Personal Economics 101

At least is was somewhat entertaining. Normally for lunch I'll turn on a re-run of Big Bang or Last Man Standing, or some such trash, for some good laughs -- or at least lighten the day. At least Jon Stewart was funny.  Today, it was the talking heads on Fox Business and CNBC. I want their job. Basically they all had to say the same thing. "This might happen... But then this might happen... But then it might not...And if this happens, who knows?" Just from three guys and gals, who are supposedly "experts" in their field.  Guess what they concluded? Markets would close up, not much change, or a small rally at the close in anticipation of this weekend's meeting. They were a third correct. Pretty good, thirty-percent odds. (It closed with a very small rally, except for the last 30 minutes. Oops) Rich (or wealthy, or the well-off, or happy, or successful)  people don't watch TV. Ask Gates or Buffet. RAFB.  Now, I want to know how to I apply for a j...

Not much happening in the markets today. I guess everyone is waiting on the G20 which starts tomorrow, and of course the meeting between President Trump and  China’s President Xi Jinping over the on-going trade wars. Can there be an agreement? My prediction (which is actually a guess), is that they'll come up with some meeting of the minds, which would be in everyone's best interest. But both are tough negotiators. So it will be interesting.  Of note was the jobless claims report .  Initial claims are up for a third straight week, 10,000 higher in the November 24 week to a 234,000 level that is outside high estimates for 228,000. The 4-week average is up a sizable 4,750 to 223,250 which is suddenly the highest reading since July. There are no special factors distorting today's report.   Also moving higher are continuing claims, up 50,000 in lagging data for the November 17 week with this 4-week average up 20,000 to 1.668 million. This reading is coming up from ...

\ You read that right. The U.S. is now the largest oil producer in the world, according to the EIA, producing some 15 million BOE per day, surpassing Russia and Saudi Arabia. (Remember back when Jimmy Carter said in 1979 the answer to our energy problems was to wear a warmer sweater...but you probably don't. He actually said this on national TV). The United States is the top oil-producing country in the world, with an average of 14.86 million b/d, which accounts for 15.3% of the world's production. This is down from 15.12 million b/d in 2015, but it was enough to land the United States in the No. 1 spot, which it has held for the past four years running. (Source: Investopedia.) Guess who takes credit for it? Granted, this increase in production began in 2012, but only because of private industry and the fact that the price of oil was at nearly all-time highs. And it dipped in 2016 because of Obama's anti-oil policies!  But here he is again :  Former Presid...

I wish I could give a speech and have the market go up like it did about that time. And not just one market, but curriences, gold, etc. All except for oil, which had the opposite reaction. But it was a busy day on the economic calendar. Here's a recap, if you can get through it all. On the negative side, new home sales were down. Not unexpected with mortgage rates going up. This is an indicator to watch. The consensus was 575,000, and the actual was 544,000. Two wildcard components are slightly more exaggerated in the third quarter's revised GDP data while readings on the consumer and housing are mixed. At the headline level, the second revision to third-quarter GDP is unrevised at a very strong 3.5 percent annualized growth rate but inventories, contributing 2.27 percentage points to the total, added a little more than the first revision while net exports, subtracting 1.91 points, pulled down GDP by a little more. Consumer spending's growth rate of 3.6 percent is 4 tenth...

Here’s the big challenge of life: You can have more than you’ve got, because you can become more than you are. That’s the challenge. And of course, the other side of the coin reads: Unless you change how you are, you’ll always have what you’ve got.” – Jim Rohn An excerpt from The Nature of Personal Reality , Jane Roberts, 1974 Experience is the product of the mind, the spirit, conscious thoughts and feelings, and unconscious thoughts and feelings. These together form the reality that you know. You are hardly at the mercy of a reality, therefore, that exists apart from yourself, or is thrust upon you. You are so infinitely connected with the physical events composing your life experience that often you cannot distinguish between seemingly material occurrences and the thoughts, expectations and desires that gave them birth. If you have strongly negative thoughts, these actually form bars between you and a more fulfilling life. Still, you often look through the bars, not seeing...

