Trump's Election and the Markets

[Russ Smith]

Hate to say it but I think today might have been VERY bad news for the markets. DOW fell below 24000 and all the markets tanked even after a brief rally after the Fed.

Honestly what was propping up the market IMO the last month or so was all the stock buyback programs from companies who got tax breaks thanks to the Trump tax corporate giveaway. Earnings look great but it's almost entirely because of the tax cut.

The Fed chose not to raise interest rates, the market reacted well at first until people digested it and realized, it was because the Fed was afraid it would speed up the inflation that Trump already started with the tax cuts and his stupid trade war.

So we got a triple whammy and the markets all turned negative in the last few hours.

Between that and FB announcing they're getting into online dating which killed my Matchgroup stock(I'm still up over 200% on it but 25% drop in 2 days since FB announced) has made this week pretty crappy for me in the markets.

Getting really nervous about the current markets though, between inflation, the trade war, and the stuff with Trump and Mueller heating up, there's too many potential triggers for a downturn.

 

[AZCB34]

Markets are starting to hit and break support levels. This could be the long awaited correction picking up some steam

 

[Brian in Mesa]

Well I guess it's good I sold Amazon when I did

It's almost $1,600 per share. When did you sell...?

 

[Russ Smith]

It's almost $1,600 per share. When did you sell...?

1500. I missed a bit but I still think it's entirely possible Trump is in office long enough to put a dent in that.

I've also fundamentally changed my perception of Amazon as a company, they're not nearly as good to their employees as I thought.

 

[Russ Smith]

This administration seriously needs to keep Trump away from Twitter.

markets way up this morning, Trump goes to Twitter, within 10 minutes the profits are cut in half. then about 30 minutes ago he goes on again and says he'll reveal his decision on Iran tomorrow, and the gains get cut in half again.

And he still thinks he's the reason the markets went up after he took office. Everytime he makes an announcement, he tanks the markets

 

[iLLmatiC]

Hate to say it but I think today might have been VERY bad news for the markets. DOW fell below 24000 and all the markets tanked even after a brief rally after the Fed.

Honestly what was propping up the market IMO the last month or so was all the stock buyback programs from companies who got tax breaks thanks to the Trump tax corporate giveaway. Earnings look great but it's almost entirely because of the tax cut.

The Fed chose not to raise interest rates, the market reacted well at first until people digested it and realized, it was because the Fed was afraid it would speed up the inflation that Trump already started with the tax cuts and his stupid trade war.

So we got a triple whammy and the markets all turned negative in the last few hours.

Between that and FB announcing they're getting into online dating which killed my Matchgroup stock(I'm still up over 200% on it but 25% drop in 2 days since FB announced) has made this week pretty crappy for me in the markets.

Getting really nervous about the current markets though, between inflation, the trade war, and the stuff with Trump and Mueller heating up, there's too many potential triggers for a downturn.

Co-worker just took $5K of his emergency fund money and bought into a mutual fund that tracks the broad market. I told him this was super risky to do but he did it any way. I still think the market will continue to drop. There are plenty of companies that are on sale right now. I just initiated a small position in Pepsi and I'm slowly building my position in 3M.

 

[Russ Smith]

Co-worker just took $5K of his emergency fund money and bought into a mutual fund that tracks the broad market. I told him this was super risky to do but he did it any way. I still think the market will continue to drop. There are plenty of companies that are on sale right now. I just initiated a small position in Pepsi and I'm slowly building my position in 3M.

So far I've been wrong the markets went UP after that. Today was more up although I had several stocks drop today so I'm probably down overall today.

Friday was pretty good for me, flat market day but TTD went up 45% on Friday.

I actually bought 2 biotech stocks today, the overall market is getting tougher right now so I took a bit of a risk.

 

[Russ Smith]

CNBC calling it like I see it. Yesterday the markets tanked and many were reporting it was due to unrest politically in Italy. CNBC was reporting it was almost entirely because Trump contradicted weekend reports that US and China were close to a trade accord by saying he wsa going forward with tariffs against China. Today the markets are way up and CNBC just essentially doubled down and said as we said yesterday the primary reason for the drop yesterday was Trump again causing fear of a trade war, as soon as that was downplayed, the markets levelled off(yesterday) and rose substantially today. the Italy situation was not good, but it was not the cause of the US markets dropping,Donald Trump was.

