The Long Term Investor

The CHINA trade negotiations strike again to tank the DOW after a good day. The one potential problem I see with China is if they decide to try to string things along well into the election cycle. They could figure that Trump will be much more negotiable the closer to the election we get. Or in an extreme move they could string things along and than make a judgement to just bite the bullet and wait out the election results hoping for a DEM win and an easy flip back to the old status quo where they could push us around with impunity as usual.

I HATE.....HATE....HATE....these late day fades. BUT, on the positive side the stock side of my portfolio model was UP +0.4% for the day versus -0.01 for the SP500. I guess I should be thankful and take any positive result that the markets are willing to give me.

 

NOTHING wrong with being SELFISH when it comes to your life and especially your investing. WE ALL need to have one single clinical focus when it comes to money management and investing......FAMILY. First yourself and spouse, second children, third extended generations.

HOPEFULLY we will see a fade of the negative open as the day goes on. We continue to bounce back and forth above and just below 26,000 on the DOW and approaching than pulling back a little from all time highs on the other averages. GENERALLY a healthy process. To put it in OLD terms we are consolidating and back-filling right now and this will set up the next round of gains, and perhaps EXPLOSIVE move up. We are also fighting the constant news cycle, the constant blabbing of the FED, upcoming earnings and in general the extreme SKITTISHNESS on the part of short term thinkers.

My view of the markets is that EVERYTHING happening right now reflects the very SHALLOW and fragile nature of the markets. I suspect that what we have been experiencing is the NORM now, reflecting the changes we are seeing in population and society that will ESCALATE over the next years. We have a BIG bunch of the population that is basically regularly investing, mostly passive, through the 401K system. Those that are investing outside the 401K model and other retirement investing models, in my opinion, tend to be more short term oriented and much more erratic. I suspect, but have not seen any data, that very few people today have a TAXABLE brokerage account that they use for LONG TERM INVESTING. In the OLD DAYS, it was very rare for people to invest in any fashion in funds or stocks. Now the percentage of the population that invests in funds and stocks in some form is much higher. In my opinion, this democratization of investing by the masses drives much of the erratic day to day behavior we see in the markets with daily news items and other fluff jerking the markets around.

 

There is not much you can do when the markets in general are DETERMINED to go down as they were today. At best you can hope that what you hold will buck the daily trend. That is what happened to my stock component of my portfolio model today. My stocks were positive again beating the SP500 for the day. (as they did yesterday) My stocks....+.34%.....the SP500...(-.29%). NICE and I will take it, but a one day gain like this, going against the majority trend, is just random chance.

For those interested in AI and stock picking here is a little article discussing the future of active human management using the various analytical AI tools.

Robots Won’t Kill the
Fundamental Investor

https://www.institutionalinvestor.c...5c/Robots-Won-t-Kill-the-Fundamental-Investor

 

HERE is the important PSYCHOLOGICAL factor going forward for the rest of 2019. Looks like the FED has cleared the decks and given a full sail ahead signal for the rest of the year. If they stick to their action today, it will be nice to have 9 months of investing with NO Fed rate increases and soon an end to their balance sheet shenanigans. As to INFLATION........they dont really see any and reading their release it seems clear to me that they are more concerned with the potential for deflation. As to the rest of the world (I am leaving the FED now), in my opinion the financial and economic problems that the rest of the world is experiencing now is a CONTINUATION of the 2008/2009 issues and is a CLASSIC deflationary situation. About the ONLY country that had a significant economic and financial recovery from the 2008/2009 crisis is the USA. The rest of the world is still stuck in the same old mud hole they have been stuck in for years. CONSIDERING their Socialistic policies, DUMB government stimulus programs, high taxes, government directed and oriented economies it is little wonder they are failing to show real economic strength.

I find it REALLY DUMB when people hold out European countries as a model for the USA to follow.

Fed holds interest rates steady after meeting, signals no hikes in 2019

https://www.usatoday.com/story/mone...d-rates-steady-cut-forecast-hikes/3217128002/

(BOLD is my emphasis and what I consider important content in the FED actions today)

"WASHINGTON - Citing a more modest outlook for the economy, the Federal Reserve on Wednesday held interest rates steady and signaled it did not plan to raise rates at all this year and would bump them up just once in 2020, providing a road map for a sustained period of easy-money policy.

"The U.S. economy is in a good place," Fed Chairman Jerome Powell said at a news conference, adding policymakers foresee "a modest slowdown, with overall conditions remaining favorable. We see no need to rush to judgment (by lifting or cutting rates)."

The move comes after the central bank repeatedly has telegraphed its plan to scale back rate hikes in 2019 in the face of a U.S. and global economic slowdown, and markets that have shown no tolerance for higher borrowing costs in that environment.

But a two-day meeting that concluded Wednesday provided the Fed its first opportunity to trim its fairly upbeat December forecasts for the economy and rates. The Fed also announced that it will end a campaign to shrink its $3.8 trillion balance sheet later this year, a move that should help keep a lid on long-term rates.

As expected, the Fed kept its key short-term rate at a range of 2.25 percent to 2.5 percent. After holding rates near zero for years after the Great Recession ended in 2009, the central bank has lifted rates nine times since late 2015, including four times last year, as the economy has strengthened. The increases have bumped up rates on credit cards, certain mortgages and auto loans while providing higher rates on banks savings accounts after years of paltry returns.

But those rates are now expected to remain fairly stable through next year, if the economy cools, as Fed policymakers expect.

In December, after the Fed downgraded its forecast from three hikes to two in 2019, markets sold off on the belief that blueprint was still too aggressive amid slowing growth in Europe and China, the U.S. trade war with China, and the fading effects of federal tax cuts and spending increases.

With plunging stocks hammering consumer and business confidence and inflation subdued, Fed Chairman Jerome Powell and other policymakers made an abrupt turnabout, saying the Fed will be “patient” as it weighs future hikes. The broad stock market in turn, has rallied, though it remains below its late September peak.

How fast rates will rise
The Fed cut its forecast from two hikes this year to none. It expects one hike in 2020. Policymakers estimate the benchmark rate will remain at 2.4 percent at the end of 2019 and rise to 2.6 percent in 2020, down from 2.9 percent and 3.1 percent, respectively, in their December estimate.

Before Wednesday’s release, Fed fund futures markets were predicting no hikes this year, according to CME.

The balance sheet
Since October 2017, the Fed gradually had been shedding the $3.5 trillion in Treasury bonds and mortgage-backed securities it purchased after the financial crisis to lower long-term rates and spur growth. As a result, the Fed’s total asset portfolio has fallen to $3.9 trillion from a peak of $4.5 trillion.