There are all sorts of headlines out there as to why the markets didn't do much. The Fed didn't spook anyone. The trade "war" isn't resolved and so not much news there.  It's really quit simple. Buyers and sellers were pretty much in equilibrium, without much pressure on either side. I'm waiting for oil and/or gold to make a strong move, but not much there either. Unless you count the bear market in oil over the last six weeks, but it will turn at some point. And gold did drop about $10 per ounce today. That's less than 1 percent. The consumer confidence index, at 135.7 in November, continues to hold in the mid-130s area and not far from the all-time high of 144.7 reached in 2000. November's strength is in the present situation which is a favorable indication for holiday spending, at 172.7 for an 8 tenths gain from October. Expectations, however, eased by 4.1 points to 111.0 as optimism over future job and income prospects is easing slightly. Y...

Don't take one day of a 354 point rise in the Dow to start the celebrations. (The markets may open flat today -- or not -- based on the overnight futures).  Patience is the key to any good investment strategy.  Most the the increase was because of Amazon. Who cares? How about the other 499 stocks? Hope you get my point. I've never cared about the FANG stocks much. So maybe I missed on the big upswing. But I'll bet I miss on the big down side. What goes up fast goes down faster.  Here's a weekly chart of the boring Russell 2000 Ishares ETF (IWM), which represents 2,000 smaller companies. Nothing to write home about yet. keep your power dry.

I'll be honest. I don't have a clue where markets are going. Futures markets opened at 5 pm CST and it's been like watching paint dry. The indexes are up slightly, which might bode well, but the London and Frankfurt markets haven't woken up yet. If you have a mind to get up at 3 am CST to take a look, go ahead.  Oil at 9:30 pm 11/25/2018 Oil is flat at 50.79 a barrel as I write this. Gold is boring also. The dollar is up, so that should put pressure on the Euro. And the British pound, which don't seem to care much. Small caps might bear watching later. The Russell 2000 futures show a little action. Dow futures are up about 200.  But generally speaking, watch your favorite show and have a good night's sleep. Be up around 7:30 am CST to have another look. Might be some action then. 

If we stick to economics only, and don't stray into ethical, political or other types of issues -- impossible to do since half the country is brainwashed -- then the argument for or against immigration depends on both the specific economic environment and the point of view of the individuals involved. The bottom line in economic law: as supply rises, prices come down. This hurts someone.  From U.S. News and World Report: A MASSIVE IMMIGRATION  study...attempts to break down whether mass influxes of foreign workers ultimately are a net boon or burden for the domestic economy. The answer: It's complicated. The  National Academies of Sciences, Engineering and Medicine  released a roughly 500-page report that pooled data from more than a dozen individual economists, professors and immigration-minded specialists. (My note: probably got 500 opinions). It says America's immigrant population climbed by more than 70 percent between 1995 and 2014, when it stood at 4...

Ah, Thanksgiving. Where many Americans don't have a clue what to be thankful for. Hey, try living in a third-world (or even second-world) country first.* Then you'll thank God you are an American, whether 8th generation or 1st.  *Before you say I don't know what it's like to live in other countries (or even visit there) try Thailand, Panama (and not the beach), Turkey, Italy, Chile, Ecuador, etc...). I would add Germany, but there weren't third world when the wall came down in 1989, but they're getting there...). Try sitting on top of an M-113 in the jungle -- then have a little Thanks.   Not to offend anyone, or even some, it is a holiday for families to come together. I have nothing wrong with that. Except for all the stories hear of the dreaded holidays spent with dysfunctional families. If yours isn't celebrate. Otherwise go to South Padre island.  But back to my own rather nice get-together before the Turkey was served up, politics inadvertentl...

Not a pretty week for the bulls. The last time crude oil went into a bear market? It began in June 2014. Oil tumbled from around $107 to a low of just above $26 in January 2016.  U.S. equities did not fall as much. But the S&P 500 suffered at least three intermediate corrections of 10% to 15% over that time frame. The S&P 500 eventually hit new highs in July 2016. Volume on Friday fell sharply vs. Wednesday as Wall Street closed its session at 1 p.m. ET, rather than the usual closing time of 4 p.m. But compared with the turnover at 1 p.m. on Tuesday (roughly 1.4 billion shares) and at 1 p.m. on Wednesday (981 million), Nasdaq turnover also ran lower at that hour.  Index Nov 16 Nov 23 +/- +/- % S&P 500 2736.27 2632.56 - 103.71 - 3.79 Nasdaq 7247.87 6838.98 + 159.03 - 2.19 DOW 25413.22 24285.95 + 576.08 - 2.29% An interesting point for me this week is that our local ABC affiliate, on their 5 pm news, finally ran a news story (rather tha...

