March 29, 2019. When you are in this investing racket full time, as we are, you tend to spend time in the financial chat rooms.
One topic that keeps coming up is the risk of over-weighting individual positions. Yesterday we were reading about someone who had a large position in a Company that was imploding. A good example of this is General Electric GE. We know there were a lot of people, and employees that were over-weighted and got hurt in the recent decline of GE.
Never, never put more that 4% of your portfolio in a single position….and if it’s risky, make 2% the limit. Yes we admit to making this mistake in the past, and losing money. Don’t make the same bad decision that we have made.
Good News. MadDog Maddow on batshit crazy liberal MSNBC: ratings collapse.
Maybe now, though, the Cult of Maddow is cracking. I doubt it, but there is some hope in the latest numbers…
On Monday March 18, four days before the Mueller Report proved her a liar, 2.977 million people tuned in to Maddow’s carnival bark.
This past Monday, the 25th, three days after the Mueller Report proved her a liar, only 2.513 million tuned in, a loss of nearly 500,000 viewers.
Lawrence O’Donnell — whose show immediately follows Maddow and who is almost as obsessed with deceiving his audience about those damn, dirty Reds — took a similar hit: a drop from 2.2 million to 1.845 million.
Investors out there are so consumed with the Mueller investigation and general corruption in the FBI and DOJ , they are NOT watching what is REALLY going on in the stock and bond markets. We are posting excerpts from articles below with links to the full articles. You really need to read what is going on.
Economies are slowing. Rates are declining and there are growing dangers of recession next year. If you are heavily invested in stocks (not us), you ESPECIALLY need to stay aware of changing conditions.
In our opinion, income-oriented investments are the best choice going forward.
Bull markets, low unemployment, elevated consumer and investor sentiment, economic growth, and inflation are near peaks at the end of the cycle. As Eric noted then:
“Bull markets began far before their accompanying recession did. The bull markets started an average of 1.8 years before. This happens because the start of a recession is marked by a decline in real economic activity, yet long-term Treasury yields start to move lower from the mere hint of a slowdown in activity. This is important because many familiar commentators and banks (Ray Dalio, Ben Bernanke, Nouriel Roubini, Mark Zandi, Societe Generale, JP Morgan) are warning of a recession in 2020. This 1.8-year average combined with a mid-2020 recession would suggest a U.S. Treasury bull market beginning around now.”
Reasons for Fear
The following considerations fly in the face of the high level of complacency ruling the financial markets:
- The global economy is slowing
- Growth in European economies is slowing dramatically, including Germany where 10-year bond yields dropped below zero for the first time since 2016.
- China, representing 30% of global GDP growth, is weakening rapidly.
- Domestic GDP is expected to rise by only .50% in the first quarter according to the Atlanta Fed.
- The trade war with China, and to a lesser degree Europe, could flare up on a single tweet or statement and cause market and economic disruptions.
- Despite being ten years into an expansion and unemployment near 50-year lows, the Fed decided that Fed Funds above the historically low rate of 2.75 over the next two years is harmful to the economy. What does the Fed know that we do not?
- The potential for a hard BREXIT is growing by the day.
- Political drama is heating up with an election and possible Mueller findings.