spam hole;, n.,(coined by Dr. Sabine Feline); a hole in the equity markets resulting in lower prices; usually triggered by reckless, ego-rooted, Fed talk; any spontaneous, Fed-created downturn, ie. hole, in equity markets through which vast wealth is permanently vented directly into a void; any such needlessly created breach in otherwise sound wealth containment or growth vehicles; any mindlessly uncorked thus hemorrhaging market. Google search
STOCKS ARE NOT CREATED EQUAL. MARKETS ARE NOT FOREVER. BOTH STOCKS AND MARKETS EVOLVE. IS YOUR PORTFOLIO KEEPING UP? A ONCE EXTREMELY ACCOMMODATING FEDERAL RESERVE IS NOW BOTH RAISING RATES AND FLATLY STATING THE INTENT TO CONTINUE RAISING EVEN TO THE POINT OF “OVER-SHOOTING.” OOPS.
INFLATION IS REAL, YET LOW. FULL EMPLOYMENT’S GOOD–THE LOWER THE BETTER, RIGHT? THAT’S WHEN WE HEAR; A 3.75% UNEMPLOYMENT RATE WILL ONLY LEAD TO WAGE INFLATION–SO THE STORY GOES. 4% WAGE INFLATION MAY HAPPEN, ALONG WITH A 4% YIELD ON THE 10 YEAR. BUT ISN’T THE REAL DEBATE GROWTH VS. VALUE? EVERYDAY MONEY MANAGERS BEMOAN VALUATIONS. THAT’S NOT NEW, BUT THE NUMBER MOANING NOW IS.
SUSPICIONS HAVE IT THAT MANY OF THESE ARE THE VERY MANAGERS WHO FOR TWO DECADES WARNED OF THE EVILS OF AMAZON’S OBSCENE P/E. FACT; ONE COULD REVERSE THE CLOCK TEN YEARS, POINT A RULER AT THE SKY, CLARIFY THAT THIS WILL BE AMZN’S CHART FOR THE NEXT TEN YEARS, AND THESE MANAGERS STILL WOULDN’T BUY. AS A WHOLE MARKET VALUATIONS HAVE BEEN ELEVATED. NOW LESS SO. YET AMZN WAS NEVER A QUESTION AS A PRIME PORTFOLIO HOLD, OR EVEN BUY. SIZE DOES MATTER, EVEN MORE WHEN TIMES GROW TOUGH, MESSY, AND UNCERTAIN.
1. Own only the best. Just surviving’s playing not to lose. Return fire. Play to win. STOCKjAW Choice:
2. The fed is in-part a club, jealous of it’s independence, and operating on “top down” analysis inadequate in judging true micro/macro strength. “
Earnings season has thus far been a “beat and raise,” or be beaten affair. Dip buying is madness, while guidance is king. If your companies’ guidance points flat, or down, that’s where your share price is headed. The good are beaten along with the bad.
No benefit of the doubt is extended. Powell’s comment concerning “over-shooting” provides no stabilizing help in an environment already plagued by swooping trade war fears. Fed chairs should know, and behave, better.
3. Get a domestic dividend play. Example–Verizon(VZ).
These are the days diversification pays. Dividends are a drag until you need them. Defensive positioning is a drag when the bull is roaring. This bull is not roaring. All momentum has been dissipated.
For STOCKjAW, growth remains the focus. Yet we continue to evaluate core holdings with an eye toward more resilient holdings–again, such as Verizon, or United Health(UNH), a long time hold for us.
4. Maintain a tight technical focus on the indexes.
Of course–seems obvious. The S&P 500 technicals provide leading indicators concerning the strength and direction of individual equities. Investors have multiple leading indicators: non-farm payroll #, the VIX, put/call ratios, short interest, GDP, and general price-action/market volatility, to name a few.
Technical analysis offers on-going insight to investors concerning the strength of each individual holding. Tracking the S&P 500 directly, provides our read of the health of the market as a whole. Both cyclical and secular stocks are dramatically affected by rising rates, and slowing economic activity. Leading technical indicators often provide the first glimpse of substantial market change.
Our new focus includes watching points of support and resistance, and any violations of said. Although technical indicators are often inconclusive, each nonetheless provides clues, if not early warnings, concerning the type of market our holdings are navigating.