There are seven million job openings, waiting to be filled. Mike Rowe, the Dirty Jobs guy, thinks we need to change the way we think about work.  His speech at the Independent Women's Forum is worth watching. Listen closely. (Hint: you can skip to 16:00 to get the real message). "What we need to do in our country is change the way people think about work. We have to change the perceptions, the misperceptions, the myths, the stereotypes and the stigmas that are affirmatively keeping millions of kids in this generation from pursuing the millions of opportunities currently in the offing...We have to look at our language.  We have to look at our messages...We need to tell better stories of men and women who master a trade, and then go on to succeed. We have to put these people on a poster. We have to celebrate them.  We don't need American idols; we need American icons. Icons of work...We need to stop talking about education in a cookie-cutter fashion that leaves us...

Markets are down again today. After gapping down at the open, the DJIA was down more than 500 points at 1 pm CST, and both the Nasdaq and SP 500 are down about 2 percent.  Oil (WTI) was down $4 a barrel to less than $53. It hasn't been this low since last November.  As I indicated yesterday, the Nasdaq fell 3 percent below its 200-day moving average. The SP 500 and Nasdaq hit that level today.  However,  the SP 500 index is still holding above the October low, which is a key level for chart watchers. This is not a market to be buying. The February 2018 low on the QQQ (Nasdaq ETF) was about 150. Current level is about 159.  What happens next is anyone's guess. Patience is the key for now.

Update at 3:00 PM. Market close. Short rally of a few points reversed before the close. S&P 500 closed down 45, but off session lows.  Update at 2:30 PM. Markets are showing small bounce after hitting supply zones mentioned below.  Using the three percent rule on the 200-day moving average, the Nasdaq moved into bear territory this morning.  Both the S&P 500 and DJIA are near this level, but haven't crossed over to bear status yet. There is some demand for the SPY at 267-268. If the prices bounces off in this zone, we may get a small bounce. No way to predict this of course.  At this point, while I can't really make recommendations, it's probably safer to be in money markets right now. I sold off one ETF for a break even this morning and moved it to a money market that pays 2.08 percent. I tightened my stop on my SCHD dividend ETF to manage my risk.  Click to expand. Purple line is the 200-day MA for the QQQ ETF, which is a Nasdaq index fund...

I suspected the state of personal savings were bad, and they are indeed. From USA Today : "Experts agree that for true protection from financial emergencies, it's best to sock away up to six months' worth of living expenses in the bank. For the typical household in a major metro area, that's about $23,000. But the average American has less than $4,000 in savings, while 57% of U.S. adults have less than $1,000 to their names ." I knew the savings rate was low, but this is a disaster waiting to happen. But is this really true? How can it be? When interest rates are held at artificially low levels (by the Fed) then individuals and business tend to save less and borrow more. This can create bubbles and crashes .  When it comes to savings, depends on what your are counting, whether retirement savings or emergency funds or both. But the numbers are astounding. A great number of people are not prepared.  A new study finds the median American household has $4,8...

Stay invested! Diversify! You can't time the markets! Don't sit in cash!  These are all the things so-called experts -- the talking heads on TV or your broker or fund manager -- are telling you. I have different opinion, and so does Phil Town in this nine-minute video. 

Our simulated portfolio, based on the Investor's Business Daily Big Cap 20 screen, created on Oct 30, 2018, is now up about 7.5%. This is the third test of using this screen that I've done in the last 12 months. All have been successful.  Symbol Last Today's Chg Total Chg Total Chg % Profit Time ULTA 313.56 +1.75 +44.45 +16.52% $3,328.80 11/16/18 INTU 211.44 -3.10 +11.00 +5.49% $1,078.00 11/16/18 MKC 150.00 +1.36 +6.09 +4.23% $846.51 11/16/18 ROP 297.79 +3.34 +20.54 +7.41% $1,478.88 11/16/18 CI 213.72 +0.92 +5.48 +2.63% $520.60 11/16/18 Cash Value Total Fees Active P&L Today's Return Entry Value Current Value Closed P&L Total P&L $420.39 $4.95 $7,252.79 $344.37 $100,000.00 $107,252.79 $0.00 $7,252.79 Some strategies for using this screen: Invest the same amount in each of the top five stocks. For example, this test portfolio has $20,000 in each of the five stocks.  Use a stop loss on each stock. You still have to protect yourself if...