1165. Let's return to Wall Street stuff-9/27 Update

 The COVID era didn't only stifle everyone with it masks, distancing, and stay home from school and work idiocies. Hopefully we all learned how wrong a government can be and how much each of the TV bobble-heads say is only what furthers them along to being the perceived wise person or to cover up their ignorance. Not the subject of this entry, just needed to get it out!

Today, we look at where the Wall Street Markets are heading and how to get back in. For the last year I have been essentially out of the Techs and other risky or less favorable stocks. The private companies have more than surprised me in that regardless of the poor economy and political environment it continued to grow and even sustain that growth until the beginning of this week. I was out collecting my 4.75-5% in a broker’s account for large amounts in addition to my 7-10% preferred stocks. So, I didn’t miss out on much at all while the indices climbed. All this generated interest was in my IRA accounts, so, dream on Taxman those percentages were Tax Free!  This week we took some hits dropping the indexes and I am predicting another poor week ahead. I nibbled over the last 3-6 months when the market dropped gradually getting back into the market with stronger selections and more balanced portfolio (always something to improve). Now, I am waiting for next Friday, the day the markets move big up/down to catch a buying wave. MSFT is back down to the level I sold it months ago and I most definitely need that stock back in the portfolio. Most others I rebought piece by piece averaging back in gradually., like AAPL, AMZN. TSLA was a loser and I think still. EV’s are NOT the short future. Plus, China hold the power in batteries.

Is it really time to go full in? Long-term, yes. I’d say there is a LOT of crap out there to consider which is negative, but the question is how will the private companies fare. A positive is AI. How much hype is there re Artificial Intelligence (AI)? If the media or TV bobble heads would really understand AI they would stop talking about Goggle algorithms. AI is far more complicated and useful than making the people believe it is the keyword-search functions and algorithms and how someone is going to manipulate it more than the Dems have already with its collaboration with the Techs and the numbskull Media sheep. AI was being developed back in the 1970’s at IBM Watson Research. Do you really think it is a keyword processor algorithm that took 50 years to advance? I don’t have time to tell you the so-many useful applications and misuses. Just believe me that we have been waiting for this learn-as-you-go, explore-all-the data in the world, analyze it utilizing thousands of expert analyses and processes, then present a solution that no one expert could ever imagine. This baby is a spark to unimaginable growth of new companies and expansion of existing ones, let alone, improvement to our lives. Think medical diagnoses, think Network performance improvements, think manufacturing marketing analysis, improving profitability, streamlining the manufacturing of products. We lived in a world where even the “best” manager couldn’t keep up with process improvements. Not anymore. Long-term, you MUST be in the Tech Markets. We only saw a tiny piece with the CLOUD business companies becoming available to manage data on their systems to offload and faster process other company data. Now here is where AI can improve it’s the algorithms to rapidly and completely improve the connectivity and management of the Cloud for its many Applications and Users. The cloud alone driven by MSFT, AMZN, IBM and the likes will see major benefits in products and services. Health Industry components including hospitals, doctors, etc. will become substantially better prepared and develop more beneficial services. These Techs must be in a portfolio. Of course, for the riskier stock players, small Tech companies have huge potential. So, if you are still bringing in work income its time to put on the Lont-term beanie and jump in based on the risk you can tolerate.

The Fed maintained rates this time. Inflation is going back up, thanks mainly to Oil increases. Humpty Dumpty Joe continues to waddle with his head in the mud; the people actually running the government aren’t much better. We still have a massive immigration problem killing our cities. Who created it? Our government with its can-kicking for decades. Why we never updated the immigration policies to allow the proper type and quantity of workers  and an improved entry policy for legal entries I cannot understand and have been wondering that for at least 30-40 years! Joe has NO CLUE what it all about and what must be done. We desperately need to overhaul the whole immigration process. That will never happen until we get the clowns in the House and Senate out to pasture and replace them with real thinkers and movers. An outside consultant to run meetings and planning sessions would be most extremely invaluable. Never see it! They know only how to play the beat up the other party game. Gets me back to a very long-ago post (you can find it by entering keywords) re abolish the two-party system. Anyway, I’ll support the let’s-put-an-end to this illegal migration that is killing America. The Wall should have been completed! Joe, you are clueless! Then yesterday he was back reading his speech on TV blasting the Republicans for the immigration mess. I only hear a snip it or two, for I have better things to do than listen to his babble. I don’t know how Trump would deport everyone as he claims he would do, but this illegal crap BEFORE the legal ones is real disturbing. Plus, not know where everyone is and who came in is a major National Security threat. What are the Dems thinking? Yes, I know that answer – more votes down the line while them sacrifice life today!

Back to the Market. I have primarily kept the same portfolio of investments for several decades and have beaten every mixed investment model out there. Create a portfolio with just a few stocks. Don’t ever put more than 20% into risky stocks unless you have many years left of work. Always buy for Long-term vision. Avoid the news (generally), meaning don’t react to it. It will only change in the short-term. Breathe and enjoy the outdoors more, away from the financial stuff. Use the Williams%R graph indicator to learn when to buy/sell and overall market changes. I have a lot I can share with little time to do it. So, enjoy the investment journey and learn, learn, learn. Homework is Every Day; Work is every day. Commit and make an effort. Good Luck. 

------------------------------

9/27/2023

Prediction happened. Couldn't wait for the Friday move...could be up big or down, but back to positive next week. Therefore, I'm back in earlier than waiting for the absolute lows tomorrow or later today. 😉 

1025. Jim Cramer and Important Tips

 I have reviewed most of Jim Cramer's tips and guidelines over the years. Here are the notes I took from his many articles and books:

Trading and Investing are NOT the same – Trading is the buying/selling of stock based on some catalyst. Investing is longer term accumulation of more assets.

 

E x M = P

 

Ten Commandments of Trading:

1. Never turn a trade into an investment. Do your homework and sell a buy later.

2. Your first loss is your best loss – Dump before you lose your pants.

3. Its OK to take a loss when you already have a loss – CLEAN UP that portfolio. It took you too long to take a dump.

4. Never turn a trading gain into an investment loss – corrolary of 1.

5. Tips are for waiters.

6. You don’t have a profit until you sell.

7. Control losses; winners take care of themselves – spend you time identifying potential or actual l9osses and take them. This is first priority.

