The Stock Market - A daily diary

I saw that.  It happened in the last couple of hours, too.... Apparently , the markets didn't like what "Dr. Fauxi"  said in regards to opening up the economy too soon and causing bigger problems.  I'm sorry, but in his medical bubble world, it seems he believes society can curl up into a ball and ride this out until a vaccine arrives.  We've tried that, and we are past that point as economic damage is harming everyday Americans.   We need to focus on opening up society as best we can, as safely as we can, and everyone should be wearing a face mask for crying out loud.  I don't know why this isn't being pushed more, as well as simple health advice such as building up your immune system w/ Vitamin C.    It can't hurt, so it's puzzling why it's not discussed more.    

Rush. Never forget that this is a political battle that is happening right before your eyes. 

United Airlines got zero takers on an 11% offering today. 

That's brutal. 

The doctor is right...like it or not his position is that of risk/reward and what is likely to happen because we are not ready to re-open and we have no idea what is really going on with the virus...its all guessing and people needing to make money. He is not concerned with people making money or paying their bills because the health of the population matters more than money and obligations. I do not think he has an agenda or a side profit reason to say what he does but Trump sure has a reason to say what he does. Our UE numbers are likely close to 30%, we dramatically underestimated and minimized a serious situation...our political leader is clueless and unprepared. If he rolls the dice and loses well all he loses is an election, so what the crap does he care? he rolls the dice and loses the hundreds of thousands who die and the economic tsunami he will leave behind has consequence.

I trust Fauci just a itsy bitsy bit more than the moron in chief. 

Hey Poo..

There is nothing in risk free return now, nothing at all..so either you gamble on Facebook and energy dividends or get 1.5% and less on bonds. The FED and Trump have us slammed into the corner with no options for safety at all.

These airlines are just sitting ducks.  I just read that UAL announced they will lay off 30% of their white collar workers in October.   Why the wait ? Because they wanted the $5B from the FED, and part of the contingency was to not layoff workers for 6 months.   What a bunch of pricks.   I wish  Steve Mnuchin would pull the rug out from under these guys and force them into BK sooner.  As a bondholder ( taxpayer) like the rest of America,  let's overhaul the CEO and board,  too.  

We can all dream...

Rush,

We obviously have different opinions on Mnuchin...I think he is the most corrupt, inept moronic UST head Ive ever known. The guy serves corps and especially his banking buddies and he is cut from the same toxic cloth that Trump is. I cant stand seeing his smug elitist face.

Yeah, I get it, but Fauxi really does have tunnel vision and is not really looking at the big picture.   I contrast his comments w another doctor, Scott Gotlieb,  who correctly pointed out the number of people who must defer procedures and medications, as well the recently unemployed who may be going through their own issues.   It's an all or nothing picture w Fauxi, and the only lives that matter are those infected w the Chinese virus.   

It's a joke the way Faucci and the Democrats are cramming their fear agenda in everyone's face. The proposed Hero's Act wants to put a trillion dollars into testing and tracing and then the next step will be the Microchip Act where all American's will be sent to the "government center" for their implantation ceremony. 

I get it that we could be doing better with testing, but the Democrats are going off the deep end on this one. 

I bet if you knew the guy outside of this scenario you would likely not feel this way. His role is to try and give insight to this issue...not about the unemployed or businesses going under or lost tax dollars. His role is to estimate and give insight as to what is and what could be. I find him to be unpretentious, genuine and realistic. He isnt angling for something unlike Trump or Munchkin or other political phonies. Ive watched plenty of his commentary and all I see is someone that feels this could be an exponential epidemic and that we are not prepared or handling it properly. He is right, we fell into this flat footed because Trump is only concerned with being elected, being liked by the elite and if the stock market is going up..he thought it was a total scam and thus did not take leadership action when he should have. The general public in the majority does not take this seriously and until it hits them square in the jaw most are not going to understand the severity of the situation.

