Tuesday, March 08, 2016
The market comes back Donald or no Donald
With politics dominating the news and the airways, er cableways, I can understand that anyone would be depressed but that by itself is no reason to sell stocks. Sometimes, it's just time. As you can see below, we did a good bit of selling in the fourth quarter. Our formula seems to know when stocks are getting too high, though it generally moves a little early. By December, we were back in buy mode for the most part, and that has continued until just the last week. We will provide the first quarter, 2016 transactions in the next post which will bring us up to date. Stocks have maintained their value despite, and not because of central bank actions. I continue to believe we need the Fed to normalize interest rates already, and then please get out of the way. By now it should be perfectly obvious that the quarter point increase in rates helped and did not hurt the economy. As for the lack of inflation, I have two things to say (repeat) about that. First, there is plenty of inflation, in housing, health care, food and beverage, everywhere but energy and commodities. And now they are perking up too. Second, where did this 2% annual inflation target come from? I can't imagine a more idiotic monetary policy. The only thing helped by inflation is the government's balance sheet since it is the world's biggest debtor. What would be wrong with monetary policy aiming for price stability?
Of course, the Fed is a model of prudence compared to Europe, a whole continent going broke trying to pay unsustainable pensions and where interest rates are actually negative in a futile effort to foster inflation. None of these central bank actions matter nearly as much as an economy's productivity. Luckily, we are still way more productive than just about everyone else, even if our work ethic ain't what it used to be.
Sadly, our political candidates seem to grasp none of this. Most don't seem to have ever taken even an 8th grade economics course. To hear Trump, Sanders, and Hillary speak ignorantly about trade policy is hair raising. In fact, the tenor of all the debates has fallen quite a bit short of your basic high school student council candidates debate. We might as well be talking about what prom decorations to put up and promising to restore the Coca Cola machine to the school lunch area.
As for Cruz and Rubio, hasn't our current President exemplified the poor judgement the country used in electing a first term Senator with no other relevant experience? This leads to the inevitable conclusion that the only competent candidate from either party is Ohio Governor Kasich. His plodding campaign has discouraged many of his supporters, but there are some signs that he is the tortoise who might just yet pass the hares. A second place or better showing in Michigan, as now seems possible, and a win in his home state may provide the momentum to keep him in the mix until the convention. This is especially true given my belief that Trump has peaked. If they get to the convention and no one has a majority (though Trump or Cruz might have a plurality), and if Rubio suspends after he loses Florida, don't be surprised if the convention turns to Kasich. This will disappoint die hard conservatives who doubt Kasich's right wing bona fides, and of course the Trump supporters, many of whom aren't really Republicans at all. But the party professionals would be delighted as they would emerge with a center right candidate very capable of winning the general election and helping retain the Senate down ticket.
By the way, it is time the media junked the pejorative term "brokered convention" in favor of the more accurate "contested convention." It used to be the exception that a party candidate won nomination on the convention's first ballot. Usually, you could not assemble a majority of delegates until after the first ballot primary and favorite son commitments were dispensed with. Funny how the concept of a convention not managed by a dominant candidate is referred to by the media as a brokered convention when applied to Republicans but as an "open convention" when applied to Democrats. Or is that my paranoia at work?
So the game plan now is this is the time to step up and contribute financially and/or by talking up the John Kasich candidacy, since there are a lot of self-fulfilling prophecies in politics. If we want to see someone who can beat Hillary the shrillmeister, and get our fiscal nightmare behind us, then now is the time for a little rationality.