8. Don’t fear missing anything – there will always be another opportunity and don’t be greedy.

9. Don’t trade headlines.

10. Don’t trade flow.

 

25 Investment Rules:

1. Bulls and Bears make money – Pigs get slaughtered. Take the profits while you can.

2. Its ok to pay taxes.

3. Don’t buy all at once – arrogance is sin.

4. Look for broken stocks, not broken companies. That is, identify stocks that are out of balance with reality of GOOD companies only.

5. Diversification is the only free lunch.

6. BUY and HOMEWORK; not buy and hold. MUST spend an hour per investment per week after it is bought to keep up with news. Dump when you have to; don’t hold and lose.

7. No one ever made a dime panicking.

8. Own the Best of Breed.

9. He who defends everything defends nothing, or why discipline trumps correction – if the analysis sees it as a fleabag dog, be disciplined and treat the sucker now! You may have to get rif of it.

10. The fundamentals must be good on a takeover.

11. Don’t own too many stocks – must have time for homework.

12. Cash and sitting on sidelines are fine alternatives. – wait till right time to buy or sell.

13. No wudda shudda cudda; no 2^nd guessing. – move on, you need to manage future, not past.

14. Expect corrections and don’t be afraid of them.

15. Don’t forget bonds – they get serviced before your stocks.

16. Never subsidize losers with winners – Don’t sell your winners to cover losers.

17. HOPE is not part of the equation. If you use the word HOPE, dump it.

18. Be flexible.

19. When high-level people quit without proper notice, something is wrong – bail out unless they are retiring.

20. Patience is virtue.

21. Ignore TV comments.

22. Wait 30 days after earnings preannounce before a buy.

23. Never underestimate the Wall Street promotion machine – be ready to do opposite.

24. Be able to explain your picks.

25. There is always a Bull somewhere in the market.

 

Spotting Tops:

1. When competition heats up.

2. When management no longer speaks specifics.

3. When a company over-expands – usually reported as integration problems, or trying to mix a slow grower with a fast grower. Compare aplees-to-apples, same-store sales; don’t be fooled by higher revenues as a growth of core business when it was due to new stores that bring with it more management and quality efforts.

4. Watch for Government actions – don’t be blindsided.

5. No place to expand? All states have stores? This could indicate a top.

6. What happened to the Fad? Top time.

7. Accounting problems!

 

Economy Indicators to watch:

1. 4 consecutive CPU increase may signal Fed tightening ahead.

 

Other Cramer tips:

1. BUY CYCLICALS when Multiples are HIGH

2. SELL NON-CYCLICALS when multiples are HIGH

3. Fed has 2 ways to control: (a) change borrowing rates and (b) change quantity of money in market by changing reserves banks are allowed to carry.

4. Claims P/Es correlate to GDP cycle and past can be used as guideline for a stock.

5. Look at EPS growth per year … fastest growing deserves higher P/E. Determine the multiple based on earning growth and then determine the proper price.

6. Compare companies by P/E to determine the norm and whether an anomaly is due to acquisition, mgt. change, new business, etc. or to predict a P/E.

7. Act on cpmpanies that aren’t discovered (#1M-4M) or any company that is not closely followed.

8. Compare dividend percent and history of growth.

9. Know the company’s business driver metrics – use to compare to others and for growth measurement. For example, $/seat in airlines, $/sq foot in realty, shipments per day, profit margin/product, same-store growth.

10. Build cash for Octobers buys (when mutual fund managers drive the prices down)

11. Examine Debt-to-Equity ration … avoid debt unless normal for industry. Some companies incur debt in 4Q (retail) to stock up for Xmas. Others may to buld planes, build more cable systems, etc.

12. Determine whether a stock is “secular” or “cyclical”. Secular stocks NOT dependent on economy and demand higher multiples.

13. Listen to company meetings and announcements.

14. Favor companies growing sales and earnings faster than peers AND S&P and costs less than average.

15. The Value of a DISCOVERED stock will mimic the market. UNDISCOVERED stocks may not.

16. Why do Large Caps grow/decline? (a) due to rotational catalysts, e.g., portfolio mgr. shifts from group to group base on macro backdrop, such as weak economy as dictated by Fed. Involves switching between secular (health, drugs, beverages, food) and cyclical stocks. (b) dure to estimate revisions

17. KNOW HOW sector MOVES! More important than a business. DON’T BUY A STOCK WHEN SECTOR OUT-OF-FAVOR! Look at the CYCLE chart.

 

My Methodologies:

1. Do your homework on stocks owned

2. Check the cycle chart! Know the GDP and CPI numbers and direction.

3. Focus first on losses and loss-candidates for a sell.

4. Buy/Sell: Try WR%. FIRST, look at 2-yr, weekly chart of WR% to determine WHEN to move on a stock. BUY when moving above -20% (short-term moves) or    -80% (longer-term moves). SELL when it moves below -20% or -50 to 80%. THEN consult 3-6 month and daily charts to do actual buy/sell.

 

The CYCLE:

 

GDP	To Do	Fed Action
	Fed tightening on DOWNward Economy
5-4%	SELL papers & chemical (IP, DOW, DD)	Tighten (raise rates)
4-3%	BUY Medical/food (PG, KMB, K, BUD, PFE)	Tighten (raise rates)
3-2%	SELL cyclicals (CR, CAT, MMM)	Tighten/Neutral
2-1.52%	BUY high multiple techs (GOOG, YHOO)	Neutral
1.5-1.25%	SELL metals & minerals (PD, AA, MUE, NEM)	Neutral
1.25%-1%	SELL Gold; BUY Banks & Retailers	Neutral
1%	Fed getting ready to EASE or starts	Neutral/Ease
1-0%	BUY Housing, BUY Autos	Ease
0 to -2%	Look for bottom (possible recession) and BUY Low Multiple techs (IBM, INTC)	Ease
-2% to 1%	Economy starts UP	Ease/Neutral
1%-2%	BUY Paper & Chemicals	Ease
2%-3%	SELL Medical and food	Neutral
2.5%-3%	BUY cyclicals before Fed tightens (M prob high)	Neutral
3%	Fed starts tightening again to void off inflation	Tighten
3-4%	SELL Banks, Auto, Retailer, Housing	Tighten
3.75-5%	BUY Metals and minerals	Tighten
Stocks oblivious to cycles: Oil & Oil Services, defense, Aerospace, Telecommunications

1024. We are beginning the LATE cycle of the Business Cycle -- Beware Stock owners

 Fidelity's Viewpoint Article is the 2021 version of a more complete 2017 article describing how to invest during the 4 different cycles of the Business Cycle. I maintains it's conclusions despite being a briefer version. 