Rather than sell the bonds, the Fed largely has stopped reinvesting their proceeds as they mature. As much as $50 billion a month in assets have rolled off its balance sheet, draining that amount of cash from the banking system and putting some upward pressure on long-term rates.

The Fed said Wednesday that in May it will put a stop to that initiative. It will reduce the amount of Treasurys that comes off its books from up to $30 billion a month to up to $20 billion and halt the roll-off of the assets in September. And it will reinvest up to $20 billion in monthly mortgage bonds in Treasurys starting in October.

The moves should lower the Fed’s balance sheet from about $3.9 trillion to about $3.5 trillion, well above the $3 trillion dollars previously anticipated. But the mix of assets will skew more toward Treasuries, reducing its supply of mortgage bonds and providing less support for lower mortgage rates.

Policymakers have said that leaving extra cash in the financial system will better allow the Fed to control interest rates and banks to meet requirements for higher capital buffers in the wake of the financial crisis.

Yet the bigger portfolio also should translate into slightly lower long-term rates during a period of economic uncertainty.

Economy
The Fed said “economic activity has slowed from its solid rate in the fourth quarter.” Many economists expect growth of just 1 percent to 2 percent in the first quarter, largely because of the partial government shutdown.

The central bank estimates the economy will grow 2.1 percent in 2019, down from its prior 2.3 percent forecast, and 1.9 percent in 2020, below its previous 2 percent projection.

Juiced by the federal stimulus, the economy expanded by 3.1 percent last year, its best showing since 2005.

While a second-quarter rebound is expected, the economy is likely to slow later this year as the effects of the $1.5 trillion tax cut and $300 billion in two-year spending increases peter out.

Lately, the economy has been mixed. Retail sales fell sharply in December and only partly rebounded in January. Manufacturing has softened amid the overseas troubles but the service sector has strengthened.

Jobs
While job gains were meager in February, the Fed said they “have been solid, on average, in recent months, and the unemployment rate has remain low.”
With the economy slowing, the central bank raised its estimate of the unemployment rate at the end of this year to 3.7 percent from 3.5 percent. It expects the unemployment rate to tick up to 3.8 percent by the end of 2020, above its December forecast of 3.6 percent.

Employers added a robust average of 223,000 jobs a month last year, but many analysts expect average gains to fall to about 160,000 this year as the economy downshifts and the low unemployment rate makes it harder to find workers. Workers shortages helped boost average annual wage growth to a nine-year high of 3.4 percent in February.

Just 20,000 jobs were added last month – a poor showing that largely has been chalked up to weather effects but may also reflect a slowdown in hiring.

Inflation
“Overall has declined (over the past year), largely as a result of lower energy prices,” the Fed said. Gasoline prices generally have fallen in recent months

The Fed expects its preferred measure of annual inflation to rise from 1.7 percent to 1.8 percent by year-end and 2 percent for 2020, below its December forecast of 1.9 percent and 2.1 percent, respectively.

And it kept its estimate of a core reading that strips out volatile food and energy items at 2 percent over the next three years – right at the Fed’s target -- up marginally from the most recent reading of 1.9 percent.

Inflation has been surprisingly tame in light of the faster pay increases that businesses were expected to pass to consumers through retail prices. Many economists expect inflation to continue to be tempered by cheap oil and long-term factors such as discounted online shopping.

What it means
The Fed revised down its estimates for the economy and rates this year to align with its recent views of a slowing global economy and volatile financial markets. It’s also taking a market friendly step of leaving its balance sheet at a higher level.

At the same time, policymakers are aiming for a delicate balance by sending the message that the economy and labor market remained on solid footing.

The economy is in limbo. Economist Ian Shepherdson of Pantheon Macroeconomics expects a U.S.-China trade deal and an improving Chinese economy to bolster US growth and prompt the Fed to raise rates twice this year. But Michael Pearce of Capital Economics believes a weakening economy will force the Fed to cut rates by early 2020."

MY COMMENT

It is TELLING that the ten year treasury and other treasury rates have drifted down and are still WELL BELOW historic levels. EVEN the flurry of rate increases had no ability to drive up treasury rates with the ten year treasury right now being at a yield of 2.524% (YIKES). YES......there is no inflation. CONTRARY to the article there is ABSOLUTELY no upward pressure on interest rates. In fact rates reflect the deflationary environment that continues to be a shadow on the economy of the USA. Likewise, rising wages have had no inflationary impact to date. I hope the FED takes its own advice and leaves hands off the economy for the rest of the year and 2020 as well. They need to let the economy run as it wishes and hopefully avoid getting us into a Japanese style soft deflationary depression. It is little wonder why the English Heritage nations tend to be the most economically successful nations in the world now and for the past many decades. These are the countries in the world that follow the most capitalistic economic model. (Canada, USA, Australia) (on a lesser level Great Briton, India)

 

I am posting this complex little article since it deals with LONG TERM INVESTING. I do not PERSONALLY advocate or suggest what is in the article. To me it is way too complex of a model. I also do NOT like the International exposure or emerging markets. It also seems to me that there is potential that this model is simply playing with statistics and hindsight. BUT I will leave it to readers to decide if this is something they might want to use in part or in full. For those that CRAVE complexity......

The ultimate buy and hold strategy: 2019 update

https://www.marketwatch.com/story/t...-20?mod=mw_theo_homepage&mod=mw_theo_homepage

MY COMMENT:

If it was me, as usual, I would simply use the SP500 as my long term investment vehicle for ALL FUNDS. If I wanted a more broad exposure to mid and small cap I would use a Total Stock Market Index instead. From what I have read, investing in either as a long term vehicle produces just about the same result. So if you are looking for a SINGLE investment for ALL funds for the long term my pick would be either all in a SP500 Index Fund OR all in a Total Stock Market Fund. Some people might think that the Total Stock Market Fund gives them more diversification and safety since it gives exposure to the small and mid cap areas of the market plus the large cap side of things. Myself, I prefer the SP500 with the exposure it gives me to the 500 largest businesses in the USA. I prefer the safety that the established, large cap, dominant business, dividend paying companies in the SP500 give. BUT......since the performance of either Index is about the same, it is simply personal preference.

 

HERE is a very nice little article to go along with the post above, on the topic of using the SP500 versus using Total Stock Market as a long term investment vehicle:

(BOLD is my emphasis, opinion of important content)

Total U.S. Stock Market Vs. The S&P 500 Index - An Investor's Guide

https://www.forbes.com/sites/robert...sp-500-index-an-investors-guide/#153897f42fd0

"My asset allocation includes a healthy dose of large U.S. companies. I'm sure most portfolios do as well. The question that often arises for index fund investors is whether to use a total U.S. stock market fund or an S&P 500 index fund.

