Lord, I was born a gamblin’ man
David Pratter (parody of Allman Brothers Ramblin’ Man)
I’m not sure what it is about October that causes some vicious swings in the market but this year remained true to form. When viewed through the prism of percentages the two day drop was merely a blip, for newer investors I’m sure it was gut wrenching all the same. While the President was quick to cast blame on the Fed, this is the same man that was quick to criticize the Fed for keeping rates artificially low. Others cast the net a little wider to include trade tensions with China. Kind of like saying , “Look at the man in the mirror first!” We don’t have to look any further than PPG’s pre-announcement to identify the culprits: Accelerating raw materials and transportation costs, slowing China demand, weakening auto paint demand and a stronger US dollar. I wouldn’t be surprised if additional surprises are in store as more companies announce.
What does surprise me a little is the fact that costs like PPG is incurring has not yet worked into the CPI or PPI numbers yet. One pundit mentioned inventories were being drained so the full increase will be felt in the future – unless a China agreement is on the short-term horizon. Perhaps …
I was able to capitalize on the rout a little on Thursday by adding to seven positions – notably the foreign ETFs along with BOKF and CL. Unless markets go haywire again, I have only one more purchase on tap for this month.
To come full circle to the title of this post, our friend Jim Cramer is in the process of releasing his selections for 2019. He’s doing this in the format of Power Rankings which is a unique approach but one I wouldn’t touch with a ten foot pole. The reason: there is already an embedded mindset of investing being a form of gambling. Cramer says, “we’re rolling out power rankings for each sector of the stock market, just like how gamblers use power rankings to gauge the strength of football teams”. Hmm … but I will keep an eye on these selections. Mysteriously they stopped after three sectors were released, perhaps related to the market selloff? All I can say is during week 1, 11 of his 15 selections were under water … so what was advertised as a one week rollout is now on hold? Perhaps market conditions weren’t conducive for his track record? Any way, more to come on this front I’m sure 🙂