Back in March 2017 when I read the previous version, I had penciled in dates of the cycles:

Mid-Early = 4/2017

Mid-Mid = 4/2018

Mid-Late = 10/2022

Beginning of Recession Cycle = 4/2024

So, what does this mean? Let me note some of the key points for the cycle I believe we are in. All this is in the current article referenced above.

Where the MID Cycle was remembered for growth peaking, strong credit growth, good profits that peaked peaked, a neutral policy, and inventories and sales growth reaching equilibrium, we find ourselves already about 8 months into the LATE Cycle that usually lasts 1.5 years. Here is what we can expect shortly: Growth moderating, Credit tightening, Earnings under pressure, Policy Contractionary, Inventories grow, Sales growth falls.

Previous recent posts note the mitigation attempts by Humpy Dumpy Joe -- mainly government spending and hand outs (94 year old mother-in-law will probably be dead before she ever receives her third stimulus check) -- aimed at presenting a rosy picture for a grim disease. It won't last long before even the average citizen to finally wake up. Until then, probably 75% will be clueless in the smoke stirred up from all the dog and pony shows.

Anyway, which sectors are in favor and which to avoid during the LATE CYLE and then the inevitable Recession Cycle? A chart I reproduced here from the 2017 version and from some of notes from some of Jim Cramer's articles and books follows with some differences:

Sector                                      Early     Mid     Late     Recession

Financials                                   +

Consumer Discretionary            ++                                    --

Info Technology                         ++         +        --              --

Industrials                                   ++         +                        --

Materials                                                  --        ++            -

Consumer Staples                         -                      +            ++

Health Care                                   -                     ++           ++

Energy                                          --                     ++

Telecom                                        --                                    ++

Utilities                                         --         -            +           ++    

Jim Cramer suggests that in this Late Cycle when the Fed begins tightening (it's tapering is first) at an expected 3% GDP, we should be buying food and medical stocks (seculars, e.g., PFE, ABBV, BUD, etc.). As economy shrinks to 2% GDP, we should begin selling cyclicals, e.g., CAT, IR. Still at 2% GDP we should be buying Large Techs such as AAPL, GOOG, etc.. As we continue to fall in strength, Sell Metals and minerals. Now get ready to jump into Financials when GDP approaches 1% and the Fed talks easing (that's printing money baby) and teasing consumers to buy. Retailers should benefit in rush of buying. Easing will take a few months of convincing to turn around housing and auto market and to get us back on an upward trend into another Business cycle Early Cycle and out of the Recession Cycle (not necessarily a Recession).

If you are like me, the recession choices of Energy and Utilities never happens -- they are always a loser in the long portfolio. 

Now, the caveat: Long Secular Cycles (10-30 years) will affect the smaller business cycles (1-10) years). If you are a long-investor thinker, would you ever dump your Technology and Health Care stocks just to play the Business Cycle? No. I read the above chart as a slowdown (-, --) or increase (+, ++) of portfolio choices during the cycle. But with outside factors like Covid and Humpty Dumpty Joe's plans for taxes a distortion of the above chart and Cramer's guidelines become just Rules of Thumb (ROT). Oops, sorry WOKE people, ROT is on the do not use list!

Bottom Line conclusion: I'd pay attention to the AVOID list generated by my analysis of LATE Cycle Business Cycle caught in the global, very negative, economy outlook. What will I do? Probably forget about the LATE and RECESSION choices this Business Cycle and SELL everything in my non-taxable accounts to avoid the 10-20% market crash coming shortly! Then I'll buy back in with some consideration of the chart and Cramer's tips into whichever cycle is driving the business cycle. 

So, if you remember Sam and her crystal ball which always guided you and me, she just sent a signal down to me to dump when techs next jump up. That's got to be very soon!

827.Compare Brokers

I had an adventure is Fidelity Investments. I need not go into the specifics because I always had a work around. But, I wanted to see if any of the other Brokers had the full function I wanted the way I wanted it since old brokers did. So I went off to ETRADE and completed an application for an account so I could look at its interface on the PC AND its "expert" trading tool that runs on the web. I went to it this morning and it was like I went back in time to the caveman days. It had to be the most primitively written application I have seen in over a decade. At one time I was a Scottrade client before they sold out to ETRADE. Well, its nice interface were obviously thrown into the garbage can. Fidelity's PC Advanced Trader tool is light-years ahead of ETRADE! That made my decidion to stay put rather easy when comparing to ETRADE. From what I viewed of the Schwab system though, I won't give up on the thoughts of looking for greener pastures on the other side of the fence. The only reason for this post is to inform you to look elsewhere if you are considering ETRADE (just my opinion, based on over 36 years of experience in trading). The other turn off at ETRADE was that all 5 times I called I received the "overseas" speaking accent. I had to hang up on the first one because I couldn't understand her. The others seemed pretty articulate, but limited as to what they knew without additional help or research. This again is light-years away from Fidelity customer service which also offers a VIP service for eligible investors. My only stick with Fidelity in the last 1.5 years is that implemented an Automated answering service system that now IMPEDES getting to someone quickly that ALWAYS got you the answer, to now only getting the right place 50% of the time requiring multiple transfers. Another "benefit" of more automation!!!

810. Market to flat line before the slide?

Got a signal from Sam today. She predicts the market will flat line to try to release an excess of hot air before heading to cooler heights. We have enjoyed a 4.27 % increase since post 809 signal, which experienced a 24581 bottom the 2nd business day later. Sam likes to warn a few days early, so, do what you have to do. I sold a couple calls so far. Hate to be a half-emptyperson, but the dog prevails coming to predictions.

Let's see: we're still fighting the trade wars which we'll win, but it is already addressed in the market long-term. Short term jitters should dampen that a little. Last time I saw so much acquisition action the market dumped big time, so that is out there and I believe not reflected in the market yet. The drug stocks have resisted and weathered the naysayers, like Icahn re CI and Express Scripts; but time always wins out sooner than later. Major industries had players going after others. And the big factor is the clueless media who always runs opposite the tide, now reporting S&P could see upward bounce of 10%. (Sam lifting leg on media)

Whatever, play if safe.

