10-OCTOBER 19-2021

Business_15Good morning.
Bull markets end on euphoria, but not until they’ve gone on far longer than many expect.  That seems to be the case in the commodity markets right now.  While traders are still considering that the price of a barrel of oil may hit $100, some are starting to bet that will just be a stop along the way to $200 per barrel, which would be a new all-time high for the commodity.
And thanks to the recent uranium rally, a new fund that will hold physical uranium has been announced to take advantage of that move.  The announcement helped uranium stocks go even further.  We’re starting to enter the euphoric phase for some commodities, which may have a few more months ahead of it, before a big pullback.

Now here’s the rest of the news:

 

October 19, 2020

Now That You Have ItGood morning.
Corporate earnings may be mixed, but consumers are back.  Retail sales rose by 1.9 percent, which helped fuel a market rally.  However, that rally faded out on Friday afternoon, as ebullient shoppers mean that less stimulus may be needed.
That forward-looking notion, against the backdrop of a lackluster earnings season so far, indicates that the stock market can perform well, even as the overall economy continues to struggle.

Now here’s the rest of the news:

The Pandemic’s Financial Risks: Echoes of 1987? — By John Persinos
Today is a dubious anniversary: “Black Monday,” the market crash of October 19, 1987.  Thirty-three years ago, stock markets around the world collapsed.  The meltdown started in Hong Kong and spread west to Europe.  The United States was hit after other markets had already plunged.  The S&P 500 plummeted 20.5%, from 282.7 to 225.06.  The Dow Jones Industrial Average fell 508 points to 1,738.74, a one-day decline of 22.61%.  At the time, Black Monday represented the single largest drop the U.S. stock market had ever experienced.
Program trading bears much of the blame for the crash.  Institutions use these programs as a hedge against market weakness.  Three decades ago, this complexity was new and little understood.  On Black Monday, as loss targets were reached, these programs automatically liquidated stocks.  Lower prices caused more liquidation.  The chain reaction accelerated.  Leading up to the crash, warning signs were abundant.  The economy was slowing.  International tensions were worsening.  Political unrest was growing in Europe.  The U.S. and China were at economic loggerheads.  Nuclear tensions were flaring between East and West.  Stocks were grossly overvalued.  The strong U.S. dollar was hurting U.S. exports.
The White House was dismantling financial rules designed to break a market collapse.  Passive algorithmic trading was spreading as a substitute for active stock picking.  Yikes!  Sound familiar?  It should.  I don’t think another 1987-type crash will occur anytime soon, but we’re probably facing a correction over the near term of at least 5% to 10%. Below, I examine current risks.  I also steer you toward an investing method that leverages these imbalances for profit.

October 19, 2019

Sometime it is necessary to dismiss one’s advice!  Often it is best to do so without injuring feelings or offending anyone!  This is not easy to do without some preparation … some advice.

More Tech Support Please

Some people are happy to give advice; they feel like they are contributing something helpful in their own little way.  But the problem starts when the recipient of the advice doesn’t follow it or has another idea.  The adviser might get offended because he will feel that his advice is not being valued.  Here’s how to dismiss someone’s advice without hurting his feelings.

  1. Show your appreciation.  Tell the person how much you appreciate his advice, and that you will give it some serious thought.  Even if you will not really follow his suggestion, the act of merely considering it is enough to show your respect.
  2. Reserve the advice for potential future use.  After a day or two, tell him how his ideas could be of great help or use, but you have also found that it is not suitable to your situation right now.  But since you think it’s highly beneficial, you will keep it in mind for potential use in the future.
  3. Build up the ego.  To build up his ego and make him feel that you respect his suggestions, ask for his advice on another subject; but this time, you tell him you’re asking his advice because you’re trying to help a friend or relative.

(No need to give any name.  If he insists, pick someone he doesn’t know.  This way, he won’t be able to track if his advice was actually followed.)

