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The uncertainty is killing. The agita is severe. Buy Tums?

The uncertainty is killing. One day it’s a “War.” The next day Trump says it’s a “squabble.”

The economists tell us tariffs will hurt our economy minimally — by less than half of one per cent. But they can’t measure, or guess the businesses that won’t be started, the products that won’t be introduced or the losses in stock values, and hence the products and services that won’t be bought. There are houses and apartment that won’t be built and bought. There are jobs that will be lost, or never created.

Conventional wisdom: Tariffs are a way to protect and boost local industry, to bring back jobs. It insane. Who in the United States wants to spend their days gluing soles onto sneakers? Millions and millions of sneakers.

Tariffs are a disaster. From Wikipedia:

The Tariff Act of 1930, commonly known as the Smoot-Hawley Tariff or Hawley-Smoot Tariff, was an Act implementing protectionist trade policies sponsored by Senator Reed Smoot and Representative Willis C. Hawley and was signed into law on June 17, 1930. The act raised U.S. tariffs on over 20,000 imported goods.

The tariffs under the act were the second-highest in the United States in 100 years, exceeded by a small margin by the Tariff of 1828. The Act and following retaliatory tariffs by America’s trading partners were major factors of the reduction of American exports and imports by more than half during the Depression. Although economists disagree by how much, the consensus view among economists and economic historians is that “The passage of the Smoot-Hawley Tariff exacerbated the Great Depression.”

The worst part of our present Trade Wars is that the War is being solely managed by one man — most of whose early businesses failed and “wants to rip the face off the Chinese” (as one of his supporters explained to me.)

He hasn’t explained to us — the owners, the buyers and the sellers of stocks and real estate — what “victory” in this Trade War actually is. A nice detailed speech form the Oval Office would help. Nothing so far. What we get are midnight tweets and helicopter snippets. Some out of anger. Some out of fear for the stockmarket. All off the cuff, and seldom with much thought.

If I had run my business with so little guidance for my employees, my customers and my bankers, my business would have gone broke instantly, if not sooner.

Higher tariffs on Chinese goods are a bad idea for everyone. For one, we pay, not them. The billions piling up in the U.S. Treasury are taxes on the American public. American farmers, Boeing, Apple, Nike and others with a presence in China see the tariffs as burdens, not blessings.

Cramer says this market is influenced by tariffs and trade talks — with the Federal Reserve and the economy playing second fiddle.

Here’s the last ten days on the Dow. Not a pretty site. Not good for your agita. The trend is down, the gyrations stomach-churning.

But …

Hold your nose. Have faith in American companies long-term. Don’t panic when the market drops hundreds of points one day. Pray it will pick it up the following day. Put ultra-low limit buy orders on your favorite stocks. Maybe you’ll snag some? For God’s sake, don’t chase stocks when they’re rising.

In this market, stocks go in and out of favor very fast. When they spike — because of hot talk on BubbleVision or in Barrons, or wherever, dump them. Square spiked to $100. Amazon hit $2050. Today they’re much lower.

I like long-term holding. I’m in this for the long-term. But these are volatile markets controlled by late night tweets. I can’t apply Benjamin Graham value Analysis to this insanity.

How would you like to be a German maker of cars. Soon your cars in the U.S. may cost 25% — thousands more. How many fewer cars will you sell? How many people will you fire to keep your debt payments current? How will your ex-employees keep their debt payments current?

Let’s say you make shoes. How would you like to wake up one day and see this on BubbleVision:

Meantime, we like tech stocks — especially those playing in the cloud where marginal costs are low and the service addictive.

I’m looking at potential new holdings in Trade Desk, Znga and Zscaler. Stocks like Twilio (TWLO), ServiceNow (NOW) and Salesforce (CRM) (which I own) appeal, but are in nosebleed territory.

Ladder Financial, a REIT I’m close to, now yields over 8%. That’s cash on cash of over 8%!

I’d loosen a little up on Apple. Eventually it’s going to lose its monopoly over apps on its iPhone and the 30% commission it gets from sales of those apps will ebb. he Supreme Court has agreed to hear a class action suit against Apple. This is serious.

By contrast, Android apps are available for download on countless web sites. There also are college courses where students learn how to write Android apps, which they install on their Android devices.

Android phones outsell Apple phones by a huge margin. Google gives the Android operating system away for free. Makers like Samsung install it and modify it to their likes.

Look what I just received. 

I’ve never used Lyft. I can’t get the app to work on my iPhone. I don’t know why.

Uber’s app does work. And their service is great.

Looks like Uber is bouncing back from its low of $36.08. Someone is buying it — just not me.

Real estate syndications are doing amazingly well

Buy or develop a multi-family property. Get it stabilized — meaning fully rented and in good physical shape — there are people who crave the solid return of predictable residential real estate.