809. Sam says JUMP (the Market)

Sam isn't Simon, but when she says jump you might consider it. It's time for another pop up in the DJIA. Although the world is transitioning from mid- to late-business cycle phase where money tightens again, the US is on the border (no pun intended) and profits still seem positive. Cycle dynamics at this point of the cycle where Fed rates are still in neutral territory until next hike suggest time to buy chemicals & paper stocks (so claims Cramer in his book). and begin to shave medical and food stocks. These are long-term suggestions and it may just be these that pop toward their ending cycle highs if you play with the gamblers short-term. Transgressing through the business cycle has been a slow, slow process this time. We've seen the "ease" beginning in the Obama period when the Fed couldn't stop printing dollars. Now Trumps easing via tax cuts extended that period a few years. Get ready for the banks to make their last move up also. By "move" I am talking months to a year in the slowing moving cycle moves. However, if you are like me, you ride the diversified "mutual fund" you created and be an Alfred E. Newman ("What, me worry?", NO). So, there you go. Be a short-termer and get excited like popcorn kernals in a hot popping pot, or a long-termer and stay chilled realizing that that those currently lagging stocks from the past decade will now keep you afloat. In short (again a pun), Sam expects techs to remain strong and financials to feed the fire (actually everything looks promising real short-term); but, come fall (another pun?), be ready for the consequences when the cycle starts giving you a preview of what it has in mind when  "put-your're-one-foot-in" becomes a reality and the cycle gongs go off. Sam doesn't expect chaos -- except the gambler-marketeers will make it so over-selling the market by leaps and bounds. Play it, or absorb it. You're choice. My goals remain "what will I leave behind at 99" -- that's a catchy phrase. And morbid.  Yet, being a senior is making me lean (yet another put) towards more investing GRADUALLY and SLOWLY in more fixed income choices -- why give up the much higher returns long-term of other stocks now unless you need spare "gold" to set aside for the last rainy days of your "golden" years (right!).

"Don't worry be Happy" Bob Marley would sing -- now that's better.

807. Enjoying the Market-Coaster?

Sam, my long deceased market guru lab, is enjoying the comedy here on earth and how completely insane we moral react to news. Long-term views are out and News and Fear governs Wall Street, always with overreaction both ways. For instance, Trade Wars on, trade wars off, Kim going to meet with us, Kim not going to meet, etc. What happened to the profits and economy looks splendid and futures should be bright? Gone, thanks to the gamblers trying to outsmart each other to gain footing short-term. It has become a game interrupting the plans of to we long-term investors. So, what do we do? Option one is play the game and gamble along; option two just close you eyes and let the gamblers trip over each other and focus on long-term.

I like both options. I, with my dog's guidance, know where I need to be long-term and how to add to my diversified account. actually, I very seldom look at anything new and just add to existing investments. I do occasionally readjust positions due to industry moves within the economy cycles. But, this is simply moving money from one place to another. Thus, my long-term has been proved and verified valid during the last 20-25 years.

Gamble? I guess you call it that any time you buy/sell anything. When? How much? I monitor the DJIA and NASDAQ and watch the relative changes (Williams % R indicator on charts), as well as look for the crosses of short-term moving and long-term moving averages. These give me some insight on expected up/down and when to buy/sell. In today's market, I love the overreactions the gamblers present. I do NOT put myself in the gambler-definition which I define as horse track betting mentality and large HOPEFUL wishes employed rather than sane probablilities -- always looking for the big score. Seldom do you hear about the big loss from these players. My strategy is to buy when the %William R CURVE just begins to head back up (never on way down), above the 80% heading to 0% (UP curve) AND the short-term moving average heading to cross over the long-term average in an upward direction. That;'s when to buy. The opposite is when %WilliamR goes below 20% and returns back down (the curve that is) beyond towards 100% AND the short-term average crosses the long-term average in a downward direction. This is the general concept and buy/sell scheme that has worked for me for decades.

As I just said, the overreactions due to the gamblers driving things up (can't miss out) or down (gonna lose everything) presents changes to the %Williams R quite often. Use that to an advantage. I seldom sell more than once or twice a year and only to rebalance portfolios. So, pocket change from dividends, called in preferreds/bonds, or sells to lighten up an an industry (Cramer has a decent book re the economic life cycle and industries that benefit or should be avoided and when -- also Fidelity has an excellent article just on this).

But bottom line, stick to those investments you chose wisely that have performed for decades. Trade Wars - short term actions. You may end up paying more for something due to them, but return is the profitability of America's companies allowing for income increases, dividend increase, etc. Either they will balance out, or I would venture to say work out more benefit than not long-term. And, does Kim bother me? No, SSDD as Stephen King would say. We have the advantage and can reach out to help troubled countries like his for the world's benefit. His games will continue! They have little influence except to cause overreaction by the people you live on improbable FEARs. Take advantage of the market drops and buy. Maybe in 2-3 years something will be accomplished in the world of Kim and equitable trade. Don't expect it NOW! Continue plopping what you can into investments that get you more than -1% after taxes! I'm content with just 7-8%/yr (more than 2-3% above inflation). 

802. Kindle HDX revisited

It's been ages since (only once) I wrote about my Kindle HDX. It just doesn't hiccup! I'm amazed that Amazon can upgrade it's operating system so effortlessly and transparently, unlike Microsoft Windows. Of course, it is only an Android Tablet though.

The first post, # 715, reported Zinio not working and its fix. Ironically, this is a repeat since the Kindle version went belly up a few weeks back and I now have something called DGB Digital application which replaces it. I got it by visiting my RGB Digital magazine page where I borrow magazines via my Arlington Public Library account and at bottom is a hypertext to get the Kindle version of its new reader. That's all it took. Happy again. 😀

Can't say enough about Amazon's products. My wife still uses her 4th version very old reader and won't give it up! So light weight it became part of her hand. Cooking done one-handed, watching TV one-handed, etc. Another nice thing is that Amazon cares about legacy applications and functions, unlike Microsoft which replaces things with more lights and sparkles but less satisfying apps. So, KUDOS to Amazon, especially since it has been a money maker in my stock Porfolio for years and years.