Asking may not be enough!  😉

IMG_0712
Come From Aways, Do You?

More Posts

05-MAY 15-2022

Today “small town” in Newfoundland is… Salt Harbour. May 15, 2021 Struggling … how to break bad habits? “Nothing is impossible.  The word itself say, ‘I’m possible.’” –Audrey Hepburn There’s no one single reason why we struggle — to break bad habits, achieve our goals, or excel in our desired domain — but more often than not, the biggest challenge is sitting between your two ears. Yes, your mind is incredibly powerful, and quite frankly, it’s a double-edge sword.  The stories you tell yourself, the things you believe about yourself, and the way you talk to yourself can either be

05-MAY 14-2022

Today! May 14, 2021 Good morning. One year ago, oil prices went negative as traders feared that the pandemic would lead to prolonged drops in oil use and got caught in trades they couldn’t get out of.  Today, oil and gasoline prices have held up well in inventory reports.  However, supply issues remain in the South and up and down the East Coast, even as Colonial pipeline paid a $5 million ransom to the hackers who shut down their system.  A number of states have declared emergencies as supplies have run low. It just goes to show that oil, one

05-MAY 13-2022

Good morning. Meme stocks are back!  Well, sort of. A spike in companies like AMC Entertainment (AMC) and GameStop (GME) occurred yesterday.  GameStop was even halted multiple times on the way up (but not on the way down).  Oddly, this may be an early sign that markets are looking for a short-term bottom, given the sharp reversals higher. On CNBC, analyst Jim Cramer came out against the traders of meme stocks using sites like Reddit’s Wall Street Bets, to find the meme stock opportunities in the first place.  Tough words for someone whose television show features sound effects.  But for

05-MAY 12-2022

Good morning. The good news?  Inflation has slightly slowed on a year-over-year basis, for the first time in seven months.  The bad news?  It’s still high at 8.3 percent.  And it came in higher than expectations. Looking at the data shows some reasons for the unexpected strength.  Most components of CPI still rose more than 6 percent in April.  But soaring food prices – which we’ve warned about fairly often — were a big contributor.  Another big move higher was record airfare prices, as high fuel costs and a reopened economy drove prices up. The data doesn’t give too much

05-MAY 11-2022

Good morning. Typically, growth stocks lead the market.  That’s because these companies have the ability to scale up rapidly, and one of the best signs of a stock heading higher over the long haul is increased earnings. Yet every few years, value stocks have their time to shine.  A year ago, Warren Buffett’s performance as being derided.  Yet he’s buying stocks now.  In contrast, Ark Innovation, the hypergrowth fund managed by Cathie Wood, is now not just down relative to Buffett — but it’s underperforming the S&P 500 since its inception. Can these trends reverse in time?  Yes.  Will they

05-MAY 10-2022

Good morning. Any econ 101 student can tell you that there’s a lag effect between something like, say, the creation of trillions of dollars in spending, and inflation rates reflecting that.  We’re seeing that trend play out today, with the highest inflation levels in decades. The good news?  Some of that new money first went to financial markets, rather than in goods and services.  That helped keep many things affordable, especially during the initial lockdown phase of the pandemic.  But today, we’re seeing the impacts of those past lockdowns (and current ones).  And we’re seeing that handing out money directly

05-MAY 09-2022

Good morning. People don’t mind inflation when it hits things like assets.  When stocks and home prices are rising, consumers feel wealthier.  This “wealth effect” tends to be beneficial to spending, which then become a self-fulfilling prophecy. The 2009-2020 market rally started with this effect.  The bank bailouts propped up the banks, but didn’t cause inflation on Main Street.  Today, thanks to the stimulus measures during the pandemic, Main Street went on a spending binge.  That’s caused a reverse wealth effect as the prices of goods like food and utilities are rising at a rapid rate — but now asset

Like this article?

Share on Facebook
Share on Twitter
Share on Linkdin
Share on Pinterest

Leave a comment

Send Us A Message