Fears arise for a variety of reasons. Sometimes they are grounded in real threats to business and stock values and other times they are specious and of only passing concern. It is sometimes difficult to tell one from the other. However, current fears look like, in hindsight, they will be seen as fleeting and of little fundamental impact.

The current fears can be summed up in three catchwords: tariffs, trade, and Trump. Tariffs and trade are related.

Clearly our current federal administration is intent upon righting trading relationships that it believes are biased against U.S. firms. Our country has been recording serious trade deficits buying more than it is able to sell to many of our trading partners. This imbalance is seen as unsustainable. It is evident our trading partners have a large interest in ameliorating this issue since they benefit far more than we do. We believe after bluster and the normal feint and parry of negotiations; some accords will be stuck. As for the potential Constitutional troubles of Trump, there is real uncertainty. However, our free enterprise system is not dependent upon any Presidency. A brief look at history shows that the political flavor of the concurrent Administration has very little correlation to the business cycle.

So, back to fundamentals, the current business environment is excellent.

We are coming off one of the most encouraging earnings reporting seasons we have ever had. The future is bright. Fear is normal, and investors currently have many opportunities to invest if they so choose. We believe the risks are not that great, but the rewards for staying the course are. After fear comes greed; always, and you can count on it. Stay steady, my friends.

The Lonely Bull