In my current portfolio, I have the Vanguard S&P 500 Index Fund (VFIAX). Recently, I've started to wonder if I would be better served by Vanguard's total U.S. market index fund (VTSAX).

Having spent more time than I care to admit considering this question, I've come to several conclusions:

1. The difference between the two approaches is important
2. Which approach is best for a given investor depends on the makeup of their portfolio;
3. For me, I'll be sticking with the S&P 500 index.

Total Market Vs. S&P 500

Let's first examine the differences between these two approaches. I'll be using the Vanguard funds noted above for my comparison, although many fund companies offer comparable funds and ETFs.

That's not to say that the S&P 500 doesn't include some relatively smaller companies. According to Morningstar, 13% of the fund is invested in mid-cap companies.

The S&P 500 index is considered a "blend" fund. It's a combination of companies that are either growth or value. Ford would be an example of a value company, Amazon a growth company.

In contrast, a total U.S. stock market fund captures all of the publicly traded companies, big and small. It invests 18% in mid-cap companies and 9% in small-cap, according to Morningstar. Its average company valuation is about $49 billion, a significant decrease from the $86 billion of the S&P 500. It's also a blend fund.

While the S&P 500 index fund invests in approximately 500 companies, the Vanguard total market fund invests in more than 3,500.

How Does Performance Compare

The difference in performance doesn't seem significant at first glance. A $10,000 investment ten years ago in both funds would have grown to $19,845 in the total market fund and $19,543 in the S&P 500 index fund. Because both of these funds are market cap weighted (the funds invest a larger percentage of assets in higher value companies), there is a lot of overlap between the two funds.

Yet a 9% weighting in small-cap stocks for the total market fund is notable. Add to it a greater weighting in mid-cap stocks, and its slight outperformance confirms to expectations based on historical data. For long-term investors, even a small improvement in returns can translate into significant wealth.

How to Choose

We should resist the urge to write-off the difference as insignificant. If we want U.S. equity exposure in our portfolio, we'll need to decide. Over decades of investing, even a small difference in returns adds up.

One might simply choose the total market fund. If we expect it to earn slightly more than an S&P 500 index fund, why pick the underperforming fund? I think there may be a good reason to pick the S&P 500 index fund. But first, let's look at when the total stock market fund makes more sense.

For those that favor simplicity and want a single fund for their exposure to U.S. equities, a total stock market fund is the clear winner. In one fund you'll get exposure to large, mid and small-cap stocks. The exposure to smaller companies should add to your returns in the long run with minimal increases in volatility. For you number crunchers, the standard deviation of returns for the two funds is very close: 10.37 (S&P 500) to 10.66 (Total Market).

Some prefer to allocate their U.S. equities in a more precise manner. I seek exposure not only to small companies but also small value companies. As a result, I use more than one fund to capture the U.S. market. This approach is similar to Paul Merriman's Buy and Hold Strategy. In this case, the S&P 500 fund is more appropriate. You'll get small, and if you want, mid-cap exposure in separate funds.

By isolating your small company stocks in separate funds, it makes managing the portfolio much easier. It also allows you to be more precise with your allocation. You no longer have to rely on or keep track of the market cap exposure of a total market fund.

My portfolio favors small companies and value. As a result, my U.S. equity exposure is comprised of the S&P 500 index fund, a Vanguard small-cap value fund, and a Vanguard U.S. REIT fund.

In the final analysis, both the total market and S&P 500 index are reasonable approaches to capturing the U.S. equities market. The best option for an investor depends on their specific portfolio construction."

MY COMMENT:

As I said in my post above, I prefer the SP500 if I was doing an all in one long term investment. I ALSO PREFER the SP500 as one of the three funds in my portfolio model (SP500 Index, Dodge & Cox Stock Fund, and Fidelity Contra Fund). I believe the LARGE CAP (SP500) side of the market provides a little bit more safety from economic turmoil as well as more reliable dividends. ALSO, I subscribe to the view that I WANT TO double up on the stocks in my portfolio and the fact that many of them are significant holdings in the WEIGHTED SP500 Index. The fact that many of the stocks I own are a significant holding in the SP500 is VERY intentional.

 

I am a long term, life long, fully invested all the time for life person, in stocks and funds. BUT...I do segregate my net worth into various pots of money. First is of course my PORTFOLIO MODEL (see prior posts for portfolio). This is obviously my stock market money that is fully invested all the time as discussed in this thread.

Second is my income money for life. This is composed of various INCOME ANNUITIES and Social Security. These two items provide a lifetime income for myself and my spouse that allows me to AVOID touching my stock market money for living expenses.

Third is various art and other hard personal property assets that serve as somewhat of an inflation hedge if needed and at the same time allow for personal satisfaction and enjoyment.

My forth financial component is real property. For me that is simply a paid off home. In my opinion home ownership is important to diversify a persons financial life and assets and is critical to balance out the focus on stocks and funds. It also somewhat serves as an inflation hedge and as time goes by serves to stabilize living expenses if you can avoid the temptation to use your home as a piggy bank and be a victim to ever increasing home payments as a result.

HERE are two views on where we are headed in terms of the housing market right now. I tend to believe that the more optimistic account is more accurate. I am AMAZED that I still see the MILLENNIAL thing about them not buying homes touted over and over in the media. From what I see this is pure BALONEY. I see the MILLENNIAL generation following the same path as every generation before. They start out in apartments or rentals often with roommates, often in the city. As they get married and especially when they start to have kids they move to the burbs. I have seen this path followed by at least 20-30 of my kids and their friends. As time goes by I think we will see that this BS about "experiences" is just that BS.

All Signs Point to a Housing Boom Ahead
Just as many millennials enter their home-buying years, the labor market is strong and interest rates are low.

https://www.bloomberg.com/opinion/a...-be-next-market-lifted-by-the-fed-s-low-rates

AND the opposite view:

Opinion: 9 reasons why the housing market risks hitting a perfect storm

https://www.marketwatch.com/story/9...rket-risks-hitting-a-perfect-storm-2019-03-22

MY COMMENT:

Take your pick. BUT do so at your own risk.

 

As to the markets and their week ending mini-drama well........thanks to the fear mongering media and the very shallow bull market we saw a little drop yesterday. Personally, I see nothing other than a normal market and normal market reaction to the out of control, breathless, fear mongering, marching in lock step media pushing the financial story of the day. The financial media lurches around from day to day like a drunken idiot from positive to negative. Reminds me of the painting "The Scream".





