Thursday, January 12, 2017

Thoughts {01.12.17}

Watched the Trump "Presser" yesterday.  Anybody who doubted that things were going to be different when Trump becomes President had those hopes shattered yesterday.   Trump waived off those nasty allegations against him out of Russia, while managing to trash drug companies and CNN at the same time.  For good or ill there's a new sheriff coming to town.

With the exception of the medical sphere markets shook off that whole spectacle out of New York yesterday.  As I pointed out in our last "Chart Talk" post, a lot of stocks quit going up in Mid-December and are now just marking time.  The question is are we pausing before we breakout to new highs or is this a topping process before we see some sort of correction.   Indicators are mixed right now and it seems we could go either way as we move into the new Administration.  One thing that I do think is different is that I believe if we get some sort of sell-off then  based on what we know right now that investors would be inclined to buy that dip.  I will expand on this in a future post hopefully next week.  

Go read Howard Marks of Oaktree Capital here.  You should read Howard all the time as he's one of the brightest minds in the business, but his latest comments on expert opinions is a must.  Here's some of it:  

"The opinions of experts concerning the future are accorded great weight . . . but they’re still just opinions.  Experts may be right more often than the rest of us, but they’re unlikely to be right all the time, or anything close to it.  This year’s election season gave us plenty of opportunities to see expert opinion in action."

Investors are always looking for the unknown event that might hit their portfolios.  These so called "black swans" are the subject of many investment pieces and prognostications  that come out this time of year.  Of course the nature of a black swan is that it is something largely unforeseen so in many aspects most of the writing on this subject is largely a waste of time.  At any rate I'll give you my potential black swan.  However, mine is probably not something for 2017 but an event that has the potential to occur somewhere in the next two to three years....Mexico.  If Trump succeeds in cutting off the economic and human lifeline that the United States is to Mexico then the country could be embroiled in an some combination of  an economic, social and political crisis.  Venezuela may be a closer event to this but it's not as close to us and isn't as tied to our economy as Mexico.  Again this is a subject I'll expand on at a later date.

Back Tuesday.  Monday is a holiday and the markets are closed.