The market is falling into one of those weird patterns where stocks head in one direction in the morning (up, in this case), usually based on earnings reports, then head in the opposite direction in the afternoon (down in this case), usually because of troubling longer-term economic indicators, such as interest rates or the value of the dollar. Don’t give me that look—there’s no telling how deep in the muck we would already be if it weren’t for the corporate tax cuts now beginning to hit the bottom line, but the market is beginning to wonder, as indeed it should, how earnings growth of 10% to 15% across the board can be sustained when US workers (still the source of most of US corporate earnings) are only seeing total annual pay increases of between 1% and 1.5%.
If you don’t believe that matters, I’m sorry. I’ve done what I could to change that. Now, I’ll simply have to content myself with the knowledge that as you don’t believe what I’ve told you, you’ll probably keep buying even as the tax cut / share buyback bubble grows wobbly, thereby giving me and those who do believe me ample time to exit before the final pop. Given that that is my plan, I’m ethically bound to tell you so and remind you of the same right up to and throughout the event itself, which is why I do so now. That said, you’re always welcome to switch sides, and in any event, we’ve likely got at least two or three quarters of advancing earnings before the end. I, for one, intend to make my last plays in this bull market count. Here are a few I’ll be playing.
Remember to treat these ideas as just that, ideas, and do your own research before making any investment decision.