799. Apple in the basket

It's so nice to have an Apple in the basket. Today I looked at it and it was all polished up. I've been blessed since original buys of this stock. Plus, the entire market rose -- DJIA +332. Back to 24262 after months of swinging in the breeze. Can't say we'll keep our feet dry for a long time, but I can say whoopee the ride has been interesting. Since last post re market, Post 793, when Sam said get ready to jump. So, I've been nibbling since then with the few pennies that came my way. Haven't jumped in big time yet, but just added to the family-income-machine near troughs -- like stopping and getting refreshments when the coaster reaches the bottom. Must admit that some of the refreshments didn't settle too well before the climb was done and the drop occurred again. But, isn't it exciting. Love seeing the world from the top with a full basket of apples, my Kindle, and other diverse things. 

So, what does Sam say now? Enjoy what you have and ride on. Let's wait for all the Trump news nonsense to disappear and China to walk like us.

793. Sam's Crystal Ball Market Prediction is back

1/30/18: It has been a long time since Sam sent any "change" signals back to earth re the stock market. Looks like we're going to see another 5-7% pull back and test 25000 resistance. The roller coaster is already partway down the big slope. Start thinking about what you want to buy. Avoid selling if you are a long-term  investor, but go ahead and sell some calls down about 3 % from current point. Of course, if you are playing with non-taxable accounts, play away if you are a gambler. Sam will be back again in 3-4 market days to help you get back up. Try not to vomit on the seats. Patience. This is end of month AND algorithm driven over-selling again.

Update 2/2/18: Whee-e-e-e. 25708 at the moment, down 475 or so. Closed at 26076 on day this was originally posted. Was 26617 on 1/26 before post. 25286 is -5% point from high. 24753 is down 7% from the high. My 25000 is mid-point or about 6%. I started some buying today on stocks that were even beyond current market stress. I'm a long-term investor and won't fret being wrong by 1%.

Minutes later....25619. You should be screaming by now. But, the bottom is near. We'll still get to feel the sharp curve ahead before leveling out and experiencing the smaller ups and downs until we return to the level wheelhouse, get on our feet, and rush off to a new ride. Maybe we should trek to the Kiddie rides or Merry-go-round. Naw. Need to clean out the guts and refill with good food once in a while. Sam did that by eating grass.

Update 2/5/18: At 24345 we are now over-sold. Start plopping your millions back into the market. 

Update 2/6/18 2pm - Up + 341 and rapidly rising ... thank you Sam for your foresight. 

Update 3/23/18: The bad Fed and Trade War vibes rekindled the fearmongers. Guess this wasn't completely hidden in the long-term crystal ball, but the overboard fear always hit the automatic triggers in the big-boy machines to continue the slide way down below what is sensible. They play the short-term swings and do it well causing this overreaction. Just sit it out as mentioned before. You can't fight the AI Machines that react in nanoseconds! Trump continues to "NEGOTIATE" best trade deals. You can't do this lying on your back when talking to other leaders. Let's wait and see what results come. We have a business man in charge who is flexible and intelligent. He'll cut bait and not be ashamed if he has to. As for the Fed: we knew inflation rates would rise and will again. Inflation is a result of improving the economy. Balance will level out again. The Fed's target is 2% inflation. Want to bet on whether we exceed this before they finally react and print more money? With China problems (they own many bonds and claim will not be buying more) the target is not steady I would say. However, long-term the stock market will always be better. Maybe in another 15 years I'll hide my investments in government bonds. But that will only be because I can no longer see, mentally incompetent, or the wife is already living off the trust I left her along with her weekly stipends. Life is a hoot.  Smile and think of your Sam.

754. YAHOO media very misleading article - Trump's Bad logic re trade

For months I have tried to stay out of the Political trash going on in the campaign process. But, when the Republican Convention goes after two front runners and the liberal press floods the news with misleading articles, I'm obligated to speak up. This post is about the "Trump's Bad Logic on 'Bad Trade Deals" posted by Yahoo Media, as much liberal left as possible. Let's look at logic they use and compare it to just plain Common Sense or what a dog can even understand, Common Scents:

Start by perusing Yahoo;s article and let yourself get all warm and cuddly with the well written, but misleading, analysis. Now consider the following:

1. They start with Mr. Trump's position “If you look at China, and you look at Japan, and if you look at Mexico … they’re killing us,” he said during the latest Republican debate on Fox News. “With China we’re going to lose $505 billion in terms of trade …. Mexico, $58 billion. Japan, probably about… $109 billion” which is FACT.

2. Then the Yahoo commentators remark “They’re sending us goods and we’re sending them green pieces of paper,” Duh! Actually our companies are sending (exporting) products made are by employed (we would certainly like more employment) American citizens, and we are receiving (importing) products made in other countries made by foreign workers, some of which are employed by American companies that have moved out of America (NOT paying taxes and who have taken jobs from America and given jobs to foreign workers. Whether the companies abroad are American owned or not, the foreign workers are paid less (and receive worse health benefits and pension benefits) BECAUSE our government is allowing them real FREE trade and, thus, their product prices will naturally be less than American made products here. Here;s the bottom line:

Countries like China, Vietnam, etc. who don't provide the necessary humanity benefits to their workers, also don't pay them as much as American workers. The result: Imported products cost less. Meanwhile, our employment numbers lag because our companies can't compete and millions of Americans who can't get a job contribute little to the purchasing of products and therefore OUR ECONOMY. Our businesses suffer, unemployment stays low, our economy suffers. Wouldn't it be nice if we had REAL FREE trade agreements that took into account the FAIR trade between countries that ALSO demand respect to each country's workers? Wouldn't that be the humane and logical goal?

3. Instead of supporting the common sense goal above, Yahoo would rather turn a logical goal as above into an attack on Republicans stating what they view the Republican position is, i.e. "Low-wage countries where workers get paid a fraction of U.S. wages are basically undercutting American workers, and therefore ought to be punished." Republicans like Trump are asking for FAIR FREE trade that recognizes the human rights of all WORLD workers. It's not a punishment to fairly counter another country's harmful tactics (currency manipulation) to make trade FAIR. Our government's currency is allowed to fluctuate base on the markets and economy. China ARTIFICIALLY changes the currency valuation to push their products on and when the want to an other country in the world. WE do it fairly, whereas they screw us every chance they get! So, evening out the field is NOT punishment but a requirement for America to stop the unfair tactics. Thus, someone with a strong position to counter the tactics, such as placing a tariff on imports, has a much better negotiation position than one, like we have now with O'blunder, who rolls over on his back and says thank you.