Here is one take on yesterday:

Dow plunges 460 points on global growth fears

https://www.foxbusiness.com/markets/us-stocks-wall-street-march-22-2019

MY COMMENT:

Yesterday I hear the USUAL blather in the media. The dreaded yield inversion superstition was being pushed again. This indicator in my opinion is nothing more than superstition and hardly shows any correlation at all to anything. Recession happens.....sometimes.....after an inversion, other times not. Sometimes it is a year later, sometimes never, sometimes two or three years later. TOTALLY meaningless.

As to GLOBAL FEARS. WELL WAKE UP. The world has been in a big financial mess for the past 9 years. Most countries NEVER recovered from the 2008/2009 financial banking crisis and have been in a deflationary economic event ever since. I dont see anything different with the economic situation of most countries right now. It is NOT like the world recovered and was booming and is now slipping into issues. Itlay, Greece, France, etc, etc, are in the same mess thay have been in for the past 8-9 years. The only thing that changes month to month or year to year is the amount of media coverage of their situation. It is little wonder, they are ALL still in the process of trying to use government control and government stimulus to drive their economy. AS USUAL, a fools errand. What makes a thriving economy is free markets, lower taxes, less government regulation, etc, etc. ALL of which are in short supply in most countries around the world. One reason for the lower interest rates at the longer end of the treasury spectrum right now is the world wide demand for the safety of long term (ten year and out) treasuries. WE are the SAFE HAVEN for the world. So, we have the very short treasuries rates driven up and held up by the Fed and the longer rates basically being set by the world and demand and the free market. In my opinion that is the simple reason for the current flirting that we see with yield inversions.

 

ONE FINAL post for the moment. NIKE, (NKE) yesterday experienced the USUAL earnings reaction by the breathless financial media and schizophrenic stock investors that we constantly have seen over the past year or two. AS USUAL, I see much positive in their earnings report. BUT the NEGATIVISTS (not a real word?) reacted as usual. Here is some info:

(BOLD is my emphasis and opinion of important content)

Nike shares fall after North American sales growth disappoints

https://www.cnbc.com/2019/03/21/nike-reports-third-quarter-fiscal-2019-earnings.html

"Key Points

• Nike’s third-quarter earnings beat Wall Street expectations.
• Revenue matches analysts’ estimates.
• North American sales disappoint, as Nike’s momentum continues overseas.

Nike shares tumbled Thursday following the sneaker maker reporting weaker-than-expected sales in North America during its fiscal third quarter, hurt, in part, by fewer people buying Converse-branded merchandise.

Although its earnings topped analysts’ expectations, and total revenue was in-line with estimates, Nike shares sunk more than 4 percent after the bell on the news. The stock had closed the day at a record high of $88.01.

Here’s what Nike reported for its fiscal third quarter compared with what analysts were expecting, based on a poll by Refinitiv:

* Earnings per share, adjusted: 68 cents vs. 65 cents expected
* Revenue: $9.611 billion vs. $9.612 billion expected

“Our business momentum is being accelerated by our ability to scale innovation at a faster pace and expand new digital consumer experiences around the world,” CEO Mark Parker said. The company also called out “continued momentum in China,” a geography it’s said it’s still “bullish” about despite uncertainty about tariffs.

“We have great momentum in China, but we are still far from realizing the long-term opportunity in this market,” CFO Andy Campion told analysts.

Nike reported net income of $1.1 billion, or 68 cents a share, compared with a net loss of $921 million, or a loss of 57 cents per share, a year ago. Earnings per share came in 3 cents ahead of analysts’ expectations, based on a survey by Refinitiv.

Revenue was up 7 percent during the quarter to $9.611 billion from $8.984 billion a year ago. That was about in-line with what analysts had expected. It marked the first time in six quarters, though, that Nike didn’t top expectations.

Within that, sales at the Converse shoe brand were down 2 percent to $463 million, primarily driven by declines in the U.S. and Europe, the company said.

In North America, sales were up 7 percent to $3.81 billion, excluding currency changes. That was softer growth than what some people had expected. Telsey Advisory Group analyst Cristina Fernandez was calling for North American sales to be up 10 percent during the third quarter.

In Europe, the Middle East and Africa, sales were up 12 percent, excluding currency changes, Nike said. In China, revenue climbed 24 percent. And in Asia Pacific and Latin America, sales grew 14 percent, as Nike’s business continues to grow more overseas than in the U.S., which remains saturated with competition from the likes of Adidas, Under Armour and Vans.

Nike said its digital business surged 36 percent, as it continues to invest in online initiatives like its mobile app and customization options for customers. The company said shoppers using its Nike retail app to shop average 40 percent higher sales than those people who don’t.

It added traffic and sales through its “Snkrs” app — which sells limited-edition shoes using collaborations with athletes, celebrities and universities — climbed triple digits during the quarter.

Hoping to keep building momentum for its brand, Nike’s focus has shifted from its wholesale partners to now selling as much as it can directly to consumers, through its own stores and website. That’s evidenced by Nike’s recent store openings, which include a high-tech flagship location in New York on Fifth Avenue, and a new smaller-format store it’s testing in Los Angeles. Nike’s online business, meanwhile, has been strong as long as the company has innovated with new products — like the Air Max 720 and the Epic React Flyknit 2 — and exclusive launches that drive traffic to the website.

“The innovation pipeline is full at Nike and it gives us great confidence that we’ll continue to win with the consumers for years to come,” Parker said.

Looking for pockets of growth, Nike has said it plans to invest more in apparel — for both men and women — and women’s products in the future. For female customers, it’s launching more items like yoga pants and sports bras in expanded sizes.The company said, as of the third quarter, its Jordan business for women is growing at a double-digit rate, and women are “embracing the sneaker culture more and more every day.”

“The women’s business is over-indexing our men’s growth,” Parker said. “And we see ... tremendous opportunity moving forward. ... We’ve had [a] real strong response to the Nike yoga collection.”

Nike is, meanwhile, expected to have benefited as rival sneaker maker Adidas’ North American sales growth has decelerated. Adidas has said it will face “supply chain shortages” in 2019, as it’s struggling to come up with new styles that pique customers’ interests.

“We foresee continued share erosion [at Adidas] due to Nike’s superior product platform,” Jefferies analyst Randal Konik said ahead of Thursday’s report.

One cloud hanging over Nike ahead of Thursday’s results: The company was caught up in controversy recently when Duke University star basketball player Zion Williamson blew through his Nike sneakers during a basketball game and sprained his knee. Nike shares fell following the debacle. The company responded by sending a team of sneaker designers to Duke in North Carolina, and then to China, to make a new shoe for Williamson, who has since returned to playing basketball after having to sit out some games with his injury.

But there was no mention of Williamson during Thursday’s earnings conference call.

