Thank You Earthquake

Posted by on December 1, 2017 - 9:37 am

The earthquake here, occurring after the stock market closed yesterday, actually had awakened me to something that had been gnawing at me for quite some time.  After 33+ years in, and around, Wall Street, I came to the realization that the time has come to stop ignoring what appears to me to be as soon-to-be-inevitable, horrific bubble-burst that could be the worst catastrophe ever witnessed in the financial markets worldwide.

Yes, I spoke more than once in recent times about how favorable this period of time can be for a huge stock market rally and how I didn’t want to be the Grinch who stole the “Santa Claus Rally”. But every fiber of my being is telling me to heck with being a “party-pooper” (or something much worse surely in many eyes) and to become:

Grinch Grandich Now!

Although I speak solely as a private investor, I encourage my clients to speak directly with one of my associates who handle the equity side of their investments (David Suckey, Tim Grable or our good friends at Shore Point Advisors). The U.S. financial markets have priced-in just about all good news other than the second coming of Christ. Accordingly, it would come as no surprise that the passing of the so-called “Tax Bill”, will mark (along with Bitcoin mania), the ultimate sell signal for a generation or more. This doesn’t mean it can’t go on further like a bottle rocket that occasionally goes as high as a “Roman Candle”, but if someone is counting on the full usage of their principle that they currently hold in equities over the next 1-5 years, I would want to be out of at least half my holdings between now and New Year’s. As worthy as it been to be fully-invested, 2018 and beyond screams under-investment in stocks and bonds with the dreaded “cash” becoming a significant part of most portfolios.

This may be the song many are singing at the moment in the equity market, but the time has surely come to invoke an old rule when it comes to investing:

And let me leave you with the one line the single greatest investor I ever knew said was his #1 golden rule – “I rather be a year too early versus a day too late.”

There’s no doubt in this former Wall Street Whiz Kid’s mind and soul that aggressive ownership of stocks and bonds going forward is as risky as speculating that Ben McAdoo will be the NY Giant’s Coach for the 2018 season. The chances for both, are slim and none.

DJIA 24, 274
S & P 500 2,648
Nasdaq 6,369

Posted in: Matters of Finance, News
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