4. This is an addendum to number 3. I am not currently a Trump supporter, but am getting angry enough at the Media and attack ad lies that I will certainly support him if need be. One thing people need to understand about being an effective negotiator: He first establishes a positional range of what he will accept, but always starts with the maximum (most beneficial to him, or America in this case) and never drops below the minimum (still beneficial). So when you hear a negotiator's position, you know where he will begin negotiations. In the case of trade and the 35% tariff that's being kicked around, it's just a staring point and may never really happen because once negotiations are complete, it will be less or none at all depending on the other parties. American negotiators (hate to call them that) are continually failing to reach an acceptable real goal for America today!

5. Let's look at even the worse case scenario where America does impose a 35% tariff and compare my expectations to those in the Yahoo article:

a) Yahoo's position is that everything is fine today. Economy is great. Unemployment is great. Consumers benefit from the cheaper imported products. And 3-5% of GDP is fantastic for a trade DEFICIT! 

b) A DEFICIT is NEVER good! Period! You don't compare history and try to trick people into what an acceptable trade deficit is. No DEFICIT is good!

c) The "government" unemployment numbers are NEVER representative of the real number of people desiring a PERMANENT and adequate paying job. Tell the people LEFT is Detroit that their crazy, unemployment is fine! Tell the workers that have been replaced by illegal immigrants or foreign workers that unemployment numbers are fine! Get real Yahoo! You have done NO justice to cover up the real unemployment numbers and conditions throughout America! Fortunately I'm retired and can live out my life regardless of the crap Yahoo and other liberal media feeds us, by I am finely to the point where I must speak up to the injustices they are doing to this country. And, in particular to the the further destruction of American businesses, and therefore, potential workers! So, I'll just make a common sense statement here: American businesses can only compete or be created in a FAIR trade environment. Hopefully it will be a FREE trade one too. But, we have seen that regardless of whether it is a Free Trade agreement or not, the less respectful and less honest countries will by all means play dirty, such as currency manipulation. In other words, self-preservation always trumps paper agreements. Particularly, those paper agreements with no audibility and enforcement or those written with the specificity needed to ensure the playing fields are equal, such as market driven currencies or humanitarian rights.

d) Now, consider a tariff on imports from ONLY those countries who play dirty. Yahoo is right that their products will become more expensive and the expense is something we the consumers must digest. But then they failed to mention that the 35% would go right back into the economy to businesses to let them grow and prosper, creating better products and employing more people or paying more! Also, what happens when demand decreases for a product? I would guess a 35% tariff would jet the price of the import up to where the American made products become equal or better that the import. So, the import demand shrinks and the law of Supply and Demand tells us their prices will have to decrease again if they want to sell them. So, I would expect to see REAL competition, which is of course Capitalism and healthy. However, I would expect the other country to be intelligent enough to realize the consequences and results as explained during the negotiation table for trade and PREVENT the tariff from being imposed. Hence, Trump's negotiation point. Renegotiation of trade is a must and POSITIVE for America, and will grow companies, increase employment, and ensure the stability of America's economy.

e) Addendum to d) above: Would we be providing a fairer and more opportunistic environment for America's businesses and workforce (employment) if trade agreements are revisited and negotiated? I say absolutely. Tied to this is also the Republican requirement to bring jobs AND businesses back to America which will be further driven by more amendable tax breaks. If we can bring back BILLIONS of dollars (the green stuff) AND the businesses FOREVER by reducing the corporate taxes why wouldn't anybody want that? A lower corporate tax may provide less tax income based on the incomes reported today, but when the businesses are back into America or and/or allowed to bring the green dollars back in at some cost, the net income will net even to start with, but because the environment is much more positive for expansion and growth, more income than before might happen, benefiting all Americans. Bringing back businesses AND their foreign stash of money is key to America's long-term success.

It's time to let the ANGER out! The media is KILLING this country with articles like this. When you get to vote, please , please don't read an article like this Yahoo one and believe it. Use some common sense. The Media is NOT a friend. The Media gets PAID to incite. The Media also gets PAID to take an ANTI stand. It no longer reports facts and utilizes charts and statistics that benefit the message they want to persuade you to accept. USE COMMON SENSE!

741. Market's in BUY territory

As noted in post #724 the -11% drop from the October high is a signal to jump in and get your feet wet. The noted DJIA level in that note was 16000. We just about made the 18000 level but ended up a hair short. If you believe in Sam's crystal ball you should already be knee deep and need to react quickly before the tub begins to fill again. I'm always a bit anxious and dove in earlier around 16238, afraid I'd miss a bargain on the stocks already far below anybody's expectation and reality. So, as I told my son all week, here's the nod to open the gates, put on your boots, consult nature, do your Wall Street Shuffle, or whatever you need to do get back in the market. Just Sam's opinion though, but I found her to not be all about bark. Enjoy the climb.

BUT --- remember Earnings season is just about upon us and the world economy, commodity prices, including oil, and the strong dollar will scare the dickens out of investors, which in turn will cause a very volatile ride through that period. So, I believe there is no rush to fully immerse oneself at this time and to just stay selective buying the best and biggest losers; keep something for milk and cookies until you see the winds turn strongly.

740. Here's a thought long-term investors

Consider the population of China, its proximity to all the necessary raw materials, the year off from infrastructure building, and the wealth they have accumulated in dollars and what does it spell? I expect, like its population, that enough raw material manufacturing, e.g., steel, aluminum, and copper products, will explode and greatly exceed all the other countries production within 20 years. What does that do to our steel, aluminum, and copper and related products manufacturing companies? I would expect, like OPEC and oil, China will control the prices of the commodities and 1st tier of manufactured products. What recourse does America have other than to impose import tariffs on Chinese products in order to extend the misery of our manufacturers? So far we do not have free trade with China, however, China has been creating free trade zones on their own. I suspect they will then first take advantage of those countries. So, keep your eyes open. In the meantime, do invest wisely.