Nike did say it repurchased 9.8 million shares, worth $754 million, during the quarter.

As of Thursday’s market close, Nike shares are up more than 30 percent over the past 12 months. The stock has climbed nearly 18 percent just this year."

MY COMMENT

A GOOD earnings and future forecast in my opinion. There was a slight blip in one product line..CONVERSE shoes..YAWN. Of course this did not satisfy one or more of the ANALYSTS......WOW, who cares. We continue to be in the environment of nit-picking earnings with a fine tooth comb and throwing the baby out with the bath water. ( Is that enough "old" sayings for you in one sentence?) I am COMPLETELY satisfied with this earnings report and see a STRONG future short term and long term for this company. I am ESPECIALLY satisfied with the continued weakness in their main rival ADDIDAS with their market share erosion, sales growth deceleration, and supply chain problems. I continue to hold this stock and be fully invested for the LONG TERM as usual in my typical Portfolio Model.

 

HERE is an interesting chart from the source below:

https://www.zerohedge.com/news/2014-07-31/214-years-sovereign-defaults-one-chart

MY COMMENT:

For those that FREAK OUT when the media starts talking about some country defaulting......well it happens all the time. Look at the chart above from the 1975 to 2014....basically the right hand two rows of the chart. See ALL those defaults over the past 40 years. Remember any of them? Remember being impacted by any of them? Even RUSSIA defaulted twice in there. It happens all the time. In addition GLOBAL GROWTH ISSUES happen all the time and usually are meaningless to this country.......UNLESS people freak out about something that happens often.

 

I SEE that the YIELD CURVE BALONEY is now out of the headlines, having been the BIG news item for all of ONE day. As anyone that reads this thread knows, I just think this is one big superstition and nothing more than a self fulfilling prophesy, if even that. Any indicator that takes an average of a year to come true, if ever, is fantasy hindsight. I will accept one thing....that an inversion is an indicator that the FED is STUPIDLY playing with interest rates in a way that is destructive to the economy. I will admit that the yield curve might have some predictive aspect for showing that the FED is, in their usual DELUSIONAL fashion, driving the economy toward recession.........a year later......if they KEEP UP whatever IDIOTIC policy they are pursuing at the time. In my opinion the yield on short treasuries is so ARTIFICIALLY driven by the FED it has no actual connection to economic reality or demand in the free market. the actions of the current FED to stop raising rates and to seem to have some RECOGNITION of the damage they were doing to the economy is a promising sign that to me indicates that we are not on the verge of recession.

Don't Panic Over Inverted Yield Curve; Here's The Key Chart For Dow Jones

https://www.investors.com/news/economy/inverted-yield-curve-dont-panic-copper-prices-key-dow-jones/

The yield curve inverted — here are 5 things investors need to know

https://www.marketwatch.com/story/t...-22?mod=mw_theo_homepage&mod=mw_theo_homepage

MY COMMENT:

From one of the articles above I believe this is the key quote:

"The main takeaway from the inverted yield curve is that the Fed erred in hiking interest rates in December 2018, as should have been clear at the time. If the Fed were to immediately cut rates by a quarter point, then the yield-curve inversion would disappear. While the inverted yield curve probably does signal that the risk of recession is rising, it's not a given. Global central bank bond buying, low inflation, and negative interest rates in Japan and now Germany are among the factors that complicate the typical yield-curve analysis."

NOT because of the yield curve language that I generally agree with but because of the part that I have outlined in BOLD. This DEFLATION problem, being on the edge of a deflationary depression, is the key issue with countries outside the USA since the 2008 collapse. UNLESS we see significant change in things like tax rates, needed tax cuts, regulation reform, government interference with free market capitalism, Socialism, the nanny welfare state mentality, political correctness, globalism, etc, etc, etc, the countries of the EU in general and much of the world will just linger on as they have been doing for the past ten years. We know from history and Japan that a deflationary problem can linger for decades and decades. This IDIOCY is one reason I CHOOSE to NOT invest outside the USA.

 

WELL......another one of those days. Stocks in my Portfolio Model......+.04%. SP500 was negative -.08%.

HERE is where we are as of this moment in time:

DOW year to date +9.39%
SP500 year to date +11.63%

Here is what some are saying today. NOT that this sort of short term, arm chair analysis, means anything in the long term:

S&P 500 Outlook: Dark Clouds Forming Over US Markets

https://www.dailyfx.com/forex/marke...look-Dark-Clouds-Forming-Over-US-Markets.html

Dow Recovers After Brutal Plunge as Recession Fears Weigh on Stock Market

https://www.ccn.com/dow-extends-brutal-plunge-as-recession-fears-pummel-stock-market

MY COMMENT:

AMERICAN treasuries continue as the GOLD STANDARD around the world for those worried about their future and the economy of their country. AMERICAN stocks and funds continue to be the bright spot in the world. AMERICAN, big cap, dividend paying, stocks, in light of the current low short term and long term rates, are NOW once again the premium return vehicle in the world. LOVE IT.

 

HOW is it even REMOTELY POSSIBLE that the DOW is up over 200 points at the open today? After all, yesterday, Asian markets sank. AND, Europe is a no growth zone. AND global growth is slowing. BLAH, blah, blah.... Weird that the markets seem to be disconnected from the daily news. ACTUALLY, what passes as daily financial news is like everything in the media right now, SIMPLY OPINION. AND....that opinion is often driven by some personal agenda, or bias. NOT to get ALL POLITICAL....but...have you been sitting around for the past two years believing what you have been hearing 24/7 on CNN, MSNBC, and the majority of other media sources about......."COLLUSION"? Well that is fine, that is politics. As I have said in the past I am a LIBERTARIAN. BUT....BUT...BUT...I NEVER allow my politics or views to get in the way of seeing REALITY. The past couple of years are a TOTAL and ABJECT LESSON in media behavior and the fools that either trust the media or get suckered by the media. This should be a STARTLING lesson to any and all investors:

1. You can not trust what you read or hear in the media. EVER. Those days, if they ever existed, are long gone.
2. The data and information is out there from original sources, find it for yourself and use it.
3. Never get sucked into the herd behavior.
4. Dont get carried away by emotion.
5. Dont let your personal views cloud your reasoning ability.
6. Dont let your personal views cloud REALITY.
7 You can not trust what you read or hear in the media. EVER. Those days, if they ever existed, are long gone.

(THERE, I am sure I have now JINXED the markets and they will tank today)......YES, one more little lesson....Dont believe in investing superstition or foolishness like "jinxes" when investing. I remain fully invested for the LONG TERM as usual. GOOD LUCK today investors.

