I can think of a few things but the market seems to be back in a “capital gain for every pot” mode. I’ll spare you the bear thesis here as it is well known by most and I’m not going to say “I’m constructive on the market at these levels” or “For the long term investor...”, you deserve better than that. Can I just say that I’m concerned?
Don’t get me wrong I’m not calling for a 40% pullback from the highs or a U.S. recession, I’m just saying the upside here is probably less than the downside for the next six months. It would be ironic however if the year’s low coincided with a famed chartist comparing the market to 1929 and a Harvard finance professor essentially calling for a run on Bank of America.
I’m not even going to say the “weather’ excuse is overplayed as I’ve worked in the auto and housing industries and more importantly, have bought houses and cars and didn’t want to do either when it was 20 degrees and snowing, maybe I’m in the minority. But the jobs number is concerning.
Even if you’re willing to throw out January’s print of 113,000 due to the aforementioned weather, the December revision was HORRIBLE. If you recall when the December number (74,000) was released every talking head on television quickly dismissed it and said it would be easily revised higher. It was last week, a whopping 1,000 more people were hired than first reported, many I suspect were expecting another zero on that revision. To be fair, it will likely be revised again, but the odds seem against a '2" appearing ever appearing in front of it.
We’re also hearing about more layoffs across many sectors and hirings by large corporations seem to be few and far between. Available jobs often don’t match the skills of the unemployed which is why we have such an issue with the long term unemployment.
At a certain point we need more people earning a good living wage, paying taxes and spending money on smartphones and skinny jeans. I’m thinking that point is now.
So sell everything? No, there are plenty of stocks that have solid fundamentals and are flush with cash, many in technology. You’ll drive yourself crazy trying to pick tops and bottoms. If you own TSLA or NFLX, yeah go ahead and sell those, you might miss out on 20-40 dollars of upside but you’re probably going to sidestep 80-100 dollars of downside. Also, secret tip, once you sell a security it is legal to buy it back even at the same price! I’ve done this before and made money, but back to jobs.
The real issue as we sit here on February, 11 is that these so-called “one-offs” for weather won’t be confirmed or denied until possibly April. What I mean to say is that the April jobs report will be the first indication for some on whether the U.S. economy is gaining momentum. Until that time there will be plenty of confusion and volatility. Pick your spots, be nimble, stay with what you know and doing nothing is absolutely a strategy. Not losing money is highly underrated. Most importantly, no one cares as much about YOUR money as you do. Good luck.