738. Playing the dips?

Well, this morning the DJIA opened down 6% from it's October high. Still not the 10% I'm anticipating, but a point where getting your toes wet is just too much to resist. Remember the roller coaster rides where you slowing crank up the first rise to only gasp coming down? I believe we are there. Sorry, I'm taking the front car so I can see what's coming. When we near the top I'm going to again lighten up so the fall isn't as taxing. I'll explore my options (pun intended) when I see the big picture sitting on top of the crest and get ready for the big one. I really think we'll have a big buying opportunity during the time earnings are being reported while the world is still in turmoil. But then, what does a dog know? Think about that. Like my first dog, I'll probably crawl under the oil tank in the basement until the thunder stops, only to arise and get right back into the sunny future. Sam doesn't expect a stellar year in the market. She already picked up a [bonds] ladder to ride out the next couple years. However, she is still looking to capitalize on the higher dividend stocks (a little insurance) until the biotechs and techs break out with some new innovations. What about inflation? China may give you a clue on what SHOULD happen (continued low inflation), but will the Fed mess it up? Your guess is as good as mine. I'm hoping the change of the guard (King O'Blunder) will provide a spark for more predictability in the world. Unfortunately, many of us are dependent on the masses of clueless voters, like the ones who voted O'Blunder in twice! With that, I question The Donald's real chances since the masses look for cuteness and pleasant talk -- well, maybe he does have a chance then since his opponent will be in the same boat! My job is to determine how I invest in either scenario. Too bad the masses have no clue how to invest, let alone save, leading to uneducated voting. Ok, time to turn the soap box back over and collect my plans for further analysis and planning. Good luck in 2016. You are on your own; don't count 100% on our advice, it comes from a deceased dog with a crystal ball. One last thing, green is the color of the grass, NOT a guiding principle to produce grass; and, I need grass!

737. A Quick Market Update and More of the Future

How does down 5% from the highest to the lowest DJIA sound? Not quite 10% as posted in 233, so watch or for more. Sam feels the volatility and smells Santa making a presence and present of a rise to get you out there shopping. By all means shop IN CASH, not credit you won't be able to pay off. Last thing this country and world needs is more credit exposures. Remember, YOU aren't too big to fail! Only the big companies are, which is also bad for you since the government takes money out of your pocket to rescue them. 

Now, for the 10% drop. Sam is still quivering and will probably remain that way until the first 2016 earnings conclude. It's not just the earnings though which will be the consequences of other events. Sam repeats her disclaimer that she's only a "deceased" dog and can't be right all the time. Presented here are only individual feelings and opinions that should NOT be used without your own research and conclusions. But, she still feels like a 10% leash is on her and it must be shed before she can run free again and enjoy the smell around a few trees, posts, and other fixtures that collect the smells of fear in other dogs as well as a little excitement. Thus, let's get through this mess by end of January 2016 and move on.

For some reason Sam does not fear OPEC. Can it survive by shooting it's other foot too? Maybe the presidential chatter of a tougher foreign policy will matter enough to rattle OPEC, really Saudia Arabia, into being just satisfied to "control" the knobs instead of winning the Grand Prize of dictator of oil. Our foreign policy, from oil, to terrorists, to leadership from the front rather than none even from behind, to the strength of our dollar and improved exports despite its strength, to acceptable relationships with other foreign leaders where we at least LOOK POSITIVE AND IN CONTROL would be a blessing. We won't tell you how to vote, but do consider the total failure of foreign policy by the current executive controlling party. I wish I could, on the other hand, wave the flag for the other party, and can for a few candidates. However, Congress and it's comfortable buddy system and cronies has made this government pretty ineffectual. Wish I had an answer to correct Congress other than a near total purge and limits on membership, but what's to guarantee that the policies remain the same and just different players manipulate the actions? Will a few REAL leaders please stand up! 

I thought Representative Ryan would should some spunk and common sense and lead, but he has only managed to grow a beard to hide his face and shame. My suggestion to SETTLE a permanent BUDGET finally and quickly and then get moving on other issues uninterrupted by the budget and debt mess we are always in. Never in my consulting years have I seen a client (government) so clueless and corrupt.

Okay, flip the box over and hand out the soap as stocking stuffers; better than coal. Have a Merry Christmas or at least have a Happy Holiday season. I'd play the "Have a very Merry Merry Christmas" song by the dog choir, but haven't figured how to do that yet on this blog. Hang in there Seniors; we may not be getting a raise and have to suck up a Medicare increase, but we have out health. Right? Well, at least we were born tough and know we'll find a way to get by. If only the younger generation had this knowledge and willingness!

733. Market still trying to break 18,000 block

We are getting close to the end of 2015 and haven't quite pushed the 18,000 resistance level as stated in post #724 in October. We have had some good dips to sell while up and buy when down, but we haven't hit the big drop that I fear. I have already finished my portfolio balancing for this year and ready to take whatever we get in my non-retirement account. However, I might play the expected drop in my retirement accounts.

Now is a good time to get those losses sold and reduce your tax burden. You can always buy back in, but watch out for the Wash Sales (buying the same stock within 30 days, either before or after, selling it for loss unless all shares are sold). [Note, search for more complete description if this interests you]

Sam's ready to clean her crystal ball for a 2016 forecast. Things to consider include, but not limited to: (1) drag of Emerging Markets, particularly Russia, China, Brazil. India may be a boost if it rains there (seems Gold sales are down by the farmers who buy 60% of it due to lack of rain...can you believe it?). (2) Recovery of EU and Japan. (3) Bloody O'Blunder's games. We expect Fed rates to hike gradually, so I don't think that will have any major impact through the year. 

A positive person would bet on recoveries through the world and rise in commodity prices and Industrial stocks. He might also bet on some key advances in Biotechnology Industry. But O'Blunder health insurance stocks we'll go negative because health costs will continue to rise driving them to lose more O'Blunder accounts (already seeing the losses through 2015) and causing havoc again in the Health Industry. Will Financials ever recover? Sure, but not in leaps or bounds. O&G? Gotta come back...OPEC failed to wipe out anything other than their wealth and a manageable delay by America's companies (the weak have been and being sucked up by the strong). Politics? Pray we don't continue on the poor O'Blunder programs. My biggest fear for 2016 is that We the People AGAIN go to the Presidential polls uneducated and vote for looks or someone with fluent speech or youth. Unfortunately, we live in a society that these types of people are in majority and WILL influence and destroy America. 