 

To CONTINUE my theme above. Here is a very relevant article that mostly reflects my opinion.

10 Years of Slow Growth Fears
In our view, this bull proves stocks don’t need a roaring economy to climb.

https://www.fisherinvestments.com/en-us/marketminder/10-years-of-slow-growth-fears

(BOLD is my opinion and view of important content)

"Growth slowdown fears appear omnipresent these days as investors worry this long global economic expansion is on the wane. But slowish growth isn’t a bull market killer—as stocks’ overall rise over the last decade attests. Rather than halting this bull, we think slowdown fears have helped it grind higher—and likely keep doing so this year as reality generally exceeds overly dour expectations.

A host of headlines declare 2019 will be a year to forget for the global economy:

• “Global Economic Slowdown Looms, Exposing Outgunned Central Banks”
• “Global Markets Take Fright as Fears of a Slowdown Intensify”[ii]
• “A Growing List of Companies From FedEx to BMW Are Warning About the World Economy”[iii]
• “Global Slowdown Is Becoming More Intense—and No One Knows Why”[iv]

Supranational organizations like the IMF, OECD and ECB have also chimed in by cutting growth forecasts, citing risks like tariffs, European export weakness, soft Chinese demand and a potential no-deal Brexit. If the world economy is headed for some rough terrain, the argument goes, stocks will surely follow suit. But we see some holes in this logic.

For starters, surprises move stocks most—and these fears aren’t new. Growth during this expansion has been relatively slow, fueling recurring worries about the economy’s health. In the financial crisis’s aftermath, many fretted the recovery would be L-shaped, or a double-dip recession awaited, or growth would stall and never reach “escape velocity,” or unresolved crisis-era issues would soon resurface, or once this or that artificial sugar high was past, a grim economic reality would reassert itself. Later, folks turned to bemoaning “secular stagnation”—a theory arguing growth would be permanently lower than its historical average. Most presumed slower growth, however we got it, carried dire implications for stocks. Meanwhile, overall and on average, global markets rose. (Exhibit 1) If anything, we think all the handwringing has helped prolong the bull by delaying the euphoria typifying market peaks.

Exhibit 1: Global Stocks Rise Despite Slow Growth Worries

Source: FactSet, as of 3/21/2019. MSCI World Index with net dividends, 3/9/2009 – 3/20/2019.[v] There are dozens and dozens and dozens more headlines we could have included, but we are told white space is good and it is already sparse here.

In our view, Exhibit 1 also illustrates why staying disciplined can be so difficult for investors. Despite rising 277% from the bull’s start to date, global stocks have endured plenty of volatility along the way—including 8 corrections (short, steep, sentiment-driven drops typically not exceeding -20%).[vi] In conjunction with a drumbeat of headlines bemoaning slow growth, this likely spooked many. Yet seeking shelter outside of stocks could have meant missing a big chunk of this bull market—especially since we don’t recall hearing an all-clear signal announcing the global economy was on firm footing at last.

We see several takeaways for investors. First, stocks don’t need gangbusters growth to rise. Rather, they move on the gap between reality and expectations. Slow growth beating expectations for even slower growth or contraction qualifies as a positive surprise—fuel for stocks. Dour forecasts of weakness ahead aid this process by lowering the bar for reality to clear.

Second, while people fixate on GDP, it doesn’t measure the same thing as stocks. The latter reflect investors’ expectations for publicly traded companies’ future earnings. GDP, on the other hand, is a rough estimate of a country’s economic output during a given time period, including the private and public sectors—quite different and inherently backward-looking. By the time it emerges, efficient markets have moved on to assessing corporate fundamentals over the next 3 – 30 months or so.

Moreover, economics isn’t the only thing driving stocks. Politics and sentiment matter, too. Modest growth, low political risk and not-too-hot expectations are a bullish recipe—and a pretty good reflection of where we stand today, in our view. Presently, investors fixate on trouble spots and recession risks. While both exist (as they nearly always do), we see positive fundamentals, too—like gridlocked governments around the developed world, a positively sloped global yield curve supporting lending and money supply growth, Chinese stimulus gradually kicking in (with likely global implications) and solid corporate revenues. These get little attention, however—evidence of sentiment’s low ebb. Hence, we think this bull market probably persists a while longer even if growth doesn’t surge."

MY COMMENT

I have posted a number of FISHER articles and observations. I DO NOT subscribe to their content or follow them. I simply tend to run into their articles in my daily reading and they tend to often correspond to my personal opinion. That is why I post ANYTHING. BECAUSE it corresponds to what I think is important.

 

I OBVIOUSLY dont plan the course of this thread. It is random, daily, stream of consciousness, based on my daily reading. BUT to continue my recent themes:

1. The danger of deflationary depression that we see world wide following the 2008 near banking and economic collapse.

2. The yield curve inversion MANIA and delusion.

3. China trade, global slowing and other media fear mongering.

HERE are a couple of relevant articles some of which I agree with some of which I dont.

Stock market often produces strongest returns after yield curve inverts: JPM’s Kolanovic

https://www.marketwatch.com/story/s...pms-kolanovic-2019-03-26?mod=mw_theo_homepage

(BOLD is my opinion and what I consider important content)

"One of Wall Street’s top quantitative analysts was the latest to weigh in on the inversion of the yield curve, reminding investors Tuesday that the phenomenon, while viewed as a reliable recession indicator, also tends to signal a period of strong returns for the stock market.

“Historically, equity markets tended to produce some of the strongest returns in the months and quarters following an inversion. Only after [around] 30 months does the S&P 500 return drop below average,” said Marko Kolanovic, global head of macro quantitative and derivatives research at J.P. Morgan, in a Tuesday note (see chart below).



The yield curve typically slopes upward. An inverted curve is often viewed as a sign investors see slower growth ahead, warranting lower rates. Moreover, inversions of the yield curve have proven to be a reliable recession indicator, preceding contractions by a year or more. Researchers at the San Francisco Fed say the 3-month/10-year curve is the most reliable indicator, while Cleveland Fed researchers note that inversions of that measure have preceded the past seven recessions with only two false positives — an inversion in late 1966 and a very flat curve in late 1998.

But while the curve’s move into inversion territory appeared to spark selling, market watchers have also issued numerous reminders that such moves typically don’t spell immediate doom for equity markets. In a Monday note, Tony Dwyer, chief U.S. markets strategist at Canaccord Genuity, noted that while an inversion is a recession predictor, “it is a better buy signal than pointing to a time to get sustainably defensive.”

In his note, Kolanovic looked at the path markets took after the first instances of a 10-year-3-month inversion in 1978, 1989, 1998 and 2006. He acknowledged that it’s impossible to derive reliable statistics from such a small sample, but said he believed the inversions showed a strong similarity because they are a “result of a specific setup of monetary policy and the economic cycle, and hence are likely to produce a similar response by investors and central bankers.”

