with higher rates by Fed, they can lead Dow, S&P and NASDAQ to new records. But this will only represent a bubble expanding so that it could explode more loudly and with much destructive effects.

In fact, as of February 2017, Dow Jones and the other 2 US main indexes had an impressive rally – the indexes hit records for some days in a row.

However, some investors view the recent rally as a speculation of a near-term reversal with some fund managers comparing the present stock market euphoria to the dotcom bubble back in `99, which reached a peak on the last day of 1999 and then burst dramatically.

Keep this in mind – the current stock market boom is based on euphoria, bullish sentiment and much illusion – but these have always had a short-term lifespan! The bullish sentiment will get over-saturated and guess what will happen next? People will realize this bubble was built on euphoria and will short everything right and left. This is when the panic will start.

Keep in mind that during a bubble, people are crazy about positive news like tax cuts, but tend to ignore the bad news. But they will have their impact – even if no-one really cares about Trump’s trade policy, the weakening of the EU, and so on.

Robert Shiller created the cyclically adjusted price to earnings ratio, which shows how much the market is over-valued or under-valued. Well, today the market is highly over-valued. In fact it was over-valued higher than today only twice – before the Great Depression and right before the dot com bubble:

(Click on the chart if it’s too big for your screen.)

Already, reasons are being put forward for why Shiller’s metrics are not applicable to today’s market conditions. Whenever the words “it’s different this time” are uttered it is a sure sign of trouble ahead.

I hope this helps!

His article is here.

Who knew?

“Nobody knew that health care could be so complicated,” Mr. Trump told a group of the nation’s largest health insurers and governors, describing his struggle to replace Obamacare.

Governors of both parties demanded that the change not deprive anyone of coverage.

How does health care work in Sweden? I asked this question on Quora and got this answer:

Marcus Broberg, Born and raised in Sweden

All Swedes under the age of 18 get free health care. This includes everything from vaccines to brain surgery. Above the age of 18 you pay a heavily subsidized fee that depends on the county you live in. If your fees reach 1100sek during a 12 month period you get free health care for the rest of the 12 month period.

For adults being admitted to hospital is not included on the 1100 sek and well cost you 100sek per day. Ambulance is not covered anymore and well cost 400sek.

All numbers taken from my county of Södermanland and may differ if you are in another county.

I also checked. When I was in Sweden last summer, I asked everyone how they liked their government health care. They all said they loved it. All of them. Sweden spends about 9.6% of its GDP on health care. The U.S. spends around 17.5%. There’s 9 sek to each dollar. (Swedish health care is largely run by the local counties.)

Things to obsess on

+ You don’t drink enough water. Aches, pains and cramps improve with water.

+ Your web site is years old, and doesn’t contain contact information.

+ Don’t give anyone investment advice. You’ll be responsible. You’ll feel guilty. They won’t sell when you tell them to. Or, worse, you’ll forget to tell them that you sold.

+ Online brokerage is great. But not all are “user-friendly.” My least favorites are Schwab, Vanguard, and Interactive Brokers. My favorite is Fidelity. I understand how it works. And they keep improving it. If you give Fidelity money, they will give you free trades. But do the deal before you give them the money.

+ You can learn anything. And to do the job you just learn will only take five minutes — the second time.

The 5 Jobs Robots Will Take First

1 – Middle Management

2. Commodity Salespeople (Ad Sales, Supplies, etc.)

3. Report Writers, Journalists, Authors & Announcers

4. Accountants & Bookkeepers

5. Doctors

From a fascinating piece by Shelly Palmer, which you can read in full here.

Faith in American capitalism.

A local supermarket here in Palm Desert, California called Albertsons did well on Valentine’s Day with ..

.

But my all-time favorite Valentine’s Day gift was this $21.99 item.

I actually saw someone buy this.

The Consultant

A struggling restaurant hires a consultant. She spent several days with the employees. The next week they decided to try out her suggestions.

As a waiter approached a customer’s table, the customer observed that all of the employees had spoons in their pockets. He inquired why of his waiter. The young man explained that they had learned from their consultant that spoons were the most common utensil dropped by the average restaurant diner. By carrying a spare spoon, the employees could immediately replace the dropped utensil. This improved the restaurant’s efficiency by 1.9% because the employee did not have go out of their way and make a special trip to the kitchen to get a customer a replacement spoon.

The satisfied customer then commented that he also noticed that all of the males had a string hanging out of their closed pants fly. The waiter explained that, again, the consultant observed that if they tied a string to their penis, they could use it when they went to the bathroom to remove their penis to pee without touching it. Therefore, they could achieve a 1.9 % increase in their efficiency by not having to wash their hands afterward. The customer thought about it and then asked the waiter how he got his penis back into his pants when finished.

The waiter said that he didn’t know about the others, but he used his spoon.

Glad to hear you are ok…I was getting worried.

Harry Newton,

This is granddaughter Eleanor, age 3, celebrating her aunt and uncle’s birthday. There’s no reason for me to publish this photo, except (I think) it’s gorgeous.