In The Lonely Bull

Summers in Florida, we often have something called a sun shower.  It’s when we get rain with the sun still shining; a little rain, but hardly a storm.  That is what we think we are now experiencing in the U.S. stock market.  The Dow Jones Industrial Average is up 9 weeks in a row since the beginning of this year.  The S&P 500 index is up 8 out of the past 9 weeks.

As of last Friday, the Dow was up 11.6% and the S&P 500 up 11.8%To expect this kind of a run to continue at this rate is simply foolish.

So, the stock market this week has had a setback.  Investors focused on evidence that there is economic slowing in some other parts of the world.  That concern was the catalyst for the 4th quarter correction; this is not new news.  Certainly, trade concerns continue.  We believe that this is likely to be relieved with some negotiated settlements.

Trade concerns will return from time to time as the U.S. attempts to redress the many imbalances that have entered into the system over the past few decades.

In the meantime, many U.S. companies are performing very well.  Many have signaled optimistic outlooks for this year.  However, not all, this is not an environment that “floats all boats”.   The strong are getting stronger and some of the weak will continue to disappear.  Some industries are undergoing radical changes with new entrants disrupting old patterns.  That is the capitalistic process of creative destruction.  Opportunity abounds and we are finding many exciting places to invest.  Recent money flows are still quite positive and point to higher stock prices.  Stay steady, my friends.

The Lonely Bull

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