Here’s his outline of that response:

• Given the low 10Y yield, investors reallocate to equities and equity multiples tend to re-rate higher (i.e. ‘Fed model’)
• Following inversion, the Fed tends to stop hiking or commence cutting which can also boost equity valuations
• As a result, performance of the stock market after the onset of inversion tends to be extraordinarily strong. For instance ~12 month performance tends to be in 80-90th percentile. The pace of market gains tends to be above average for up to ~30 months after first inversion, after which performance deteriorates significantly.
• Following inversion, Cyclicals (Energy, Tech, Industrials) outperformed Defensives (Staples, Utilities, Health Care) 12 months out
• Given the strong equity returns and high valuations, the Fed eventually resumes hiking, pushing the market lower and driving a recession

Kolanovic said the current inversion is similar to past episodes in that Fed rate hikes and a growth slowdown have been key drivers of the inversion. Sticking to script, the Fed has stopped hiking and now plans to put its balance-sheet runoff on hold.

But he also noted differences. These include the pressure on the 10-year Treasury yield from zero or negative yields outside the U.S., particularly Germany and Japan. Also, China is a key driver of the global economic cycle, which means monetary and fiscal policy decisions by Beijing are likely to have more influence on the cycle than the Fed, he said.


He also noted that knowledge of the pattern around inversions is well known, which means it could “play out quicker or slower this time, but the time frame should be in quarters or years (rather than months)."

AND

Jerome Powell Is Right—We Should Be Worried About Low Inflation

http://www.fortune.com/2019/03/26/federal-reserve-powell-low-inflation/

(BOLD is my opinion and what I consider important content)


"The Federal Reserve announced last week that there is no plan for a rate hike this year due to slower economic growth. In a press conference held that same afternoon, Fed Chairman Jerome Powell added that “t may be some time before the outlook for jobs and inflation calls clearly for a change in policy.” But perhaps what was most striking about Powell’s characterization of the problems and persistence of low inflation outlined during those remarks was his statement that low inflation is “one of the major challenges of our time.”

While persistent inflation under 2% is a relatively new phenomenon—having only begun in the aftermath of the Great Recession—it’s not just an issue for Federal Reserve policymakers. For economic agents such as businesses, laborers, savers, and investors, persistently low inflation is also problematic because it brings with it a number of potential consequences that influence economic well-being.

First, low inflation may be symptomatic of a slowdown in the economy—a question both financial markets and policymakers struggle with when assessing whether or not a recession is forthcoming. In turn, an economic slowdown can bring with it slower job growth or a rise in the unemployment rate.

Second, low inflation can limit the effectiveness of monetary policy. Historically, when the economy is weak or in a recession, the Federal Reserve may reduce the federal funds rate to try to stimulate the economy. Recent examples include the Federal Reserve lowering the federal funds rate in response to the 2001 recession and the September 11 terrorist attacks. Using zero as a lower bound for interest rates, if inflation is low then the Federal Reserve is limited in how far it can drop rates. As a result, expansionary monetary policy may require more nontraditional tools—such as quantitative easing—to stimulate the economy. And while these nontraditional tools may be effective, policymakers have considerably less experience in their use.

Third, low inflation can be harmful to banks. Banks make income, in part, by the interest rate spread—the difference between the rates they pay to acquire funds (deposits, for example) and the rate they charge on loans. Banks pay relatively low interest rates on deposits, all the while charging significantly higher interest rates on loans. With low inflation that spread shrinks which can negatively impact bank profitability. A healthy and profitable banking system is important to the economy as banks move funds from savers and investors to borrowers (such as homebuyers and businesses). This process, called financial intermediation, is important to the health and well-being of not only financial markets, but the growth of the economy as a whole.

Finally, if inflation becomes negative—then it’s deflation. Persistent deflation causes a whole host of economic problems as consumers reduce spending, businesses cut back on output, unemployment rises, and investors see a decline in the value of their real and financial assets. While rare historically (the last time was during the Great Depression), persistent deflation increases the likelihood of a severe recession.

To make matters worse, part of the problem of low inflation is that traditional economics and economic policy, for decades concerned with high inflation, have until recently given too little attention to the issue of low inflation. This is not surprising: During the late 1970s and the early 1980s, for instance, the U.S. economy experienced inflation rates over 10%. As a result, policymakers and economic researchers focused on how to quickly bring such high inflation rates down rather than the possibility that inflation could become too low.

Powell was correct when he characterized persistently low inflation as one of the most challenging economic issues of our time. In part, understanding the problems caused by low inflation helps address the other challenges Powell highlighted, such as sustaining the U.S.’s economic expansion. Now, economic research and policy must continue to evolve and find the most effective ways to address those problems."

MY COMMENT:

As to the DREADED inversion. Through my lifetime I have watched the FED HAMMER the economy, chasing imaginary inflation, until they drive the economy into the ground and into recession with their rate hikes and policy. USUALLY once they get on this tack they hammer away until we are well into recession. THUS, the ONLY thing that I believe an inversion ACTUALLY signals is that the FED is on an IDIOTIC course of driving the economy into recession. What makes this time VERY DIFFERENT is the flurry of rate increases were over such a short time, and, ESPECIALLY the fact, that the FED backed off this course of action WAY BEFORE we are anywhere close to recession. In my life I have NEVER seen the FED recognize this folly and STOP their course of action this early. My opinion is that this has mitigated or even stopped any chance of recession. Of course, you also have the fact that this so called indicator NEVER seems to come true till 1-3 years down the road which makes it random and meaningless.

As to deflation.......YES...there is NO inflation. My OBVIOUS personal view continues to be that this is the world wide MONSTER that MIGHT end up being responsible for global economic weakness in many countries. England, Germany, Italy, Greece, Russia, China, etc, etc. As to the USA, I believe we dodged the bullet on this issue due to the underlying strength of our economy, our banking system, and our free market capitalistic system. I also greatly credit the current government and their policies of less regulation, tax cuts, and a business friendly environment. (REGARDLESS of personal politics) I saw the same economic policies set off a 20 year economic boom that lasted from the early 1980's till the dot-com crash. The ONLY additional policy that I would strongly support would be a cut in the capital gains tax rates across the board. This would free up more cash and business activity and investing.

I will also state that I have seen many time that the markets and a poor economy are NOT the same. Over my lifetime I have seen many times when stocks and funds performed nicely in a bad general economy. AND..I have seen the reverse. That is why I DO NOT let the general economy drive my investing decisions.

