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Day 16: The New New Normal?

Where do I start with a day like today? I think these are the days when the average investor just says..."WTF" and turns everything to cash regardless of the losses. Just as we were getting used to The Twitter Trade we get thrown a curve ball, no governing by tweet, no governing by press conference, just a blitzkrieg in congress to move forward on changing national healthcare without any notification or public discourse. So let's see, how should the markets respond to something they've collectively never seen before? I'm a pragmatic person so I think it was perfectly reasonable to freak out! It was perfectly reasonable for the DOW to jump off a cliff, free fall 155 points and bounce off the floor to settle down 63.28 points. If this were a video blog you'd know that I'm being sarcastic. I don't think any of this behavior is reasonable, by either the president elect or investors. While I'm all for action, Congress and President Elect Trump knew full well that what they did would have adverse effects on the markets and I'm offended by that because it has a negative effect on pension funds, retirement accounts, college savings accounts, 401K's and the general financial security of millions of everyday people. My three daughters who are relying on invested accounts to pay for their college expenses were hit hard today; not because of a fundamental break down in the financial system, not because the companies in their portfolios turned in bad earnings, but solely because of an irresponsible act.

As investors we hold the power to to take that power away from Mr. Trump and anyone else for that matter. Ignore it, it's noise. Nothing collapsed, nothing failed, nothing actually changed. Those companies we're all invested in that tanked today are all still in business working toward their goals, paying their employees, providing healthcare and doing their part to grow the economy. The sooner we all stop buying and selling on a Tweet the sooner he has to holster his weapon because it's useless.

So that's what I did. The over night activity by our politicians got me thinking and checking quickly on the status of all the companies I had on time out. My thesis hasn't changed on any of them, the outlook for the next 12 months is still great. But the prices had dropped and I couldn't ignore the opportunity. Imagine going to a Land Rover dealer and all the Range Rovers were on sale for a fraction of their actual worth.

I put together buy orders for every stock on time out and launched the orders at the open. I'm now out of cash and have a very full portfolio. I normally would never use all my cash, I always hold cash to take advantage of opportunities, but this portfolio is different. The whole point of this project is to buy and hold a group of stocks for one year and see if we can do better than the professionals and save all those fees. This is it, we're riding this lot until the end of the year.

Stay Invested

Clay Baker

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