Market top? The scoop on Boston, NYC and the economy
It has been a wild week and it is only Wednesday. It’s been a steady year in the markets so far, but we’re not even out of January yet. We saw a new all time high with the $DJIA this morning. People are making a big deal out of it and I actually heard someone explaining on CNBC SiriusXM this morning that “a lot of people who have missed this bull market are finally going to feel comfortable putting money into the stock market since we’ve finally gone above 20,000.”
Remember when I was mocking that logic a few weeks ago? On the other hand, my parents did call me yesterday to talk about whether they should either be putting more money into the stock market or reducing some of their long-term exposure in stock market. They read Trading With Cody and they know that I’m not in any big rush to buy or sell or hedge or short or make any drastic moves just now. I suggested they do the same. Just sit tight with the current positioning for now.
You guys know that I expect we have yet even more Bubble Blowing Bull Market action in the next two or three years at least — given that rates don’t spike, that there’s no new war outbreak, that the Republican Democrat Regime in power and the bank-owned Federal Reserve continues to enable (or even increases how much they give) corporations to reduce competition through M&A, pay almost no taxes (or even get net handouts from the local, county, state and federal levels) including repatriation of the trillions that corporations hold overseas that should be taxed at the same levels that every small business company does, and so on…
Eventually, maybe this year but more likely in five or ten or quite possibly in twenty or thirty years, all these trillions of dollars of Republican-Democrat-Regime’s debt and tax-code-enabled/subsidization economic imbalances, destabilizing wars…all this stuff could turn into “Black Swan Events” or otherwise threaten the nation’s economy, the value of our currency as well as how wealthy and even just plain safe you feel.
On my trip to Boston and NYC last week, whether I was sitting courtside next to the coach and co-owners of the team as the Celtics beat Charlotte, or the next day as I was sitting in Celtics headquarters listening to the company, or later that day when I was meeting with the founder of The Basketball Tournament, or the incoming head of marketing for the International Olympic Committee, or later that night while hobnobbing with people from Goldman, JPM, mobile app developers and entrepreneurs — the talk was all about growth, investment in the future, and hope.
In NYC as I met with editors at Bloomberg, Breitbart and the WSJ or had lunch with my oldest childhood friend, Neil Patrick Harris, talked to representatives for Venus Williams and Donnie Deutsche, sipped tea with Hollywood movie makers from the Producer’s Guild of America, and a few other meetings…the talk was all about growth, hope and investment in the future.
I compare this environment to the year 2000 or the year 2007 because those were points in time when everywhere I went, the discussions were all about growth, hope and investment in the future.
In 2001, of course, the dot com bubble was imploding and the Y2K reversion was in effect and the markets crashed. The App Bubble, which I positioned us for so well back in 2010 and 2011 already popped in 2014 and 2015, as I wrote about at the time.
I remember in early 2007, I was over having a beer at Richard Edelman’s beautiful apartment on the Upper East Side. I was in the process of selling all of my stocks except for Apple, Google and Microsoft (I don’t own Microsoft any more but do still own Apple and Google of course) and was talking about closing my hedge fund after a terrific five year run. He wanted to know why and I told him it was all about the coming implosion on real estate. I felt it, I saw it, I knew it was coming sooner rather than later. There were cracks as real estate prices around the country had finally started to fall and I told him I wanted out…Of course, we all know how bad it eventually got — bank bailouts and financial crisis and stock market crash and all that stuff that ensued in 2008 and 2009.
I don’t see anything quite like the real estate/financial crisis or the dot-com bubble crashing just now. That doesn’t mean something I’m not seeing isn’t out there ready to cause a major crisis or crash, but as I always tell you — our job is to keep right on top of these things, make sure we are hedged or positioned properly for the next time the economy does crash.
For now, it might be boring, but I don’t want to be greedy or fearful just now. We will indeed have some 5-15% pullbacks in the stock market over the next year or two no matter how Bubble-Blowing Bull Market the forces are. We will have fears about the EU, the Chinese, the Russians, the Middle East, the financial system, corruption, the health care system, hacking of electrical grids and so on. Which ones will matter? Which ones will provide our next great buying opportunity? When will be the time to finally turn bearish?
Stay tuned, I’m ready for all of it and have a playbook for it. Let’s do this.
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