What Can Anyone Say?

“My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?.”

- President Donald Trump

The Portfolio

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.

MY SPONSORSHIP PAGE

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

VEEV 8-27-2019

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.

HEI 8-27-2019

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

Stay Invested,

Clay

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Keep Me Honest

  1. S&P 500 declines to 2,350 or more (1-3-2019)

  2. Healthcare and Biotech sectors outperform (1-3-2019)

  3. S&P reaches 3,000 by year end (1-11-2019)

  4. CSCO reaches $60/share (1-18-2019)

  5. VEEV reaches $145/share (2-14-2019) (achieved $145.23 on 5-10-2019)

  6. CVS reaches $91.50 (2-27-2019)

  7. Bull market takes another leg up (4-7-2019)

  8. The Fed will lower rates 1-2 times (5-13-2019)

Clay's Rules

Rule #1: Don't lose money

Rule #2: See Rule #1

Rule #3: Portfolios go to zero, markets don't, Stay Invested

Rule #4: When a good stock you own drops 10% below your cost basis, add shares

Rule #5: Bull markets aren't sustained without the Transports

Rule #6: When Forward P/E is lower than TTM P/E, expect earnings to increase

Rule #7: When an investment bank sells below book value, buy it

Disclosure: I am personally invested long in some or all of these stocks or funds that appear in the Stay Invested portfolio and may purchase or sell shares within the next 72 hours. I am also invested in other stocks and funds that do not appear in the Stay Invested portfolio but may be mentioned or related to this article. It is not my intention to advise or encourage the purchase or sale of any security. I am invested long in these securities mentioned in this post:

CVS, CSCO, VEEV, STZ, AMZN, NVDA, BCRX, GS, BDSI, VEEV, VTI, GLD, HD, AWR, XLNX, MRVL, NBRV

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.

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This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice.
This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.

© 2016 by Clay Baker all rights reserved