| | | Hi 3bar,
I have a lot of faith in Lakshman and ECRI.
They missed 2016's call on a recession.
Kirk and I have discussed it often.
I've always thought that the missed called was made because they did not account for the huge investments being made in the energy sector and the innovative fracking procedures.
Both the homegrown natural gas and oil created billions in investment and eliminated an awful lot of petroleum imports.
I think that's where ECRI misses their future calls.
Now we have the largest tax cut in history and they're saying they do less and less - that may not be the case in 2018.
We also have repatriated money coming from foreign countries.
Look at all of the great earnings being reported by TER, LRCX, INTC and then paper charge offs for the tax paid to repatriate the monies. That paper charge just reduced the profits that taxes must be paid on.
There will be a huge cash flow bonus for all of industry. I'm not sure ECRI knows to what extent and how to anticipate that.
There is no doubt that recessions do happen - the hard part is saying when and I'm thinking ECRI is way too early,as they do not have a model that can account for some very major one ofs.
Just think if all that repatriated money comes back to the US - it surely will not get reinvested immediately.
Architects and engineers could very easily defer the business spend into 2019.
I'm unwinding my aggressive leverage in my account.
I have no margin but I do keep an extra cash account that can be used if needed. That allows me to over sell puts on my account's equity.
With the January expiration (my biggest month by far) - I have eliminated my leverage.
I also bought to close 70 19 puts on KMI - which retained half of the premium and eliminated $133,000 in commitment.
I'll unwind the other puts I've sold by letting time do its decay thing.
Along the way I'll be glad to buy stock, if any of it is put to me. They all will pay a dividend greater than 5 % and some over 7% (T, KMI, HCP).
I was lucky enough to have held all the way through the 1998 to 2000 advance. I got out early in October of 1999 and left a lot of money on the table as the market ran to February of 2000.
Getting out early is being lucky as getting out in a decline is a very stressful and hard thing to do.
I don't have a holy grail on timing - but there does come a time when you just say - If I sold it all today - the only thing anyone would say about my investment s would be "He did very well".
That's a good place to be.
Since this is your first time to see a runaway market - do some studies.
Right now I'm watching for sector rotation and we're seeing it.
Market tops come when money leaves the party - thus no more rotation.
The top will come and then you'll need to study what keys would have been clues.
My studies from past years tell me to watch for big caps and strong leaders to stall and go sideways for several months - they tease about reaching new highs but don't and it is the ownership going from strong hands to weak hands during those sideways months.
Last but not least the small caps all get their day in the sun.
The friday before Black Monday in August of 1987 there was not a new high over $10.00.
I watch clx and 2cs daily - I find that very helpful.
You are doing great to be involved and learninig.
Take control of your 401K and IRA's - I left them on automatic far too long in my younger years (busy with the day job).
I always was aggressive with my taxable investment account.
I know retirement seems a long way off - but it does sneek up on you.
When that time does happen - having studied the market during your younger years will prepare you to independently MANAGE YOUR OWN MONEY not take puny 4%-5% that so many give to annuity firms as they make 2-3 times as much on your money.
Learn the total cycle: the good, the bad, and the patient.
I'm longer than ever with my core holdings which I hope to morph into a dividend growth portfolio with a balance of low yield bullet proof companies and high yielders with a slug of debt and leveraged.
Best of trades to you 3 bar.
Bob |
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