A Little Holiday Musing

Following the Thanksgiving feast and visits with family, it’s time to return to more mundane fare like the real world.  The headlines lighting up the news this afternoon leads me to believe we’re in for another rocky ride when the markets reopen.  From the Ukraine at battle stations to the US closing the border in California one has to wonder if this is a precursor for the final month of the total Republican regime until some semblance of sanity returns to Washington in January.  One has to wonder if lobbing tear gas from the US into Mexico is technically an act of war.  Or if the Senate cares to address the apparent multiple treaty violations associated with the border closing.  It’s times like these that I regret (a little) giving up my pursuit of law as a career move to focus on business.  As an aside, it would be an interesting exercise to determine how much success the administration could have enjoyed had they not been so intent on breaking the rules first rather than changing them.

On a somewhat lighter note, It’s time for the annual Christmas shopping countdown.  You know the drill … the ability of retailers to forecast properly and execute impeccably during the season.  It appears the season began a little early with advertising starting around Halloween, but by and large most are putting on a brave face on their prospects.  Anecdotal evidence points more to lackluster with ample parking available locally, while retailers’ response is “an ongoing migration to online shopping”.  Perhaps, but here’s hoping additional “black eyes” don’t dampen the holiday spirit or the recent University of Michigan Consumer Sentiment index doesn’t have legs.

More analysts are coming around to the view I’ve held most of the year that the 2018 boom year was a one-off primarily due to lower taxes.  Forecasts are starting to arrive  and the consensus is for lower GDP growth.  The sad part is that much of this is self-induced.  Tariffs hitting the farm belt and now lower oil prices hitting the oil patch (Trump takes credit – I think it’s more likely a bribe. )  If credit is due its more likely the result of all the waivers he granted regarding Iran sanctions.  Regardless, some wells here in Texas are being capped and cap-ex is dwindling.  Oil in the $40-60 range makes some production unprofitable – and with them jobs, support systems, etc.  Farmers felt the pain earlier and now the pain is shifting.  One investment I was considering I’ve decided is too risky (for me) in this environment (oil patch support services).   Earnings reports also carried a cautionary tone.  I think it is now time  to be in a ‘wait and see’ mode.

Next week – November Results!


2 thoughts on “A Little Holiday Musing

  1. Hey Charlie – what does the ‘wait and see’ approach mean for you personally? Are you holding off on doing anything at all until you see how things play out? And if so when will you know that things have ‘played out’?

    Personally I’ve never really taken a ‘wait and see’ approach – there’s always uncertainty, and I have no clue about what will happen. I certainly don’t have any of the wisdom you display here to even begin speculating on the future, but happy to go along for the ride 🙂

    Cheers, Frankie

    Liked by 1 person

    • Good question! Sorry I was a little ambiguous on that reflection. 30% of my portfolio categorized as speculative – some more so than others. These investment types will be a lower priority and my re-investments/new money will go more into beefing up my other 70% – which are more defensive.

      One example is GE. My intent was to build up this spec position a little based on their prior announcement on the healthcare spin. This week it was leaked they were possibly looking at an IPO rather than a spin which changes my approach. On GE I will now wait – If an IPO is floated for healthcare, I’m in. Only if it is a spin will I add to my position. So on this one (and like the oil field service one I was investigating) it’s a “wait and see what happens” as external forces (inflation, interest rates, slower growth) may have a greater impact going forward.

      Thanks for the question!


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