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Another small opportunity today, as shares bounce

Until you sell the shares you’re still holding, you haven’t lost money.

What you sell and what you hold is a function of what cash you’re going to need and your comfort level.

Most of our stocks will come back — but, meantime, they will go lower. We have not reached bottom. The economy is grinding to a halt. We are in a recession.

Assess each company you own. How its stock is moving today should give you a good indication of its vulnerability. Ask yourself how will my company bring in enough revenue to keep the doors open. If you own companies relying on rent from other companies, you may wish to dump them. I have sold completely out of  LADR.

Look at how much you’re down on some stocks you own. If you’re losing over 20% on a stock you should consider selling it.

Washington is cranking up another stimulus package, including help to the airlines and the newly-unemployed. But stock markets remain in major panic. Corporate “earnings” will be awful.

We are in a recession now. We will be in recession in 2021. No economist on Wall Street is predicting a recession for 2021 — but their job is to provide public relations succor to their company’s clients. Get them to pay their bills and their interest payments. When you see CNBC talking about “commercial paper,” loans and mortgages and bank deposits and withdrawals are what they’re talking about. It’s a huge daily balancing act. The Fed Reserve is trying to patch the cracks as they emerge.

Some companies are doing well out of this — TDOC, DOCU, and ZM. But the “big” money is being made by shorting obvious stocks — BA, energy stocks, airlines, retailers, etc. I have Boeing and Exxon shorts but I didn’t short the airlines, other energy stocks or the retailers. I simply avoided owning them. It’s really hard to switch one’s thinking around from the glorious future of scaleable cloud stocks into the depressing world of energy, retailing and airlines.

Several people are buying the SPXU — the triple S&P 500 short. This is not a good idea. Unless you play it during the day and get out by evening. There are “gotchas” in these things that don’t work overnight. Something about them being “re-set” every evening.

You don’t want to own cannabis, bitcoin or gold.

Right now — 11:30 AM — the Dow has turned positive again.

To put things into some sort of perspective, here’s a chart of the S&P500 over the past ten years. You can see we’re back to the lows of December 2018, which we recovered from early 2019 and gave us that wonderful year 2019.

But during those recovery days of 2019, businesses were open and serving customers. Employees came to work.

We’re now in a different world. When you work from home, figure a 50% reduction in productivity. Figure a total lack of interest in buying anything — except supplies from Amazon and some food from your local grocer. Remember 70% of our economy is the consumer. Roughly a quarter of working Americans don’t have paid sick leave, according to the Bureau of Labor Statistics. And many Americans live from paycheck to paycheck, with limited savings. Low-income Americans are at real risk.

The BIG health problem is the fact that some people who have Covid-19 will require being hooked to a ventilator. There’s a huge nationwide shortage of them. That’s why they’re trying “to flatten the curve” – to save the doctors from making decision as to who should die and who should be saved. I’m guessing a company like Cisco could gear up to make them — like the war effort to convert car factories into tank factories. But, the Administration isn’t there yet. It should be. Here’s what a ventilator looks like. A complex piece of equipment.

They shove a breathing tube down your throat and another one through your nose to your stomach to feed you since you can’t eat while the ventilator breathing tube is in place. It’s not pleasant. In fact, I hear it’s downright scary.

How bad are things? Look at this ten-year chart of America’s biggest exporter, Boeing:

Who are these idiots?


They lecture us on “social distancing.” We should stay six feet from each other. Look at them. Huddled together like a rugby scrum. They couldn’t have picked better positioning for maximum coronavirus transmission. Dr Fauci is huddled in there also. I thought he knew better. I plucked these photos off the White House web site. Morons.

What we are facing

  + The White House is clueless. It cares far less about us than adulating our president. And he cares only about being re-elected.

  + Even Fauci is far too optimistic. He should have convinced the White House to put the country on a war footing. His guidelines have been watered down by Trump. They need to be strengthened and made mandatory. We are in a War. Our nation’s resources should be directed 100% to solving it. If that means getting out the Army to enforce the rules, so be it.

  + We are in a recession. It will only get worse. No one is buying. There is no commerce, except food and cleaning supplies (f you can find them).

  + Things will happen that we never dreamed about — even in our wildest imagination. What happens if the Internet breaks under the strain and you can’t buy anything with your credit cards. Do you have enough cash? I bet you don’t. What happens if you can’t work from home?

  + Cloistered at home is very scary. Watching depressing TV. Reading depressing web sites. There will be broken marriages, broken relationships and suicides. People will die from drug overdoses. Please don’t snap.