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Purchases
Date Symbol Shares Price Comment
10/2/15 MMM 15 139.08
10/19/15 TIP 20 111.12
10/21/15 CNRD 100 21.50
10/22/15 MMM 15 151.97
10/27/15 GLD 20 111.68
11/5/15 AWCMY 600 3.36
11/6/15 ONCS 600 3.68
11/9/15 AFSD 100 25.35 Quack Quack
11/11/15 ENI 200 12.37
11/11/15 MMM 25 157.86
11/16/15 PRH 100 26.09
11/16/15 HZO 200 14.93
11/16/15 ONCS 700 3.21
11/23/15 TIP 20 110.82
12/2/15 BG 50 66.03
12/7/15 ONCS 700 3.02
12/8/15 AFSD 100 25.51
12/10/15 BRS 100 26.39
12/11/15 HSC 500 8.73
12/14/15 GLD 20 102.58 Gold was getting killed
12/15/15 ADM 100 34.44
12/17/15 DVN 100 29.28
12/21/15 TIP 20 109.74
12/22/15 KN 200 13.24
12/29/15 GLDD 600 4.05
12/31/15 GLD 20 101.48
12/31/15 MU 200 14.10
Sales
Date Symbol Shares Price Purchase Purchase Comment
Date Price
10/5/15 HIG 50 46.24 8/5/11 24.61
9/6/11 21.33
10/6/15 SJM 25 116.98 3/5/14 99.16
10/6/15 KN 100 20.25 3/11/14 28.02
3/21/14 31.50 "I don't like losses, sport"
10/13/15 GNE 200 13.27 11/20/12 6.01
10/15/15 ECL 25 121.60 9/25/05 32.10 Ten years of upside
10/15/15 GIFI 200 12.37 5/18/15 18.64
11/6/12 22.09 Pain in the oil patch
10/16/15 MAN 25 87.84 6/14/16 61.45
10/21/15 GNE 200 13.49 10/2/13 9.17
10/26/15 ALGN 50 67.00 9/15/14 54.91
10/30/15 LANC 20 113.53 6/21/06 39.66
10/30/15 ROP 15 184.68 9/19/01 18.22 Home run for our side
11/3/15 BYD 100 20.36 8/6/14 9.52 It was a gamble
11/3/15 CAVCO 30 97.65 zero cost spinoff
11/9/15 SXI 50 89.64 1/4/01 19.88
11/16/15 GE 100 29.97 8/20/10 15.16
11/23/15 LFUS 50 109.28 11/13/00 25.63
11/23/15 TMO 15 136.59 1/13/03 19.88 Gonna have a tax bill
11/23/15 SEIC 50 54.17 9/9/11 16.06
11/30/15 AAON 100 25.12 1/26/05 2.84
12/1/15 NWBI 200 14.04 5/10/04 9.30
12/2/15 Y 5 503.50 5/08 371.50
12/17/15 GENC 200 12.70 2/23/09 6.15
12/24/15 FNFG 200 10.90 5/31/12 8.02
11/12/12 7.57 Will takeover by Key be allowed?
12/24/15 LOW 50 75.83 1/23/06 31.74
Of course, the Fed is a model of prudence compared to Europe, a whole continent going broke trying to pay unsustainable pensions and where interest rates are actually negative in a futile effort to foster inflation. None of these central bank actions matter nearly as much as an economy's productivity. Luckily, we are still way more productive than just about everyone else, even if our work ethic ain't what it used to be.
Sadly, our political candidates seem to grasp none of this. Most don't seem to have ever taken even an 8th grade economics course. To hear Trump, Sanders, and Hillary speak ignorantly about trade policy is hair raising. In fact, the tenor of all the debates has fallen quite a bit short of your basic high school student council candidates debate. We might as well be talking about what prom decorations to put up and promising to restore the Coca Cola machine to the school lunch area.
As for Cruz and Rubio, hasn't our current President exemplified the poor judgement the country used in electing a first term Senator with no other relevant experience? This leads to the inevitable conclusion that the only competent candidate from either party is Ohio Governor Kasich. His plodding campaign has discouraged many of his supporters, but there are some signs that he is the tortoise who might just yet pass the hares. A second place or better showing in Michigan, as now seems possible, and a win in his home state may provide the momentum to keep him in the mix until the convention. This is especially true given my belief that Trump has peaked. If they get to the convention and no one has a majority (though Trump or Cruz might have a plurality), and if Rubio suspends after he loses Florida, don't be surprised if the convention turns to Kasich. This will disappoint die hard conservatives who doubt Kasich's right wing bona fides, and of course the Trump supporters, many of whom aren't really Republicans at all. But the party professionals would be delighted as they would emerge with a center right candidate very capable of winning the general election and helping retain the Senate down ticket.