What I like about the guy most is he is one of the few who will stand to his position irregardless of what the BigMac in Chief wants him to say and he is not wavering much from his position, especially as we are learning more. So I dont look to that guy as a source of economic or political insight rather someone who explains the complexities and things that most people would not even consider with regard to how this is evolving and changing and the health risk every single person faces in this country and the world. His views do not make the decision making easy but I think we are dramatically rushing to bad decisions and I hope we get LUCKY and do not turn this into something much more severe with our careless approach as a society.

I hear you, Wall.  But I would rather have someone w working experience rather than an academic or someone involved in politics their whole life.   It comes w the territory that Mnuchin is going to have connections, but I also believe their working experience in banking is an asset, particularly this environment.  Someone like Jacob Lew would probably still be poring over his textbooks for the answers..... no thank you 

Having someone from the sector that BENEFITS from a relationship with the FED and the UST is the wrong person to be in charge. What would be wrong with letting excesses be removed from the market, reducing debt and leverage and not penalizing savers? What is wrong with fiscal responsibility and prudent decision making? Mnuchin is a clown...he is a servant to his past and is not making the best decisions especially for the mid and long term. Trump the dope had his first three years to make good fiscal decisions, he did the reverse. Trump's decisions and thus Mnuchin's are similar to the mentality of the common citizen...how can I get the most today and tomorrow, what can I buy and what can I eat now? We should have taken the economic excesses of the last 6 or so years and made good choices so that when we are in the middle of an unexpected event like this that we have resources and funds to handle it and not cripple the future generation and punish the saver.

I will never agree with you on the kind of clown Mnuchin is, I find zero redeeming qualities from him or Trump.

Wall, you are beating this horse to death. The cozy relationship between the Fed and government leaders didn't simply start with Trump. Politicians have been corrupt long before Trump and Mnuchin came along. Find a group of politicians that put an end to the pork fest and I will show you an alien invasion taking over the world. It's never going to happen. 

Can we get back to how stupid this most recent proposal by stuttering Pelosi was yesterday. 900B on tracing? Yes, let's put some money into testing. That I'm all for. However, implementing a "tracing" system is like locking up the barn after the horses have stampeded into the next county. I hope the Republicans stand firm and don't pass still stupid bill. 

God help us all if the Democrats ever get full control. 

Am I mistaken or didnt that phony campaign on getting rid of the establishment type of slime? MNU is totally establishment, he is an elitist, connected swamp loser. Trump has done nothing but surround himself with connected industry losers..yet none of you repubs give a crap.

I have no idea about a tracing proposal, but one I do support is giving money to the little guy. These geniuses dolling out money to corps and large institutions under the pathetic guise of generating inflation are idiots. Inflation does not come by giving money to the elite and hoping they will do good things with it and thus it will stimulate demand. If you want demand to increase then give money to the CONSUMER...holy hell it is so simple and absurd the fake garbage logic these dopes use to rationalize transfer or wealth. If you want demand it wont come from giving money to banks, hedge funds and massive corps..have they not realized this over the last decade since 2009? Gee I wonder why our inflation target is not being met like ever.

Wall. I'm a registered independent and didn't vote for Trump. When all of the choices stink, make yourself heard by sitting out and not give a vote to anyone. That's what I did in 2016 and it looks like I will do the same this year. 

Yeah....we aren't hearing much about draining the swamp anymore. Perhaps some of Trump's far right think that it's happening? The swamp is impossible to drain, as once one has power, the incentive to drain the swamp goes away in exchange for the same old serving of self interests. 

Finally, I agree with you that money is more likely to trickle up than down but waiting for that to happen in any significant fashion is like watching glaciers melt. No wait, glaciers eventually do melt, so strike that comment. 

Never have understood this philosophy.  It is the Super Bowl and there are only two teams left.  It is not like he was a lot of folk’s ‘first choice’.  But he was, for sure, their ‘choice’ over Hillary — in the political Super Bowl.  

How did you, ‘make yourself heard by sitting out and not give a vote to anyone’ help?  What exactly did that accomplish?  I don’t mean — just you, but all who did that.  

