BMO Capital Markets’ Brian Belski is preparing clients for a stock market correction sometime in 2016.
Key bit: Belski has long been one of the more bullish strategists on Wall Street. Indeed, he continues to reiterate his long-term thesis that the market is in the midst of a multiyear-long secular bull market.
But he believes the coming year could hold one of several corrective phases that typically occur during bull markets.
Stocks could correct because investors will get nervous, Belski said. He sees concerns about higher interest rates, low commodity prices, and growth slowdowns in China and Europe contributing to the uncertainty amid “the most doubted, second-guessed, and, frankly, hated stock market rally in history.”
Hat tip BusinessInsider.com
Key bit from Zerohedge.com: For the 7th month in a row, Durable Goods New Orders fell year-over-year (down 1.0%). This has not occurred without a recession. While MoM the headline number rose 3.0% (beating the 1.7% rise expected), it appears driven by another one-off surge in Boeing plane orders as Capital Goods Shipments Ex-Air fell 0.4%. Finally, the inventory to shipments ratio re-accelerated in October, back near cycle highs.
Video Link: http://video.cnbc.com/gallery/?video=3000459350
A must see this Thanksgiving holiday season. More here from CNBC.com: http://www.cnbc.com/2015/11/24/what-am-i-thankful-for-the-next-5-minutes-joe-terranova-commentary.html
Hat tip Josh Brown
From the number two economic producing state in the country:
Massive Layoffs Are Coming To Texas
Key bit: According to an analysis by the Texas Alliance of Energy Producers, a new round of layoffs could be underway in Texas, for example. The Texas Alliance predicted that the first drop in oil prices last year would lead to 40,000 to 50,000 layoffs in Texas. But the renewed drop since the end of the summer could force many more cuts. Right now, the group is putting a conservative estimate at 56,000 job cuts so far, but they say the real tally is probably higher.
More here from BusinessInsider.com: http://www.businessinsider.com/massive-layoffs-likely-coming-to-texas-2015-11
The # 1 problem that we observe in this investing/trading game, whether it be from the smaller trader or investor to the top fund managers (that all the media sheep genuflect to even when they have taken a big hit) is the lack of hedging and or strategies to exit (mental or hard stops).
What do we find to be the cause? Ego (can’t possibly be wrong and therefore unwilling to take a small loss) and or false belief. They will search for data or opinions to confirm their desired outcome. Or as we would say on the radio show “paint a picture around the bullseye”.
What’s the cure? Have an exit or hedging strategy before you enter and have the unshakeable discipline to stick with it. Write it down if you have to or publicize that number to increase the odds that you will hold to it. Equally important is to know the number where you would sit up in your seat and re-enter.
This isn’t about constantly entering and exiting. Instead it’s about dancing with the ebb and flow of the market and not against it (smart guy that has to rationalize everything). Sometimes the music is consistent and sometimes it’s not. The market leads – you follow. No questions asked.
Always have an answer to the “What If ?”. Understanding it’s a game of probabilities and not certainties.
If you believe in your edge (confidence) and you minimize losses (sleep at night) – you will eventually succeed. If you don’t – you will eventually be toast (no matter how big you are).
It’s won with emotional discipline (ego in check) and not intellect.
Those Kool – Aid drinkers who think otherwise will preach they are long term investors (won’t commit to ever being wrong which makes up 95% of Wall Street) or are your favorite Monday morning QB’s. Both of which are weak and both of which are bullshit artists who couldn’t trade their way out of a wet paper bag.
Beers Cold and Bird Warm,
US consumer confidence:
-lowest in over a year
-first time in 2 years it’s down 2 months in a row
-biggest 2-monthly fall in nearly 4 years
More here from BusinessInsider.com: http://www.businessinsider.com/conference-board-consumer-confidence-index-2015-11