Are stocks going up or down?
I have no idea.
When Gerry and I ran our publishing business, we knew all the “gotchas” and what to do when times were rough, when times were good, when we needed to boost sales, when we needed to reduce expenses. We even knew how to be nice to customers. (Gerry was better at that than I was.)
In short, we could control our own destiny.
Not so, today. I’m semi-retired. My “business” now is managing my money — the money I got from selling the business.
I have much of it in listed equities — over which I have absolutely no control.
Discussion of P/E ratios, liquidity, growth, etc are for another day. They don’t have the meaning they used to.,
Having little control over my success as an investor is the part that annoys the heck out of me.
I could buy a bucketful of index funds — knowing that long-term, they earn more than, say, bonds — and I could live on a desert island with no Internet.
But my brain says I can do better — if my emotions can take the stress. (Questionable.)
Right now my stress is high. Look at this chart. That’s me.
I once was trained as an economist. Everything I see today points to a increasingly lousy economy. I’ve written all the reasons in recent blogs. I also am aware that the recent selling in stocks is due to four factors:
+ Tax loss selling. Take some losses. Save on 2018 taxes.
+ Hedge fund exiting. Many hedge funds give their investors only one time a year to pull their money. Now is that time.
+ The algos. 70% of each day’s trading is from machines programmed to exacerbate stock price trends.
+ The China Trade War.
Today we’re going up because Trump tweeted something positive (and vague).
A growing number of economists and other experts agree with me that what’s happening with business uncertainty, trade wars, Europe, higher interest rates, etc. is going to slow things down and bring stock prices further down. Maybe.
Business Insider has a piece:
The struggling stock market is facing 6 main problems – and one expert says a crash is the only thing that can resolve them
The expert is Jim Paulsen, the chief investment officer of Leuthold Group, who explains why an equity bear market may be the only way to resolve the six main issues facing stocks.
Paulsen’s six points are :
1. Stretches valuations
2. Economy at full employment
3. Federal Reserve monetary tightening
4. Low intra-market correlations
5. Volatility is too low right now
6. Plunging profit expectations
You can read the piece here
On a site called (of all things) HouseSavingsTips. com, I found this improbable article:
70% Stock Market Crash to Strike December 28th, Economist Warns
Several noted economists and distinguished investors are warning of a stock market crash.
For example, former budget director for the Reagan White House, David Stockman recently raised a red flag when he declared an economic collapse is imminent. He went on to say: “There surely is a doozy just around the bend.”
Scott Minerd, Chairman of Investments and Global Chief Investment Officer of Guggenheim Partners, warns: “The markets are potentially on a collision course for disaster . once we reach a peak we’ll probably see a 40% retracement in equities.”
Paul Tudor Jones, the famed hedge fund manager and founder of The Tudor Group, is credited for calling the October 1987 market crash, now says that while “we have the strongest economy in 40 years . it is unsustainable.”
And John Hussman, President of Hussman Investment Trust, says that when the market crashes we can expect “a market loss on the order of 60%.”
But there is one distinct warning that should send chills down your spine . that of famed economist Ted Bauman. Bauman and his team correctly predicted the collapse of 1999 and 2007. (I don’t know if that’s true. — Harry)
Bauman now warns: “There are three key economic indicators screaming SELL. They don’t imply that a 70% collapse is looming, it’s already at our doorstep.”
Bauman is using this pitch to pitch his newsletter and reports. Hence, you got to be wary. But he does have lots and lots of cute charts and a persuasive video — not dissimilar to the ones selling dietary supplements.
Recognize that if all the newsletter writers knew what they were doing, they would be doing it, not writing or videoing about it.
I’m the exception since I don’t charge for this “newsletter.” All my stock recommendations (i.e. my holdings) are doing well today. The one exception is my one short — GM — which is rising, when it should be falling.
In short, for control and peace of mind. In order:
- Your own business.
- Bonds.
- Equity indexes.
- Individual equities.
Where did all the boxes come from? Today’s visual quiz:
Outside an apartment building last night, on the way home from the theater last night:
In our apartment lobby. Grandchildren Christmas presents, ready for the big day.
Only possible conclusion: Amazon is having one bang-up Christmas.
Here’s Amazon this year, with its 200-day moving average in red.
Here’s this morning’s CNBC story.
Read the full story here.
Amazon remains my largest holding. Second is Berkshire Hathaway. In my main account, I’m 60% in cash.
Every wondered where the Amazon swoosh came from?
It tells you Amazon sells everything from A through Z.
Neat?
Don’t Do Stupid, again
The 17 Most Common Injuries During the Winter Months
Once the snow falls, you’re more likely to, too.
From Best Life magazine, the injuries include:
+ Broken bones from slippery snow.
+ Falling off ladders hanging Christmas tree decorations.
+ Knife cuts from chopping all the holiday food you don’t need.
+ Muscle strains from shoveling snow.
+ Concussions from sledding.
+ Head cuts from falling icicles.
You can read the rest here.
A wonderful story
The bride’s father died ten years ago and his heart was donated.
The man who received the transplant walked the bride down the aisle.
Why do I think this is funny?
Harry Newton, who played two and a half hours of singles tennis in the last 24 hours and couldn’t feel better.
Please keep moving. The more you move, the less you sit, the longer you’ll live. Trust me. I’m still alive.
I can guarantee you absolutely 50% less stress Harry…simple, give me 50% of your money…I will put it in the bank and not worry about it for one minute…guaranteed…50%less stress effective immediately! I would have no worries either since WAS your money! I would insert a smiley here but can’t!