I could make a very good argument — and have other places — that this was the sort of mindset that got Trump the nomination in the first place.  

You are not voting just for that candidate — but for everything they do or do not do for four years.  Imagine the judges Hillary would have put in place.  They certainly would not have been independent at all.  Imagine the economic policies she would have put in place.  These things have a longterm effect.  

A lot of people preferred other Republicans.  I mean, it is not like Trump was polling 70%.  There were many other candidates that were available.  So, as the field narrowed the voters had to choose between fewer and fewer — until all the candidates had been knocked out but one.  Then you have to take the good with the bad for the overall betterment of the country.  

Presidential elections can be very close.  People should choose the best candidate that is left, over the worst candidate.  It is not like people can hold you accountable and blame you if the candidate you vote for messes up. You still did the right thing by voting for the best available that was left.  I think people feel if the person they voted for by ‘default’ messes up, people will look at them askance.  They also feel they don’t have the right to bellyache if their guy messes up.  Neither of those is the case.  If your guy does wrong, you can still say he did wrong and he can maybe correct it or lose a re-election bid.  

I wish you and, so many others, would reconsider this philosophy.  

Sad to say, but it is usually the ‘independent’ Conservatives that do this.  The ‘independent’ Liberals usually stick together at the end.  I have to give them credit for that.  Their candidates may not get out a lot of interest always. But the ones that do get out usually will go ahead and vote for their last candidate instead of being disenchanted and staying home because their candidate did not make it.  

You can see this with Republicans a lot.  You can make a case the Ross paved the way for Trump.  

I will admit I am, amazingly, surprised at how well Trump has done.  Especially, under the constant scrutiny and struggle he has with the media and democrats in Congress. 

Anyway, there are way too few eligible voters that even vote — after all the struggle to get the right to vote.  So, I certainly don’t like to see someone sit home just because they are disenchanted.  Make sure you support your chosen candidate in the primary through whatever means you can.  Then if they win — great!  If not, you still have to choose from the last two standing.  

Just my opinion.  But I hope you rethink your position. 

Darn it Raiders. 

You have a way with words that makes me agree with you every time. You are so right about how you broke down disenchanted repubs/ind's/dem's and how they think.

Since the vote is still several months away, I suppose I can come to terms with being disenchanted with my choices and cast a vote Trump's way. If I'm going to do that, then I just need to turn off the TV whenever I see his face. Every time he opens his mouth it's basically a coin flip if he will make a fool of himself. It's an embarrasment to the USA and it's my biggest problem with Trump....his big fat mouth.

I agree with you.  He can be very off putting.  Irascible even.  But he is still better for the country than Biden would ever be.  

Not trying to really get you to agree with me.  Sometimes, as they say, you have to hold your nose and do your civic duty. 

Yeah. God forbid Pelosi's band of morons get in power and decide to spend a trillion dollars on virus tracing. Think about that? Does she plan on hiring thousands of tracing agents going around and chasing down every person that every person spoke to all based on what people remember? Then, since maybe as many as 25% of the people don't show any symptoms, so they are also chasing down zombie carriers walking right past them on the street unnoticed. 

Spend a trillion dollars on that? 

How do they even come up with such a stupid concept? 

I get it if you are the President....and maybe a handful of other people. 

Pelosi has completely gone off the deep end. 

We've had some negative commentary over the last couple of days that seemed to have moved markets ; namely, Stanley Drunkenmiller, David Tepper, FED chairman Jay Powell, and finally, that Bozo CEO from Boeing.  The first two talked about how the markets were overvalued (shocker !), and Powell talked a cautionary tone about the economic recovery (shocker!).  How can the markets can be surprised by this ??  It just tells  you how fragile investors are.  And BTW, who are the "buyers" in today's markets ?  Stock buybacks MUST be way down in the current crisis so it can't be big corporations  (keep in mind they were the HUGE buyers in the market the last 10 years).  Or Is it BIG institutional buyers ?  If so, could they really have been caught offguard by their colleague's comments ? (i.e. Drunkenmiller & Tepper).  Or is it the retail investor that has done most of the buying since the March Low ?    That would be cause for concern if so ; they as a group are habitually terrible at market timing.  BTW, I think most are numb to the idea of the "Fed Put" and wouldn't have responded with big buying at the March Low..   Would be curious to find out who the big buyers have been since the March Lows.. 

