Archive for the ‘Uncategorized’ Category

Will a Government Shutdown Matter?

 

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Actually, not really, although that’s very unlikely the narrative you’ll hear if it happens.

Hat tip LPL Financial

Into The Top Ten

The S&P 500 has now remained above its 200 day moving average for 284 straight days.  Now a top ten trend, one that will certainly continue in the near term.  At this week’s low the S&P 500 is still over 4% above its 200 day moving average.     

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Hat tip Charlie Bilello

To Enjoy Huge Winners

You must endure huge drawdowns.  It is inevitable, a dramatic sell off in a stock over the long haul.  Some of the greatest growth companies in the world have experienced steep declines, and survived.  Here’s a look at four examples, courtesy of Charlie Bilello:

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Apple has gained 25,217% since its IPO in 1980, an annualized return of 17%.

Incredible gains, but these are just numbers, masking the immense pain one would have endured over time. Apple investors from the IPO would experience two separate 82% drawdowns, one from 1991 to 1997 and another from 2000 to 2003.

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Amazon has gained 38,882% from its IPO in 1997, an annualized return of over 36%. To put that in perspective, a $100,000 investment in 1997 would be worth just under $39 million today.  Breathtaking gains, but they were not realized without significant adversity. In December 1999, the initial $100,000 investment would have grown to $5.4 million. By September 2001, less than 2 years later, this $5.4 million would shrink down to $304,000, a 94% drawdown. It took over 8 years, until October 2009, for Amazon to finally recover from this drawdown to move to new highs.

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Bill Gates is the richest man in the world, having amassed his $80 billion fortune as the founder of Microsoft. Microsoft has returned 25% a year over the past 30 years, a remarkable feat.  The path to riches in Microsoft looks deceptively easy on the surface. The calendar year returns from its IPO in 1986 through 1999 were incredibly high and consistent, masking significant underlying volatility. In 1987 Microsoft advanced 123% but would suffer more than 50% decline in October during the stock market crash. It would not recoup those losses for two years, until October 1989. Its largest drawdown in history occurred over a 10 year period, a 70% decline from 1999 through 2009.

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Alphabet (formerly Google) has been one of the great growth stories in recent history, returning 26% per year since its IPO in 2004.  It did not achieve these returns, though, in a straight line. Its largest drawdown: a 65% decline from 2007 through 2008.

Employing sell stops would have eliminated most of the pain but would you have been disciplined enough to re enter these stocks after getting stopped out numerous times? 

More here from Pension Partners, as always, great stuff:  www.pensionpartners.com

 

 

 

Stat Of The Day

Americans spent over $80 billion on lottery tickets last year, more than on movies, books, video games, music and sports tickets – combined.

Might have been better to put some of that money into Bitcoin:

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Bitcoin Prices… Aug 2017: $4,000

Aug 2016: $585

Aug 2015: $263

Aug 2014: $545

Aug 2013: $98

Aug 2012: $12

Aug 2011: $10

Aug 2010: $0.06

$10.00 invested in Bitcoin back in 2010 is now worth over $440,000.00

Bitcoin explained:    Bitcoin is a digital currency created in 2009. It follows the ideas set out in a white paper by the mysterious Satoshi Nakamoto, whose true identity has yet to be verified. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies. Today’s market cap for all bitcoin (abbreviated BTC or, less frequently, XBT) in circulation exceeds $7 billion.

There are no physical bitcoins, only balances kept on a public ledger in the cloud, that – along with all Bitcoin transactions – is verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity. Despite its not being legal tender, Bitcoin charts high on popularity, and has triggered the launch of other virtual currencies collectively referred to as Altcoins.

Hat tip Charlie Bilello, Investopedia.com

Lightning Strike

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Lightning strikes behind a B-52H Stratofortress at Minot Air Force Base, N.D., Aug. 8, 2017.

Hat tip strategypage.com

Heading to New York?

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Here’s a great list from Jen Reviews:  100 Things to Do in New York

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Hat tip Jenn Miller

Fighting Falcon

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Sweet pic, from strategypage.com:  Air Force Capt. David Neville, a 13th Fighter Squadron F-16 Fighting Falcon pilot, conducts a flight sortie above northern Japan, June 12, 2017. Neville and other 13th and 14th Fighter Squadron pilots joined Kadena Air Base, Japan F-15C Eagle pilots to conduct air-to-air and suppression of enemy air defense missions during an aviation relocation training. (U.S. Air Force photo/Staff Sgt. Deana Heitzman)

Hat tip Austin Bay

Voting With Their Feet

And its good news for moving companies.  Key bit:   Illinois’ surging debts, rising property taxes, weak job creation and political dysfunction continue to be a boon to large moving companies United Van Lines and Atlas Van Lines. United and Atlas offer large shipment moves across the country for households and businesses. According to 2016 shipment data released by the two moving companies, Illinois has the worst “outbound” rate for total shipments in the entire country.

The democrats in Chicago run this financial hell hole of a state. 

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And the financials for the state will certainly get much worse before they get better.  The geese that lay the golden eggs(taxes)are fleeing, en masse:

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While this is transpiring, Illinois has the highest paid state workers in the nation.  As a wise man once said “Math is hard”:

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More:  According to Census migration data, from July 2015 – July 2016 Illinois lost a record 114,000 people in net migration to other states, causing the total state population to contract by 37,500 people. The rate of people fleeing Illinois has been at all-time highs for the past three years of data, resulting in a total state population contracting for three consecutive years. The sheer magnitude of outflow should trouble policymakers in Illinois, as Illinois’ loss rate is multiples of surrounding states even after adjusting for population size, and Illinois is the only shrinking state in the Midwest.

What a total disaster…

Read the whole thing:  www.illinoispolicy.org

 

The Bezos Recession?

The extremely broad weakness in the retail sector, thanks largely to Amazon, could spark an economic downturn, the lede:   “There is a possibility that a retail collapse could spill over into the commercial real estate market—a somber second-act to the residential housing crisis that is now almost a decade in the rear-view mirror.”

More here from The American Interest:  https://www.the-american-interest.com/2017/07/17/the-bezos-recession/

Confusion Reigns

With both AAII(American Association of Individual Investors)bullish and bearish sentiment below 30 its quite clear why we are experiencing the quietest market(lack of volatility)ever.   Bull and bear sentiment below 30, which has been the case for the last three weeks, has only been this low two other times in the last 30 years.  Yes, there is a ton of investor confusion out there. 

 

HISTORICAL AVERAGE: 38.3%
BULLISH
28.2%
-1.3
Percentage point
change from
last week
HISTORICAL AVERAGE: 31.4%
NEUTRAL
42.1%
+1.6
Percentage point
change from
last week
HISTORICAL AVERAGE: 30.3%
BEARISH
29.6%
-0.2
Percentage point
change from
last week

 

Note: Numbers may not add up to 100% because of rounding.Hat tip Ryan Detrick, AAII.com

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