In Is Good. Out Is Good. Too Much Leads To Blindness.

 

investing, v. the act of, by individual or entity, involving, incorporating, or committing, wealth, in the hope of return, plus profit: the act/documented symptoms of, often include, but are not limited to: “night fever,,”  loss of consciousness, high brokerage fees, oily discharge, sleep driving, black-out “Buy” orders.

 

 

Graphic, Cover, walk
A new and “kicky” market, with slowing growth, a rate bump or three, and flashy tariff tidbits out of Washington, where these shoes might sell.

 

DOES BEING AN “INVESTOR” MEAN BEING IN-ALL THE TIME?  OCTOBER SCARED MANY OUT, WHILE MANY STAYED BUT CUT EXPOSURE.  MARKETS CHANGE.  OURS HAS.  DO ANYONE KNOW FULLY HOW MUCH?  THERE ARE TWO, OR MANY, SIDES TO EVERY MARKET.  IN CAN BE GOOD.  CHANGE CAN BE GOOD.  OUT CAN BE GOOD, EVEN MORE WHEN NO CLEAR “BOTTOM” HAS FORMED.

 

IN

Talking to distracted people.   I listened.

“Up–down, in–out, east–west, I don’t know what to think,” he spins.

“Our new fed chair just told us what to think–he’s listening,” I say.

“He’s a maniac–” he waves a phone photo.

I lean and bob for any kind of look.  “I can’t really spot J. Powell in that snap,” I straighten.

 

 

portrait-3094042_1920
Things change.  Your new son-in-law?

“Huh?”  His phone flies about.  “I’m talking about my possible son-in-law.  It’s impossible to concentrate under these circumstances.”

“Tariffs you mean?”  I attempt to clarify.

“What?” he swivels.  His face and speech both pinch into an affected voice.  That’s when I spot the shoes:

“I need a new walker.  I can’t go up and down the stairs to the bathroom anymore.”  He elevates an open palm.  His phone finally stops moving.  I get a half-look.  What?

young-woman-2462252_1920
“She can’t get up and down the stairs anymore?”

 

“What’s wrong with her old walker?” I ask.  “And why is she using the stairs anyway?  The elevator’s right in between.”

He looks back down at the picture in his palm and waves. “Nono, that’s my daughter.” 

I shrug, not completely comprehending. “This market needs a walker too.”

“What?” he spits, glancing down amazed at what appears to be in hand.  “That’s my daughter.”

And there it was–right in the palm of the hand.  Craziness in the equity market can refine our sense of capital preservation verses capital appreciation.  Keep your hand raised if you said “no brainer.”

One.  Regardless of the name given, any “correction” hurts.

Most long-term investors do not attempt to dodge downturns.  Rather, they “ride them out.”  The LT mantra is “markets always bounce back–historically.”  In general, research supports this strategy.  Nonetheless, holding on proved extremely costly in ’08-’09.  Think Katrina.

 

 

OUT

The hiss of rank market instability, and a corporate debt bomb.

 

bomb-154456_1280
Cheap money leads to elevated corporate debt. Does anyone really think all companies will manage well? Leaders will, laggards won’t. Listen for the hiss of corporate debt bombs.

 

 

How much have you heard lately concerning corporate leverage?  Cheap money leads to higher levels of corporate debt.  In fact, failing to make use of free money is foolish, and negligent on the corporate level.  Now the servicing of that collected debt becomes an issue.

 

Corporate debt levels are elevated, some say dangerously so.  No doubt many failed to construct and implement a de-leveraging plan.  How many worked in higher rates?

 

 

“No one knows who’s swimming naked until the tide goes out.”–Warren Buffet.  Now is that time.

 

When equities re-price opportunities emerge.  Now is also that time.  Yet everything exists in a context.  Ours is volatile for stocks.  When markets shake, everything inside moves, lower.  Is all that truly over for now?  Precisely–who knows.  So, buy bargains now or no?  What context are you willing to risk?  This one?

 

 

You call that a trend?

YEAH WE DO, A TREND BREAK, DOWN.
11-30-18, $SPX.
Chart, $SPX, 11-30-18
When the trend breaks; plunging price action, pending “Death Cross”(50EMA crossing the 200), long-term support violated twice, failed rally looking to repeat, and more

 

 

What do we want?  Some follow-through.  We want some consecutive days of positive price action, on elevated volume.  Price volatility often leads to even greater volatility.  Stability can breed more stability.  Cheap is good.  But we’ll pay a bit more for a dash of trending.

 

$SPX,12-03-18, 6:13AM.
Chart, $SPX , 12-03
The current picture. It’s decision time. Up or down, or into a soul-crushing “consolidation?” Hang it out to dry, and scan for bargains.

Thanks for Reading.

water-2STOCKjAW.COM

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Additional resources:

Investopedia.com.  Seriously Wonderful.  Fact.
http://www.investopedia.com/
Charles Schwab.  In Our Opinion, the best broker going.
https://www.schwab.com/public/schwab/client_home
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Be careful.  Do the work.  Have patience, with yourself.  Never put your dreams away.

 

STOCKjAW

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