 

[iLLmatiC]

Russ what stocks are you looking at right now?

 

[Russ Smith]

Russ what stocks are you looking at right now?

My stocks are going bonkers right now I'm almost hesitant to name them because I might jinx them.

Last week I had a day where 3 stocks all went up at least 10%. I bought ANET(Arista) a couple of weeks ago up 13% so far, VEEV(Veeva) is up 25% in a month I think, SFIX(Stitch Fix) has been good and TTD(Trade Desk) has been going bananas, I'm up 182% and I think I've owned it 3-4 months.

SPLK, NEWR and WIX have been pretty flat. Virtually all of these were Motley Fool Stock Advisor picks.

The ones I got wrong, well I sold AMZN around 1500, it's over 1900 now. I sold SQ and SHOP way too early, made money but missed lots more by selling early.

Also MELI(Mercado Libre). I nearly sold it after it went nuts, then it fell hard for accounting reasons, and now it's shooting back up. Had I actually sold it when I almost did, and then rebought it after the fall I'd be even happier but I'm up over 100% on it so I guess I'm glad I stuck with it.

I also picked wrong when deciding between INTC and AMD, I picked Intel, it's up since I bought it but AMD has tripled in a year. I underestimated how big of a push AMD was getting from Crypto. People were buying new machines for mining and AMD was reaping the benefits. That has now backed off but I guess AMD has continued to do really well.

I'm getting a bit nervous though I think many of my stocks are getting the big earnings boost right now because of the tax plan and the tariffs causing people to buy early out of fear of inflation. I suspect after this quarter earnings are going to start to come down and stocks may do so with it.

I sold all my underperforming stocks in my regular trading account, I have about 6 stocks left there all I've owned for awhile. In my IRA's I'm a bit more risky. At one point I was 95% stocks in my Fidelity IRA's I've pared that back a bit but still over 80%, getting a bit nervous I may pare that back more.

Should add most of the stocks I sold as underperforming were stocks I bought largely for the dividend. If I get to a point where I don't trust the market I may go back to more high dividend stocks but for the most part the ones I had were not doing well share price wise so I made more money with other stocks that had little or no dividend but share price went up. I expect that's eventually going to change and then I'll start buying dividend stocks again.

 

[iLLmatiC]

That makes sense what you're doing. At this point I'm still interested in growing my income by purchasing Dividend Kings and Aristocrats. I've been looking more at growth stocks lately though and have initiated a position in NVIDIA.

AbbVie looks like it's trading at a fair price for now.

 

[Russ Smith]

That makes sense what you're doing. At this point I'm still interested in growing my income by purchasing Dividend Kings and Aristocrats. I've been looking more at growth stocks lately though and have initiated a position in NVIDIA.

AbbVie looks like it's trading at a fair price for now.

nvidia is interesting it's another stock that made a ton of money off crypto because miners were buying computers that had Nvidia cards in them.

But they're so diversified I think it's a very safe stock.

Mercado Libre is the stock I own now that I'm on the fence about keeping. Not only did it have tax issues but now the economy in Argentina is hitting, and there's always the very real threat Amazon and or Walmart finally make big inroads into those markets and take MELI down. I've more than doubled my money in it and if the economies in some of those countries Meli is dominant in don't tank, they will continue to do very well but it makes me nervous.

My biggest regret is not selling GE, my girlfriends stock, without telling her, she wanted to ride it out, she's had it for years, got it at 13, so she's gone from nearly double, to just under break even with it and the dividend is being cut too. But it's her stock so I went with her decision. No actual loss of course she hasn't sold but there were so many other stocks that money could have been in the last year.

Forgot to add the why on GE being so bad. When she bought GE she bought 3 stocks, FB, Cisco and GE. The 4th stock on her list she decided she didn't have enough cash to buy so didn't buy it, Ulta. It was at 9 something then, it's at 260 now and has been over 300 and the way she buys and holds she could have legitimately held it for a 30X profit.

 

[iLLmatiC]

Ouuuuuuucchhh...GE has been a dog for sure but like you said she hasn't realized loss yet until she sells. And Ulta hurts big time.

 

[82CardsGrad]

nvidia is interesting it's another stock that made a ton of money off crypto because miners were buying computers that had Nvidia cards in them.

