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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: the longhorn who wrote (10083)	7/9/2020 10:27:11 PM
From: robert b furman	Read Replies (1) \| Respond to of 26834

Hi Longhorn, One heck of question. This pandemic has been a one off. So my answer is a wild ass guess. There have been pandemics before and they never got global attention as now. I think it is more a political football at this point in time. The Dems want all the MSM to emphasize new cases as states go through prolonged efforts to test everyone. The then incorrectly blame the new cases as filling up the ICU rooms. In houston the four largest hospitals each made PR's about there crowded ICO space. IT WAS NOT DUE TO COVID!, It was due to the penty up need for selective surgeries that were put off. Methodist , Hermann Memorial,the Medical Center and MD Anderson all made similar statements. They made them specifically because they saw fear mongering that was not the case AND WANTED TO ASSURE THE PUBLIC THEY COULD HANDLE ANY AND ALL COVID CASES! SO IT DEPENDS ON WHERE YOU ARE INVESTED! Semi's and tech seem to be doing well with the cloud services getting a boost along with 5G rolling out in serious fashion - even handsets! Utilities and even REIT's seem to do well in the low interest environment. This weeks energy recap shows gas to be 15% off from the four weeks of 2019 vs 2020. That's far better than any news is reporting. Crude is in the 40's vs negative 40 in March or April. Most say 50 by 2020 year end and 60 by 2021 year end. That puts E&P's making money,but the BK's will work their way through this year end as hedging plays out. Diesel is off by 17.5% - surprisingly good i think. Trucks are taking market share from trains as the ports were suspended. There are a lot of things out of stock. The replenishment rate can not catch up. Our dealership stocks 125 to 150 units. We are down to less than 50. Last week we got 3 HD ram trucks off the truck. They were all sold in 24 hours. People were awaiting the truck! Each had a trade and the trades were sold within a week. We do not see the factory rebuilding out inventory till november at the earliest,probably run strong into 2021. The shut down has more than depleted the supply chains of auto I suspect! I still say energy will be a huge quick ,rebound and is a deal. Rig count is at an 11 year low and well depletion is constant. We are pumping much less oil, and gas grows with more coal being displaced by natural gas. Liquified Natural gas is of question regarding exports slacking yet europe is buying more? many cross currents there. Bottom line Q2 is where the damage is and dividends have been reduced suspended by some very conservative companies. Dividends have been maintained by many more and some have increased. Its a blip that allows value purchases to be made and a reset is in the works. I do not think that is a long term event but a reset . The world is re-engaging in commerce. The MSM is hyping things to create fear and political noise. Air travel,bars,restaurants (to a lesser degree) are still in triage. We went out to eat twice in Houston before leaving and prices have adjusted UP! As people get accustomed to going out over the next year, those prices should get competitive again. I had Cohu suspend their dividend and aim the savings at debt reduction. Armanino Foods lessened their dividend from 11 cents a year to 7 cents and used the savings to pay off an equipment loan that was due to be paid off in 2022 . So conservative companies that are small, are being prudent with the lack of forward vision - smart! The dividend Aristocrats have continued their rate. T increased, it XOM continued, it CVX continued it, KMI raised it by a lesser than expected amount. IBM raised theirs by only a penny per quarter. It' a huge stall due to so much uncertainty, yet the big solid great balance sheet companies are doing just fine. This recovery will be fast relative to a business recession. Buy the dip, but on stocks with solid balance sheets. Those acquisitive companies with good assets and have been acquisitive with cheap debt and structured it far out into the future will grow bigger and do well with their financial planning. Buy when the street has doubt - it's a good discount. Everybody loves a deal! The smart ones wait and buy, and then hold. Bob