And the worse thing: The MEDIA will continue to focus on the negatives AND their bias rather than on just reporting the facts and moving on to another story. I made it policy in this house to limit what they think is news to less than 10 minutes a day and increase common sense analysis by 100x! 

Sam say "Don't lose you common scents." 

724. Runaway Market?

When will I get a dip in the market so I can BUY? Sam's crystal ball is murky. All technical indications I see are for the market to continue its rise (generally) for a while. What scares me is that the further it goes up (this time) the more it will fall. So, let me go out on the limb after the 300+ DJIA day today. We may again test the 18,000 barrier (+3%) and then once again return to 16,000 floor (-11%) to test that again. By that time (late December) we'll be ready for the new year boost should it come. January might get a spike up, but earnings in 1Q will probably damper that quickly. Summers are usually boring with the market taking its own vacation until September. I will bet on a decent rally then until election time. Depending who will get it, I predict the market to dump (Dems) or rise (Reps). The net of this forecast is fasten your seat belts and learn to be very, very patient. By September 2016 we should be seeing that the inflation increases through the summer are not a big thing. 

But then, who knows for sure? I could be one of the pessimists that predict doomsday for the last 5 years and when something close finally happens (temporarily)  polishes his/her participation trophy. I'm NOT a pessimist given the U.S. economy outlook and its ability to manage crises. Now, worldwide is a different story. Tons of things that could affect its economy. The biggest I see is the continued hammering of the Emerging Markets. OPEC is killing the commodity markets (not just oil) and will bankrupt some countries if we don't start exporting oil to stop it. Will O'Blunder do ANYTHING? No. 2016 will be a lost year as far as shoring up worldwide economy. So, the realist in me again points out volatility and nothing exciting until 4Q2016 when we learn of our fates with a new President. I know i'll be ready to pull the plug or fire a rocket in November 2016. I truly hope We the People wise up by then a vote to celebrate rather than shrivel up and hibernate for another 4 years like these last 7 years. I thank the productive U.S. companies for getting us to where we are despite the government (Executive and Congress).

719. The War of Currencies

Once again we witnesses the Chinese devaluing the Yuan. Remember what happened last time? Well, if I recall, Australia, Japan, South Korea, America, and several other key countries lowered their rates to drive their currency strength down to compete with the Export advantage the Chinese gained. Will we break the trend and really raise rates in September? I would say NO if I would believe the Fed really wants to compete in the currency wars. However, a political YES has high probability simply because of all the hoopla the Fed has led us on the entire year. Will the stubbornness of the Fed who kept promising a rise stick with it to buck the trend?

Let's say YES. What are the repercussions? Well, the Dollar gains strength. Not good for our exports, meaning not good for our a whole lot of important, large, businesses. Could be the time to look at the NASDAQ's small companies who focus only in the American marketplace. But, a small raise in rates with rhetoric that we shouldn't expect another for at least a year could be the catalyst, after a slight down market, to show the world that our businesses can endure regardless of the currency wars the others have begun to SAVE their economies.

If you followed my predictions, or the crystal ball my dog Sam left me, 2015 turns out to be a ho-hummer, slightly positive year for the markets. Thus, negative volatility will again be upon us, as will a recovery. Only question is will the recovery be quick enough to end 2015 positive? The question you should be asking though is where will we be 2-3 years out and start INVESTING rather than gambling short term.

Like our recovery after the financial crisis, the rest of the world is still digging themselves out. They have to continue QE and other means to get their individual economies positive. Emerging Markets still suck as commodity prices continue to drop because demand is pathetic. However, what happens when a countries GDP doesn't increase from already to low lows? The Government has to spend! China has been injecting Yuans into their businesses not only to keep them afloat, but to give the impression that the GDP isn't as bad as reality. They have tried to get consumers to spend more, but little help arrived. Of the Emerging Markets, only India is growing. And its because of India I am holding my DEO stock, betting with Diagio that their investment in India's distiller will spark a buying binge in a country that has shown no real market due to a lot of reasons. I see India continuing to grow the spending habits of its population.

In summary, Currency Wars are really no more than a war to see who can take down another countries economy by driving its export revenues up and gaining market increases. I think America can withstand any of those wars even when raising rates. The strength of the dollar is exactly what we need to curtail China;s push to make the Yuan a global resource for trade. See #696 for a insight on how Energy rules the world and our Dollar is the Petro Dollar. We can't let this slip away.

Entry #668 introduced a great book to read about Currency Wars: Currency Wars by James Rickards - Excellent book ties together the way nations manipulate their currencies to get an edge on other nations. Both history and current events. A+

Entry #696 presented another key book re petro dollar importance: "The Colder War, How the Global Energy Trade Slipped from America's Grasp" by Marin Katusa.

695. Greece and Markets 4 month countdown

Looks like the Greece crisis will definitely ensure a market dip this summer. It was given a 4-month extension to get its act together. So, we'll see the negotiations begin in mid-late May to come up with another plan or bailout. Just when the market will be over-tired already. So, if you want to play the short-term market, get out your moves. Or, suck up the drop if you are comfortable long-term.

693. Japan still banking on favorable Karma

James Clavell emphasized that the Japanese believed almost entirely in Karma in his book Shogun. During that period little was expected and the outcome or mishaps were just Karma, i.e., fate. Little did they believe could be controlled and everything bad could not be prevented -- just Karma. Well, this article seems to enlighten that belief again. Abe is having a hard time getting them out of recession. Although the article is headed "Japan emerges from recession but growth subdued", I wonder how they can say that other than a few quarters had positive growth. When Abe imposed a surtax on goods, he also discouraged the citizens from spending. He now has a tough road to get the troops to start spending more -- hard because the Japanese are primarily savers, particularly during the last decade of economy woes.

What doe this mean to you? I would say don't expect one of the largest economies to turn the world economy around! Ain't gonna happen. We must hope they at least keep their own and grow slowly as the article and Abe HOPES -- ah, the Karma-word. I'll even take stagnancy at this point rather than another recession.

Let's see: Russia won't help the economy, nor most other Emergency countries that are exporters of oil. Saudi Arabia isn't helping matters playing its oil game with the world, Europe wrestles with several countries to keep the Euro in tack. Once again, America shines -- this is where you need to invest. A lot of turmoil to wade through. I expect the muck to get deeper before it dries up. Short turn, until summer, we can hope, believe in positive Karma happenings, until reality reigns down on us like a hot August sun.