Today's action here Thursday is a bit better.  Can we credit the optimistic commentary from Nelson Peltz & Bill Miller.  Lol..  My oh my.. Fragile markets indeed... 

Circling back around to that Boeing CEO.... Wow, what a bozo.  He was asked earlier in the week if he though there would be any airline bankruptcies.  He said "Yes, I think there could be one...  "  .  Excuse me Bozo.. These are YOUR CUSTOMERS.  How 'bout you next time just politely defer the question..  I'm sure the Boeing Board is looking at keeping Bozo from making any public comments for the time being...  

As bad as Boeing's problems are, GE just can't get out of its own way.  Over the last couple of years, GE has sold non-core divisions like Financial, Oil/Gas, Locomotive, Appliance, etc.. and went headlong into Aviation.  It seemed a good decision to focus on this core area of GE, selling jet engines to Boeing & Airbus; it was GE's best business segment after all, but then the Chinese Virus hit.  I'm sure their CEO must be throwing his hands up in the air.  GE just can't catch a break at all..   Feel sorry for this iconic American company in some ways ; Jeffrey Immelt sure mismanaged this company during his tenure.  GE was the world's most biggest company just about 20 years ago.   

Here are some other companies that were in the top 20 in market capitalization 20 years ago.. IBM, AIG, AOL,... XOM

Wow, how times have changed... 

Do any of you guys keep a "shopping list" of stocks you'd like to buy at better prices,  if/when the market takes another tumble lower ?  

I've recently harvested some tax losses in DIS & PENN, with the outlook/belief I can buy them back for much cheaper in the weeks/months ahead (keeping in mind the 30+ day wash rule).  These stocks are really exposed to the Chinese Virus, so any setbacks in the future will really hammer these stocks again.. If the opportunity never comes to buy them back cheaper, so be it. 

UBER is also an interesting company.  I own it already, w/ no plans of selling, and it went all the way down to around $13 in March, and has since snapped back to almost $33.  IMHO, it isn't in the throes of the Chinese Virus like DIS & PENN, and may actually benefit from people not wanting to ride mass transit for the foreseeable future.  Also, I  like that they effectively operate in a duopoly with LYFT, and UBER has done well recently w/ its UBER Eats business..  If it can buy competitor Grubhub  in the food delivery business at an attractive price,.. all the better.   I got these guys (UBER) on my radar if we get another big downturn later...  

I can't blame you for selling DIS and PENN. UBER? They do have great potential in a scenario where they dominate delivery in a world without a vaccine and are sure to benefit from this economic shift. 

WMT? The dividend will be safe at 1.8% and they are #1 in their group, but it's a boring bet with a not-great upside. Again...nothing looks good without a vaccine. 

What are the chances we will have a vaccine in 18 months?

50?

75%?

 Absolutely no way I would put the odds that high.  The issue is that this is an upper respiratory illness, which is basically an external system.  So far, no coronavirus vaccine has ever been medically approved.  Lots of data and articles if you get interested.  The good thing is there are a lot of folks working on it this time though — because of the media hype and funding, etc.  

I know we talked about WMT recently as a "grocery play."  I haven't been in WMT the stock in years.  I bought it , along with TGT and KR the day AMZN announced they were going to buy Whole Foods years ago.    That announcement cratered all three of these stocks a good amount, and I bought all 3.  Classic overreaction by Wallstreet.  I did well with them, but it was a trade for me the whole time..  In this environment, I'm not putting any new money to work.  Just holding on to the vast majority of the money which is in index funds.  I did do some selling as I mentioned yesterday in my stock portion of the portfolio..  Wouldn't you know it, PENN shot up almost +10% today.  Lol.