But they're so diversified I think it's a very safe stock.

Mercado Libre is the stock I own now that I'm on the fence about keeping. Not only did it have tax issues but now the economy in Argentina is hitting, and there's always the very real threat Amazon and or Walmart finally make big inroads into those markets and take MELI down. I've more than doubled my money in it and if the economies in some of those countries Meli is dominant in don't tank, they will continue to do very well but it makes me nervous.

My biggest regret is not selling GE, my girlfriends stock, without telling her, she wanted to ride it out, she's had it for years, got it at 13, so she's gone from nearly double, to just under break even with it and the dividend is being cut too. But it's her stock so I went with her decision. No actual loss of course she hasn't sold but there were so many other stocks that money could have been in the last year.

Forgot to add the why on GE being so bad. When she bought GE she bought 3 stocks, FB, Cisco and GE. The 4th stock on her list she decided she didn't have enough cash to buy so didn't buy it, Ulta. It was at 9 something then, it's at 260 now and has been over 300 and the way she buys and holds she could have legitimately held it for a 30X profit.

I truly believe that at some point in the next 6-18 months, a correction will hit. There is simply nothing out there to justify some of the outrageous PE ratios now so prevalent. Add in the unsustainable price levels in the real estate market, being pushed ONCE AGAIN by risky, exotic lending... And not to mention the whacky lunatic that inhabits The White House who, on any given day can turn world markets upside down with his stubby little fingers tweeting incoherently...

Nvidia is a truly great company. I have had them as a client for over a decade now. Love them. But as for their stock, man... gotta wonder how much more upside can be seen before the correction hits.
And sadly, I own GE as well... UGH...

 

[Russ Smith]

I truly believe that at some point in the next 6-18 months, a correction will hit. There is simply nothing out there to justify some of the outrageous PE ratios now so prevalent. Add in the unsustainable price levels in the real estate market, being pushed ONCE AGAIN by risky, exotic lending... And not to mention the whacky lunatic that inhabits The White House who, on any given day can turn world markets upside down with his stubby little fingers tweeting incoherently...

Nvidia is a truly great company. I have had them as a client for over a decade now. Love them. But as for their stock, man... gotta wonder how much more upside can be seen before the correction hits.
And sadly, I own GE as well... UGH...

Agreed there will be a correction it's when not if. What's interesting IMO is it seems like the market has baked in the Trump and Russia stuff. I think he'll probably find some other way to trigger a correction but I don't think it's going to be as simple as Mueller indicts him and the markets tank, I think the markets are already sort of expecting him to be indicted.

 

[82CardsGrad]

As always... it's a crapshoot as to guessing when to alter your investment approach... But, more and more, the warning bells are being rung every louder:

https://www.cnbc.com/2018/09/19/the...ats-next-bank-of-america-strategist-says.html

 

[Russ Smith]

As always... it's a crapshoot as to guessing when to alter your investment approach... But, more and more, the warning bells are being rung every louder:

https://www.cnbc.com/2018/09/19/the...ats-next-bank-of-america-strategist-says.html

Yep. Today was wacky for me, the Dow was way up, the Nasdaq just barely down, yet I lost money in every single trading account I have. I guess I'm not only Nasdaq heavy but heavy on stocks that particularly did poorly today.

I've started paring stocks again that aren't performing. I sold Mercado Libre recently, at one point I was up about 130% on it, sold it up about 80%, the financial issues in Argentina really hurt it. Most of my stocks were domestic so I was a bit remiss in paying attention to MELI.

I think what's going to stop the bull run is that the tax cuts are baked in, the tariffs and that are going to limit how much money companies earn now. Tax cuts gave first quarter bump, tariffs 2nd quarter as people bought to beat the tariffs, now neither is going to happen.

Someone from Fidelity called me last week to ask me if I was aware how stock heavy I was in my 2 IRA's with them. I had actually just sold MELI and was looking at some others but it was interesting. She specifically told me customers complained Fidelity didn't do more of that outreach during the last market collapse. She said not that we're predicting anything like that but we do want to make sure our customers are aware of the risk of being that stock heavy.

