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December 07, 2018
There is no WAZE for investing 
  
  
I'll skip the litany of factors weighing on stocks. You and I have read, heard and seen them all by now.
 
The good news is that the "buy the dip" strategy is finally starting to burn people a few too many times. You need that to happen; to let optimism out of the stock market so it can climb back. Up until now, the retreat has seemed pretty calm and orderly. But the calmness is starting to wear a little thin.
 
As of now, the  DOW and the  S&P 500 are down slightly on the year, the Russell 2000 (small cap index) is down 6%, and the  NASDAQ is barely hanging onto positive territory. But the carnage in a lot of big, widely held stocks is horrendous.
 
A few things from this year that I find noteworthy enough to point out are:
  1. Out of 65 individual country ETF's managed by Blackrock, 60 are down. 60! If not for the pop in oil today, it would be 61 that are down, but Russia is benefiting so it is up a fraction of a percent today. That's just enough to push that one into positive territory ytd.
  2. GE (General Electric) touched the 6's today. The company's debt to equity ratio is 365%. It cut its dividend to 1 penny per share. The most infuriating thing is that a few years ago, under CEO Jeff Immelt (who may actually be the worst CEO of all-time), the company spent about 24 Billion dollars on stock buybacks. Now, the company desperately needs cash to survive.
  3. Facebook is down by almost 40% from its high. FB has become an ongoing PR disaster. Zuckerberg and Sandberg went from being Silicon Valley heroes to villains.
  4. TSLA (Tesla) is pretty darn close to its all-time high.
  5. Inflation is very low.
  6. Stocks of homebuilders tanked.
  7. Cryptocurrencies were obliterated.
  8. The yield on the 10 year Treasury is under 3%.
  9. CMG (Chipotle) is up over 60% ytd.
  10. Stock market volatility spiked.
The thing about these are that exactly a year ago, none of these were expected. Well, I had my doubts about crypto, but the insanity of it was intense. Tom Lee, a noted Wall Street investor and former big wig at JP Morgan put a target on Bitcoin of $50,000.00. There were others predicting even higher price targets than that. It traded to just under $20,000.00 a year ago and has since given all of its gains back and then some.
 
TSLA was supposed run out of money. Chipotle made people sick and put a spotlight on food-borne illnesses. Why would anyone ever want to touch that stock?! Inflation never spiraled out of control, let alone go up a lot. Interest rates on the long end of the yield curve never soared. Facebook became the most hated company in the world. GE's viability as an ongoing concern is questionable. Almost every stock market in the world is down. The volatility of the stock market is wild this year. There are only 15 trading days left in 2018, so its getting late in the game for the bulls.  
 
Maybe these will be the best value plays for 2019. But one thing for sure that investors can count on for next year? Expectations will be dashed. That's every year, right? Some beloved company this year will become persona non grata. Some company on its deathbed will rise again. Interest rate moves will trip you up. But hey, that's what investing is all about. That's what life is all about. Finding your path, making adjustments, resetting, course correcting, falling, getting back up, rinse and repeat. There's no WAZE for investing, not yet anyway. But that's where experience, patience, and resilience come in. All the tools in the world can't replace those 3 qualities.  
 
It's a gift when you look back at the year just passed and you made progress despite the obstacles. You wake up in a new year like it was nothing. Then you set your course and do it again. And at a certain point in life, you realize you possess wisdom because it finally, truly, and deeply sinks in that life's a journey, not a destination.
 
Wishing you a healthy, peaceful, and prosperous journey for 2019!
 
And now, enjoy this amazing duet, Ed Sheeran and Andrea Bocelli Live at Wembley:
 
Ed Sheeran - Perfect Symphony feat. Andrea Bocelli [Live at Wembley Stadium] 
Ed Sheeran - Perfect Symphony feat. Andrea Bocelli [Live at Wembley Stadium]
 
                 

  
 
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Thank you for taking the time to read this!
Mitch
 
 
I opened ClientFirst Strategy, Inc. because I believe that the only way to help my clients potentially achieve their goals is by offering unbiased advice & investment management expertise. To my clients, thank you for your continued vote of confidence. If you are not a client but would like to explore the possibility of becoming one, I invite you to call me directly, visit my website, join my email list, and/or connect with me on social media.      

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All the views expressed in this report/commentary accurately reflect our personal views about any and all of the subject securities or issuers and no part of our compensation was, is, or will be, directly or indirectly related to the specific recommendations or views we have expressed in this report. This material is not intended as an offer or solicitation for the purchase of sale of any security or other financial instrument. Securities, financial instruments, or strategies mentioned herein may not be suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue. Prices, values, or income from securities or investments mentioned in this report may fall against your interests, and you may get back less than the amount you invested. The information contained in this report does not constitute advice on the tax consequences of making any particular investment decision. You should consult with your tax adviser regarding your specific situation. Diversification is a method of managing risk and doesn't protect against loss in a down market. 
  
  

Mitchell O. Goldberg, AIF®, AAMS

President | Investment Professional

OSJ Manager 

 

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