Crisis and Change – Alpha Sources

Month: October 2018

Sustainability and a Bullfight

I attended a bullfight in Nimes, France.  It was mostly by accident but that is another story.  A beer cost 3 Euro but at the end of the event you could return your cup for 1 Euro.  A great way to reduce waste and a great lesson on sustainability.


Trump Likes a Good Stock Market

So it looks like most everyone has something in common with Trump after all!  Most everyone likes a rising stock market.  Yesterday’s 3 percent market drop  plus today’s down 2% has Trump looking to expedite a meeting to discuss China trade agreements and put some heat on the Fed to keep rates low.

Relax investors, Trump has got your back!  But I still like having some cash on the side. Cash will feel pretty good in case China or the Fed chooses not to play ball.  Even if they do, we may be overdue for a big pause in this long bull market.

October 2018 Jitters

I am suffering a small case of the market jitters.  The market has been moving up for a long long time and making money in the stock market has just felt too easy.  Of course, the FANG stocks and pot stocks have been the big leaders in 2018.  I am thankful to them both in the Coker portfolio.  The balance of the US stock market has not been too robust.  Many markets around the globe are actually negative so far this year.

Why the jitters now?  It is a combination of factors: logical, behavioral and Halloween.  Logically, the US market is trading at a significant valuation premium to most of the international markets.  The premium continues to grow and investors may start looking abroad.  Behaviorally, investors may start getting a little defensive (protective of gains thus far).  Halloween – earnings are generally meeting expectations but the outlook messages are being delivered with a bit of caution.

We may be in for a bit of a surprise this fall. One good “Boo” and we could be in for a medium size correction.  Cash feels better than my favorite flannel shirt.


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