I am going into one development deal. The syndicator told my friend not to place it with anyone in the eighties. I said I wasn’t 80, yet.

Ed Sonderling responded, with a twinkle in his eye, “I’m not going to rush you.”

Favorite silly (but amusing) cartoons

Harry Newton, who’s visiting Boston for Grandparents Day. Then on Saturday I take Sophie to Cinderella, a ballet, and after that to an ice cream shop where she will gorge on chocolate-dipped ice cream that her mother wouldn’t dare feed her.

By the way, watch out for emailed “rewards” for filing in surveys and buying from Amazon. Those emails contain malware, which you don’t want. I suspect Sophie’s mother, my darling daughter Claire, may refer to the ice cream I’m going to feed her daughter, as “malware.” But Sophie (and I) think it’s delicious. This is Sophie at Dairy Queen, also called DQ and now owned by Berkshire Hathaway, whose shares have recently been giving volatility a whole new meaning.

The chean-up job on Sophie is not insignificant.

 

  • Mark Shark

    Hey Harriet or is it Really Harry?
    I see…still using those aliases talking to yourself (comments). Interesting pros and cons regarding Trump . You must have a double personality . I’d love to be your shrink. By the way, wasn’t your past quote, “Don’t catch falling knives”?!!!
    What a moron and you went to Harvard? Ahhahahahaha

    • June

      Anymore of Harry’s comments about Trump and this blog could become a RIOT

      • tommy

        I see Mike Nash, excuse me, I mean harry the kangaroo strikes again censoring his own personal comment board. A phony website anyway. What kind of marriage he must have. Are the grandkids fake too?

    • Mike Nash

      Screw you, dumb, stupid, racist Trump supporter. Who said Harry went to Harvard, you moron. He’s from Austria.

      • harrynewton

        He went to Harvard. And he’s from Australia. They don’t have kangaroos in Austria. They do in Australia.

  • Mike Nash

    Harry, I’m glad to see you unload on Trump finally. His tweets and making bad decision after bad decision. However, we also need to get after the people who still support him. His only remaining supporters I’d assume are white supremacists and people who lost their jobs to Mexicans. Also abortion nuts, like those in Alabama who voted to keep abortion legal even in cases of rape and incest. These people, some evangelical and others KKK members, now form Trump’s base. There’s never been anything like this before in American history. Trump is 20 times worse than Richard Nixon. At least when it was proven that Nixon was a crook Republicans left his side. The more corrupt Trump is revealed to be the more Republicans in congress rally around him. It’s insanity. Joe Biden will rescue us of course but how much more damage will be done by January 2021 when Biden takes over? By then the economy could easily be in a depression and we could be waging wars vs. Iran and North Korea. Trump’s supporters are racist mad men.

    • PhillyGuy

      I’m pretty sure this is the most ignorant idiotic misguided comment I’ve ever read. Maybe it’s a sarcastic comment, or maybe you’re drinking while commenting?? Biden is as crooked as the rest of them – Trump for all his warts is at least standing up to China, unlike Obama who bowed down to them and allowed the Chinese to steal and pillage the US. If you are the typical lefty liberal , you’re gonna be crying in 2020 when Trump wins again because the Dims only care about spewing hate.

      • Mike Nash

        You’re obviously a KKK member. Were you at Charlottesville? Go to hell, white supremacist!! FYI: polls show Biden beating Trump’s azz by 10-15 points!!!

  • Tom from CA

    Harry I rarely disagree with you but your analysis of the trade imbalance with China is way too simplistic. You totally gloss over the elephant in the room: the reason there is a trade imbalance is because the cost of doing business in China is far lower than similar industry in USA (if even that industry still exists). Why? I’m sure you can think of several reasons, but here’s one: basic environmental laws and regulations. What air would you rather breathe every day Harry, New York air or Beijing air? What air would you want your grandkids to breathe? Even NY on its worst day is better than Beijing on its best day. How does all this extra pollution help with the Left’s favorite crisis: “climate change”? Where are all the pols clamoring for a Chinese Green New Deal? Ok let’s make that cheap stuff in China because who gives a crap about Chinese people, they’re foreigners – but somehow we care about the millions of foreigners crossing the southern border?

    • PhillyGuy

      Harry – i think you are glossing over 1) the tariffs that China already places on US goods. Have you checked out the tariffs that were in place before the recent tariff “negotiations” – China had a 25% tariff on US vehicles , funny, thats the same % you noted in your article regarding German cars that you said were so terrible. 2) China is one of the largest producers of counterfiet goods in the world, which cost US companies billions and 3) China steal IP and ignores patents.

      Trump has many warts but at least he is not bowing before the Chinese and letting them continue to roll over the US.