  + There is some good news. The Fed Reserve is stepping up. And our state governors are taking over. New York’s Andrew Cuomo and Washington State’s Jay Inslee are giving us sound reliable information that Washington isn’t. Cuomo and Inslee make us feel that someone intelligent is in charge. I recommend you watch the Rachel Maddow Show each evening on MSNBC at 9 PM ET. She picks her guests for their knowledge, not for their politics. Her stuff is well-researched.

P.S. If you’re having trouble with DirecTV, your online broker, your Internet, or your computer, send me an email. Perhaps I can help, and save you the two hours I was on hold last night with DirecTV (now owned by and mismanaged by AT&T).

See you tomorrow. — Harry Newton

  • AR

    The opportunities to become rich off this market are incredible. But it will be all or nothing.

  • Dman

    Harry…..would you like to bet me 10K that Obama’s birth certificate is completely false?

    …….you remember that big lie Trump told?……LOLOLOL!!!!

    Obama was born in Kenya……and everybody knows it.

    Harry you can say bye-bye Sotomayor and Kagan.

    Q

  • Dman

    Harry…..what do Ed Buck, Harvey Weinstein, Jeffery Epstein and Michelle Obama all have in common?

    ……all 4 are male sexual predators…..and democrats too.

    Q

  • Dman

    Joe “FUCKING” Biden……….you’re kidding right?

    LOLOLOLOLOL!!!!!!!!

    Q

  • Dman

    Thanks for showing us your vicious evil satanic liberal democrat fangs Harry.

    Harry I guess you might have heard about the recently deployed 25,000 US soldiers stationed in and around Berlin Germany?

    Why? To protect the German people.

    Q

  • Dman

    LOLOLOLOLOLOLOL!!!!!!!!!!!

    The Great Awakening
    Trust The Plan
    Future Proves Past
    WWG1WGA
    Q

  • Mark

    Hey Harry. What’s it like monitoring your site 24/7 deleting credible comments. It’s got to be a lonely life and cutting into your extra curricula’s. Oh I forgot we’re in crisis so you can’t do much but spam.

  • TQ simi

    Harry, I value your wisdom, advise pertaining to the markets and some of life lessons also having a sense of humor even through tough times. By the way in certain countries people born on or before 1955 with this virus are not a priority so for those thinking the Covid-19 is in the basement playing Gin Rummy with Jared while we season citizen die off,… well “so grows the rose as my Dad would say.

  • Mike Nash

    Will you please give Trump a chance to fix this? THe man has never failed at anything he set his mind to. I agree the initial response was slightly lacking but he’s focused now. TRump, Pence and Jared Kushner are our go-to guys who will solve this. I’ll bet that Jared is in the basement working on a vaccine right now.

    • harrynewton

      Jared in the basement working on a vaccine. Sure.

      • Dman

        Yea I agree. Currently Jared is busy running Saudi Arabia.

        How many Saudi VIP’s did Jared have arrested on Monday? I believe it was 289. I guess you didn’t see Rachel Maddow report on that little factoid.

        ……thanks Jared, thanks President Trump.

        Q

  • Len

    Harry, great observation about everyone huddling around 45. Do what I say and not what I do??

  • Mike Nash

    Donald J Trump is our greatest president! Coronavirus is a HOAX by mainstream media.If it was real don’t you think you’d know one person who has it? It’s a fraud started by CNN to help Biden win election. Go out and eat at a nice restaurant tonight then catch a movie or attend a party.

  • Omer Acikel

    We might be in recession, we may find out down the road, as we never know when we are in one as it happens. I don’t like the prediction of it as it is just that right now … a prediction. But once COVID19 is under control, it will be harder to figure out how well whole world economy recovers from it since some damage is done already but I am very curious to see how fast we, as whole world, will recover from it.

    • lax dpole

      Put me on record that the reactive cure will have proven far worse than the ill. Feel free to disagree but only time will tell

  • harrynewton

    I don’t any longer.

    • lax dpole

      My Apologies, I just read your comments in today’s newsletter

    • Dman

      Harry, I’m suspicious, was someone talking to you and then dropped some truth bombs? It’s all true Harry. President Donald Trump is going to deposit you filthy evil satanic dem party into the “trash-bin-of-history.”

      …….and there isn’t a dam thing you can do to stop it.

      …….I wonder when suicide weekend will arrive?

      Q

  • lax dpole

    Harry do you still like Ladder Capital going forward? Any idea why it has tanked so much? I have a decent amount, wondering whether to add to it

    • Omer Acikel

      I was wondering about it as well. It looks awful. I have not seen any bad news to cause such big drop. But LADR is not on his list of holdings.

      • lax dpole

        Ladder was on the list til the other day. Wish we had just a bit more heads up