What Can Anyone Say?
“My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?.”
- President Donald Trump
Our blog portfolio continues to perform well and volatility in the portfolio remains low vs the overall market. Year-To-Date the portfolio is up +16.26%. Our benchmark index, the S&P 500 is up 13.57% YTD.
What Can Anyone Say?
Yesterday I was an aggressive buyer on a downturn that was unwarranted. Of course there was no way of knowing that a series of tweets would suck 2.95% out of the S&P 500 and 623+ points off the DOW.
To say I was stunned by today's comments is an understatement, but I am even more astonished by the reaction to the comments by investors. Let's parse this out:
The President called a sitting Federal Reserve Chairman a greater enemy than the President of China; a man he has called his good friend.
The Federal Reserves annual meeting in Jackson Hole this week is not a policy meeting, nothing new on rates is ever expected from Jackson Hole. Broad concepts and ideas about monetary policy is usually what we look for.
To say the FED did nothing, is to misunderstand the purpose of the meeting.
To be angry that the Fed "speaks without knowing or asking what I'm doing" strips the Federal Reserve of their independent status; one of the most important strengths of the US monetary system is fed independence.
Fentanyl is a huge problem in the US. However the deaths last year were 32,000, not 100,000 Americans a year.
While China does produce a large amount of the ingredients in Fentanyl, the majority of the drug arrives in the US via Mexico. BTW, the CDC reports on this on their web site every month, its easy information to access.
The President verbally ordered US companies to take their operations out of China. Not only does the President have no authority to do this, it's logistically impossible. Furthermore, China business represents 15% of global GDP, I don't think a so called "business friendly" President is actually going to tamper with that...but now nothing surprises me.
With 80% of the markets volume driven by arrhythmical trading platforms, bad news creates selling, which creates more selling. While this is also true during rally's, the effect of negative news seems to be stronger with the algos. Since its Friday and I usually wait a couple of days before making buys on a down turn, I didn't make any buys today. I may make some buys next week if prices are still down, but if POTUS says Xi is his good friend, then the markets may be up too much to buy anything.
Where's The SEC
The Securities and Exchange Commission (SEC) has a three part mission to Protect investors, Maintain fair orderly and efficient markets and to Facilitate capital formation. Last September Elon Musk, CEO of Tesla sent out the infamous 420 Tweet. The SEC initiated a fraud investigation because the comments by Musk "caused significant confusion and disruption in the market for Tesla's stock and resulting harm to investors".
Any harm or disruption from Musk's tweet certainly pales by comparison to any tweet POTUS has made about specific companies or tweets that impact the US markets, global markets and international trade. The unfettered release of market moving information has caused the biggest dislocation in financial markets since the Great Recession. The SEC is required by their mission and the law to take action against the Presidents tweets, but of course they won't. Maybe the House will.
Men Need Your Help
For three years I've hosted a Distinguished Gentlemen's Ride in support of men's health. On Sunday the 29th of September, for the fourth year, I will don my finest attire with my fellow men and women across the globe to join the fight with The Distinguished Gentleman's Ride to raise awareness for prostate cancer and men's mental health. But before I press my tweed and polish my boots, I need you to donate what you can for this meaningful cause and help me reach my goal.
For your uncles, your brothers, your fathers and friends.
Donate what you can, for their lives need not end.
This year I'll be traveling to Ukiah, CA to support a new DGR Ride hosted by David and Martha Bookout. The DGR Ride is a program of the Movember Foundation. Movember seeks to make a global contribution to men living happier, healthier, longer lives. It is the driving force behind their campaigns, funding strategy, and vision for the future.
The state of men's health is in a crisis. By 2030 Movember aims to:
Reduce the number of men dying prematurely by 25%
Reduce the rate of male suicides by 25%
Halve the number of deaths from prostate cancer
Halve the number of men dying from testicular cancer
Halve the number of men experiencing serious mental and physical side effects from treatment for prostate cancer or testicular cancer
You can learn more at Charity Navigator: Movember Foundation
Earnings Season Catch Up
Most of our holdings have reported. To help you skim through the long list I've color coded the REPORTED titles as MISSED, IN-LINE or , BEATMIXED
EXPECTED: Veeva Systems Inc. is going to report earnings on 08/27/2019.
The consensus EPS forecast for the quarter is $0.49. Earnings range is range is $0.48 to $0.51.
The consensus revenue forecast for the quarter is $259.37M, Revenue range is $254.17M - $262.6M.
EXPECTED: Heico Corporation is going to report earnings on 08/27/2019.
The consensus EPS forecast for the quarter is $0.54. Earnings range is range is $0.50 to $0.56.
The consensus revenue forecast for the quarter is $510.16M, Revenue range is $503.4M - $521.53M.
"Markets don't go to zero, Portfolio's do.
Buy quality, be patient...and look twice for motorcyclists"
- Clay Baker
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Keep Me Honest
S&P 500 declines to 2,350 or more (1-3-2019)
Healthcare and Biotech sectors outperform (1-3-2019)
S&P reaches 3,000 by year end (1-11-2019)
CSCO reaches $60/share (1-18-2019)
VEEV reaches $145/share (2-14-2019) (achieved $145.23 on 5-10-2019)
CVS reaches $91.50 (2-27-2019)
Bull market takes another leg up (4-7-2019)
The Fed will lower rates 1-2 times (5-13-2019)
Rule #1: Don't lose money
Rule #2: See Rule #1
Rule #3: Portfolios go to zero, markets don't, Stay In