The Economy: The hum-drum economic numbers have been overshadowed by the roar of the mighty bear who woke, from years of hibernation, with an insatiable appetite for the nattering nabobs of complacency. During the Dot Com Era, we marveled at vaporware, eyeballs and non-existent public companies with triple-digit stock handles. During the prelude to the Financial Crisis we were amazed at the fixed income garbage that entranced investors. Recently we’ve been concerned as US financial markets moved relentlessly upward on anemic global economic numbers. Talking heads are too giddy reading their tele-prompters. Bloggers and reporters are compromised by their own agendas. If the rest of the planet is in economic distress, with China, commodities, currencies and oil in turmoil, is it prudent to assume the gravy train will go on forever? The U.S. may be the Big Dog, but are we immune from a global flu when 48% of revenue for S&P 500 companies comes from overseas? In the past week, the Fed seems to be backing away from September Liftoff. No Liftoff is confirmation that things aren’t up to par … and as we’ve mentioned before, if it doesn’t happen in September, then it looks to be March 2016.
Food for Thought: “The Market giveth and The Market taketh away.” After being in the tightest trading range since 1927, stocks decidedly broke to the downside in the past week. Before today, major indices were down 12% for the month of August … quite a jump from complacency to panic. … then right on cue … voila!! … Janet and her Boys were doing their Hail Mary shtick to talk the markets up. Fed Presidents Lockhart and Dudley made the usual “do whatever it takes” stump speeches. So markets closed up 4% today and talking heads are saying buy the dip. Of course they don’t have skin in the game. As they say in the Democratic Republic of Texas, “All hat and no cattle!” Be cautious in these volatile times. The mainstream media presents investing as entertainment. A better approach might be reading “The Battle for Stock Market Profits.” Remember, September is the worst month of the year for stocks and the low of the year is usually in October. Contact us if you have questions. If your self-directed 401k is stagnant or confusing, we can assist you. If someone you know needs help in these challenging times, please pass this email along to them. At Higgins Capital We Quarterback Money®.