Saturday, March 11, 2017

TLH Market Review - 3/11/117


It feels just like yesterday, actually it was February 28th, that it appeared metals were regaining some of that lost luster. Alas the market gods took note of my article and decided enough was enough. Over the last 2 weeks Gold and Silver have shed 4% & 7% respectively.  Not exactly a run for the exit beating, but noteworthy enough. I think this is more of harbinger of profit taking right now than anything else.  Still with the dollar not giving up any of it's gains, it's only a matter of time before currency headwinds kick back in.  Which brings us to our next topic. The rate hike. 




It was just a few months ago the Fed raised rates for the 2nd time in one year.  Everyone thought the next rate hike wouldn't come until summer 2017 despite the Fed's prediction for 3 rate hikes this year.  Well it turns out the Fed was probably more correct than we are used to.  It seems pretty apparent from Yellen & Co that a rate hike is in the cards next week, and we are likely going to see one this summer. Even if we hit 2/3 rate hikes that's huge considering they were at zero for nearly a decade. This whole turn of events has for sure caught plenty of us off guard, but that's a good thing for once.

It means the economy is getting stronger. FINALLY! In the weakest recovery in recent history we can finally exhale in relief.

The stock market is going to head higher. NOT because Trump wants to make his billionaire friends rich. No one has that kind of control over the markets. But because business is poised to make more money, and that in turn means the stock market is going to become more valuable.  So naturally the market will go up, and if you're not on board the ship then yes it will sail off without you.  You want to get mad at the people making money off their investments while you keep your money in a checking account then go ahead. But if you don't play the game you'll never have a chance at winning.  

In fact now is a great time to get a better paying job so you do have money to invest. The payroll report released Friday shows that. NFP came in at 235k new jobs after a strong ADP report earlier in the week showing 298k new jobs were added.  On top of that we continue to see record low numbers of Initial Claims for Unemployment at 243k newly unemployed.  Average Hourly earnings keep rising(up 0.2% to $26.09/hr), and factory orders saw a nice 1.2% bump.  If you're feeling left out go get that piece of the American Pie while it's for the taking.

Granted things aren't perfect here. They never were. But this country still offers opportunity to those willing to grab it


As for the portfolio it was a quiet week. I'm awaiting the sale of Whitewave(WWAV), and hoping for that pullback to possibly add another good name or two.  The tobacco names have been solid with the exception of Vector Group(VGR) which has reeled since it's earnings report last week.  The decline in cigarette sales wasn't offset by rising prices.  It's no secret the industry is in an odd spot right now where volumes are taking a toll, and e-cigs aren't making up the difference yet.  I expect that to change eventually.

The IShares Biotech ETF(IBB) has been having a good year despite the fact it took it's biggest beatings before Trump was even in office. IBM which is slowly but surely making it's way back towards the $190 range it hasn't seen since 2013.

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Plus Visa(V) and MasterCard(MA) are having a quiet, but stellar year as both are so far up 15.2% and 7.9% respectively. The competition in the payment space is really heating up, but it's still a trend I want to be on.

I'm expecting the portfolio to come ahead this year after I finished 2016 on a weak note. It's no easy feat beating the market. Granted we try doing it here in the easiest way possible by doing not much of anything to the portfolio.

The Long Haul Investor

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