It looks like, at the time of this writing, we will finish the day up for the first time in ten straight days. So what does this mean? Absolutely nothing! The stock market has been in an upward trend since the first of April. We are now trading back to within 109 points or 3.8% of an all-time high. I hope this will put it in a bigger perspective for you. It is easy to get caught up in all the BS and minutia the talking heads on CNBC like to spew to keep their jobs. The Devil is ONLY in the details and is not in the broader economy. Do not worry about the trade war. I have said this as well as Cramer. We all know by now President Trump plays hardball when negotiating. These last few days have been the evidence of the short term pain we may feel in this process. The pain really hasn’t been that bad because we are only off 3.8% of the high.
I want to clarify something from last week’s Bottom Line. As a very savvy client and loyal reader of “The Bottom Line” reminded me, tariffs are very complicated. I over simplified this discussion and looking back the tone of my letter was somewhat negative towards Canada. Let me apologize. I absolutely mean NO disrespect towards Canada. They are a valued trading partner and strong ally of the United States. I even trained with some Canadian Special Forces during my time in the United States Marine Corps. These were some of the finest military men I have ever had the privilege to serve and train with. Really tough guys! China on the other hand is not an ally or a fair or honest trading partner like Canada is.
The Bottom Line is that we are just starting the summer months of dull and boring markets. This is when any news item can swing the markets wildly and most of the time down. I welcome any excuse to bring the markets down a little to allow me the opportunity to buy the same quality stocks that have been performing so well for us. This is nothing more than an excuse to take some profits which we have already done. Now we wait in ready ambush to seize the opportunity when it presents itself. The economy is very strong and even the Fed has confirmed this.
I am expecting more downside as the rhetoric over tariffs escalates. Good, I hope it does and I will be ready.
Your Boring Money Manager,
Mowery Capital Management
We manage risks first
Then we buy quality
And only then do we seek to provide a reasonable return
At the time of this writing:
Dow Jones 24,618.01
S&P 500 2,759.17
Two Year Treasury Yield 2.38%
Ten Year Treasury Yield 2.89%
Thirty Year Treasury Yield 3.08%
I would really like to hear from YOU. If there is any topic or issue you would like me to comment or have any question I can research and answer please email me at firstname.lastname@example.org and I will include it in the Bottom Line. I will keep your name confidential.
Sources: The Capital Group. Zacks, Seeking Alpha, CNBC, CNBC guest and contributors, Jim Cramer, Wall Street Journal, Investor’s Business Daily, and Financial Times. Special thanks to Wikipedia and MarketWatch for historical facts. If I have inadvertently missed any other sources please accept my apologies. No assurance can be made that profits will be achieved or that substantial losses will not be incurred in connection with any investment. All investments involve varying degrees of risk including loss of capital. This information should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation of any individual investment or strategy. PAST PERFORMANCE IS NO GUARR ANTEE OR INDICATION OF FUTURE RESULTS