 

[Russ Smith]

Nothing to do with Trump but anybody else check out Canadian pot company Tilray recently? Opened today at 233, got as low as 151 and as high as 300. Closed up 38% and is down big after hours. It was up about 20% the day before. You could have bought at 100 on Friday and sold at 300 today.

 

[Russ Smith]

worst week in ages for me in the market. Down about 3% in my 2 Fidelity IRA's, in part because I own Stitchfix which fell from 46 to 26 this week.

My timing was impeccable, I decided last week to convert my 2 IRA's into managed accounts with Fidelity because I think the market is getting too volatile and didn't want to be self managing right now. It took until Thur to finalize all that. SFIX fell 35% in one day and then nearly 10% today. Fidelity sold(for free) much of my holdings as part of them taking over but I still own some SFIX it appears. Had I made the decision a week earlier I would have avoided the big drop but that's entirely why I made the decision, I was a bit too risky for a volatile market. I only owned it in my IRA and I'll still self manage my Etrade account but I'm going to let Fidelity manage my IRA's there and I'm leaving my vanguard IRA's in the funds they're in, I had been considering converting them and buying stocks in them too but I just think it's too volatile right now.

 

[Russ Smith]

Boy is tech and growth stocks getting hammered. I lost a bit before my switching to Fidelity managed finished, but if I hadn't done that I'd be getting killed right now since so much of those 2 IRA's were in tech and growth stocks.

I still have some in my etrade account that are getting hit hard but in general I timed it pretty well in letting someone else take over managing my funds. Which is exactly why I did it, I'd been so aggressive I got concerned that I was going to be too emotionally attached to those stocks to make sound decisions.

 

[Russ Smith]

Don't even want ot look at the damage today, NASDAQ closed down over 4%, Dow down 830 points, over 3%.

Seems like a trade war and rising inflation and interest rates are not a good thing for the stock market. The beauty is Trump thinks he's winning because China is now struggling too with the same trade war harming them. Great, you screwed over both countries markets now.

 

[82CardsGrad]

Don't even want ot look at the damage today, NASDAQ closed down over 4%, Dow down 830 points, over 3%.

Seems like a trade war and rising inflation and interest rates are not a good thing for the stock market. The beauty is Trump thinks he's winning because China is now struggling too with the same trade war harming them. Great, you screwed over both countries markets now.

The 10-year hovering around 3.2% is also a factor... or indicator of rising rates, rising CPI and PPI and more fears of inflation. Trump has zero appreciation for market fundamentals. He is truly a 13 year-old spoiled rich brat, who stole his daddy's maserati and is taking out for a super-dangerous joyride. The scariest thing about that is that we are all passengers in the damn car!

 

[GoldGloveschmidt]

The 10-year hovering around 3.2% is also a factor... or indicator of rising rates, rising CPI and PPI and more fears of inflation. Trump has zero appreciation for market fundamentals. He is truly a 13 year-old spoiled rich brat, who stole his daddy's maserati and is taking out for a super-dangerous joyride. The scariest thing about that is that we are all passengers in the damn car!

At least, when it comes to the market, you don't have to be a passenger.

If you're close to retirement, get into something Trump-proof and safe.

 

[Russ Smith]

At least, when it comes to the market, you don't have to be a passenger.

If you're close to retirement, get into something Trump-proof and safe.

The problem is then you get into the don't time the market situation where if you still need more than 2.5% you have to figure out when to get out and back in.

Yesterday I got all ready to watch a little tv, saw the market, saw CNN talking about Trump's stupidity again, he said something else about the Fed being the problem, and I said screw it, packed a lunch and went fishing for a few hours to just get away from it. I've never seen this many experts on tv saying the same thing, the problem with this market is you can't just trade the fundamentals, you always have to account for that stupid oranage buffoon saying or doing something that hurts the market too. It did very well his first 18 months or so in office but his needless trade war started the sell off, and his insistence on attacking the fed is a problem because it causes people to panic and sell. If he'd just shut up and let the market play out, things would b much better. The economy is still good, companies are making tons of money because of the tax breaks. eventually the deficits will be a huge problem but that will be someone else's mess to clean up, he's making it much harder now than it has to be.

 

[Russ Smith]

And here we go again another huge down day. Right now the DOW is at 24878, it closed 2017 and 24719 so we're within 200 points now of the DOW being down for 2018. There's lots of factors in play but it was really the stupid trade war that started this.