By the way, it is time the media junked the pejorative term "brokered convention" in favor of the more accurate "contested convention." It used to be the exception that a party candidate won nomination on the convention's first ballot. Usually, you could not assemble a majority of delegates until after the first ballot primary and favorite son commitments were dispensed with. Funny how the concept of a convention not managed by a dominant candidate is referred to by the media as a brokered convention when applied to Republicans but as an "open convention" when applied to Democrats. Or is that my paranoia at work?
So the game plan now is this is the time to step up and contribute financially and/or by talking up the John Kasich candidacy, since there are a lot of self-fulfilling prophecies in politics. If we want to see someone who can beat Hillary the shrillmeister, and get our fiscal nightmare behind us, then now is the time for a little rationality.
----------------------------------------------------------------------------------------------------
Purchases
Date Symbol Shares Price Comment
10/2/15 MMM 15 139.08
10/19/15 TIP 20 111.12
10/21/15 CNRD 100 21.50
10/22/15 MMM 15 151.97
10/27/15 GLD 20 111.68
11/5/15 AWCMY 600 3.36
11/6/15 ONCS 600 3.68
11/9/15 AFSD 100 25.35 Quack Quack
11/11/15 ENI 200 12.37
11/11/15 MMM 25 157.86
11/16/15 PRH 100 26.09
11/16/15 HZO 200 14.93
11/16/15 ONCS 700 3.21
11/23/15 TIP 20 110.82
12/2/15 BG 50 66.03
12/7/15 ONCS 700 3.02
12/8/15 AFSD 100 25.51
12/10/15 BRS 100 26.39
12/11/15 HSC 500 8.73
12/14/15 GLD 20 102.58 Gold was getting killed
12/15/15 ADM 100 34.44
12/17/15 DVN 100 29.28
12/21/15 TIP 20 109.74
12/22/15 KN 200 13.24
12/29/15 GLDD 600 4.05
12/31/15 GLD 20 101.48
12/31/15 MU 200 14.10
Sales
Date Symbol Shares Price Purchase Purchase Comment
Date Price
10/5/15 HIG 50 46.24 8/5/11 24.61
9/6/11 21.33
10/6/15 SJM 25 116.98 3/5/14 99.16
10/6/15 KN 100 20.25 3/11/14 28.02
3/21/14 31.50 "I don't like losses, sport"
10/13/15 GNE 200 13.27 11/20/12 6.01
10/15/15 ECL 25 121.60 9/25/05 32.10 Ten years of upside
10/15/15 GIFI 200 12.37 5/18/15 18.64
11/6/12 22.09 Pain in the oil patch
10/16/15 MAN 25 87.84 6/14/16 61.45
10/21/15 GNE 200 13.49 10/2/13 9.17
10/26/15 ALGN 50 67.00 9/15/14 54.91
10/30/15 LANC 20 113.53 6/21/06 39.66
10/30/15 ROP 15 184.68 9/19/01 18.22 Home run for our side
11/3/15 BYD 100 20.36 8/6/14 9.52 It was a gamble
11/3/15 CAVCO 30 97.65 zero cost spinoff
11/9/15 SXI 50 89.64 1/4/01 19.88
11/16/15 GE 100 29.97 8/20/10 15.16
11/23/15 LFUS 50 109.28 11/13/00 25.63
11/23/15 TMO 15 136.59 1/13/03 19.88 Gonna have a tax bill
11/23/15 SEIC 50 54.17 9/9/11 16.06
11/30/15 AAON 100 25.12 1/26/05 2.84
12/1/15 NWBI 200 14.04 5/10/04 9.30
12/2/15 Y 5 503.50 5/08 371.50
12/17/15 GENC 200 12.70 2/23/09 6.15
12/24/15 FNFG 200 10.90 5/31/12 8.02
11/12/12 7.57 Will takeover by Key be allowed?
12/24/15 LOW 50 75.83 1/23/06 31.74