 

Here is a "little" article that with ELEGANT SIMPLICITY sets out the KEY to compounding and making money in stocks and funds. AND.....in usual human fashion most that read it will react with disdain and denial. Why? Because, everyone will say they dont fit what the article is discussing. However, investor results and research shows that the vast majority of so called investors WILL vastly under-perform the markets for the exact reason cited in the article.

Stock Investors: You Have Nothing to Fear but Fear Itself

https://contrarianedge.com/stock-investors-you-have-nothing-to-fear-but-fear-itself/

(Bold is my opinion and what I consider important content)

"The stock market is not your friend. You want to approach it the same way the American president should approach a one-on-one meeting with the Russian president: Be respectful but cautious. He might smile at you and say all the right things, but despite the diplomatic niceties, your interests might not be aligned.

The stock market awakens a dangerous emotion: fear. It is sitting dormant in us all, awaiting an excuse to wake up. When stocks are going up, we may find ourselves engulfed in the fear of missing out (which is so predominant in our society that we even have an acronym for it – FOMO). When we are consumed by FOMO our time horizon magically expands. We tell ourselves we are long-term investors and our risk tolerance is infinite. Risk of decline? We puff out our chests and say “bring it on!”

And then when the market actually declines, a very different fear pays us a visit–the fear of loss. The invincible hero who conquered the FOMO moment shrivels to a husk of his former self when the fear of loss emerges. The chest collapses, and so does the time horizon, shrinking from “years and years” to months, days, or minutes.

These two fears are not compatible with successful investing and have a zero-sum relationship with rational decisions. The more you are dominated by these fears, the less rational you are. Think of the total skill set of an investor as a multivariate equation in which all our skills are combined: the ability to value companies, to interpret financial statements, to understand and apply macro- and microeconomics, to be an independent and creative thinker, etc. And then that grand sum must be multiplied by your ability to remain rational. Think of your ability to remain rational as a number between 0 and 1. If you are totally rational, you are a 1. If you let the emotions generated by the last tick of the market seep into your investment process and dominate your buy and sell decisions, then it won’t really matter what the sum of your other skills is. That sum will be multiplied by a big fat zero, and thus your total skill level as an investor will be exactly that – yes, zero. You’ll be doing what the average investor does – buying high and selling low.

Thus, rationality is one of the most important qualities I’d be looking for in a money manager. Recent market volatility – a code word for when the market doesn’t just go up but also declines – makes the rationality discussion even more pertinent. Staying rational is a very proactive, not a reactive, journey. Smart investors deliberately structure their lives and design our investment process to protect us from the toxicity of the market. The more you let the stock market into your life unguarded, the more room you create for fear – and the more your rationality slips from one toward zero."

MY COMMENT

There is NOTHING I can add to the above. It is that simple, yet impossible for the average investor to actually do.

 

So.....keeping in mind that my PORTFOLIO MODEL stock side is very concentrated.....here is the result for the first quarter 2019:

Portfolio +14.02%
SP500 +12.88%

DOW year to date +11.15%

AND

U.S. Stocks, Led by Tech, Post Their Best Quarter in Nearly a Decade

http://fortune.com/2019/03/29/us-stocks-tech-best-quarter-decade/

(BOLD is my opinion and what I consider important content)

U.S. stocks finished their best quarter in nearly a decade on Friday, as several clouds hanging over the financial markets at the end of 2018 dissipated enough to prompt a strong rebound for most shares.

The S&P 500 closed Friday at 2834.40, up 0.7% on the day and up 13.1% for the first quarter of 2019. It marked the strongest quarter for the benchmark stock index since the third-quarter of 2019, when stocks were recovering in the wake of a global financial crisis that led to the Great Recession. It was also the best first-quarter for the index since 1998.

The Dow Jones Industrial Average, meanwhile, rose 11.2% in the first quarter, while the Nasdaq gained 16.5%, according to Yahoo Finance.

As often happens with stock rebounds, smaller-cap stocks outperformed the broader market, with micro-cap stocks gaining more than 20% and large-cap stocks rising 13%. Among the S&P 500’s sectors, information technology (+18.2%), real estate (+16.8%), and energy (+15.6%) performed the best, while health care (+4.9%) and financials (+7.6%) underperformed the overall market.

Among large-cap stocks in the S&P 500, some of the strongest gains were seen by chipmakers such as Xilinx, AMD, and Nvidia, up 50%, 43%, and 35%, respectively. General Electric, which is undergoing a turnaround, gained 42%, while Netflix advanced 39%. Among mid-caps, beauty-supply company Coty rose 81%, Chipotle Mexican Grill gained 69%, and Xerox rose 63%.

Not all stocks enjoyed the broad-based rebound in the quarter. Kraft Heinz declined 25% after slashing dividends in the wake of disappointing earnings, while drugmaker Biogen fell 21%. Macy’s dropped 19% and CVS Health fell 18% as large retail chains continue to struggle in the era of Amazon and e-commerce.

2019’s first quarter erased most of the losses posted during the previous quarter. The Dow slumped 18.8% between Oct. 3 and Dec. 24 of 2018, amid signs that the Federal Reserve would continue to raise interest rates through 2019 and the threat of a looming U.S.-China trade war. That dramatic selloff cause American households to lose a collective $4.6 trillion in the value of their stock holdings during the fourth quarter.

Starting in January, the clouds that hung over the economy and the financial markets began to clear up, with trade tensions between China and the U.S. easing somewhat and the Fed signaling this month it’s unlikely to raise rates at all this year. Those developments, coupled with a sense that the late-2018 selloff had been overdone, powered this quarter’s rebound.

“The irrational moment of December was just that, a moment driven by tax selling, algorithms and people being extremely emotional about the headlines,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.

For Blancato, that serves as a warning that the rally may not last much longer. “The economy is not strong enough to drive a 12% return on the stock market in an environment like this.”

MY COMMENT

OF COURSE.....I disagree with the final opinion. In my opinion the economy and stock markets have at least another year or two of good times. BUT, that does not mean straight up action, there will be the usual corrections and erratic, shallow market going forward. The election in less than two years will be a BIG black swan event.

Remember all the DOOM&GLOOM headlines over the past week or two. Not too bad a first quarter considering.

MY comment above about my concentrated stock side of my portfolio means that since I only hold eleven stocks my results on a short term basis can be very skewed. HOPEFULLY, I will be able to maintain my lead on the SP500 for the next quarter and to the end of the year. AND, since I am a LONG TERM INVESTOR, do not trade and stay fully invested all the time....I am just ALONG FOR THE RIDE with my portfolio. I just sit and watch....I just sit and watch.....I just sit and watch....I just....