So I’m reading this morning that Snapchat, after yesterday’s booming IPO, is larger financially than American Airlines, CBS, and host of other established businesses. This is the moment when clients call me and tell me that they want to go all-in on the stock market. They may be right. But according to this chart, we are in a bigger bubble than 2000. And that ended so well….not.
…Is that it’s a paper cut. Most days the market has barely declined at all. We don’t know what will happen. So far, not much.
To prevent becoming too concerned about day-to-day price volatility, check out this ultra-long stock market chart here.
Fascinating! Investing works. Stay the course…even if it gets a bit bumpy.
Here’s today’s thought to ponder. Stocks appear very overvalued. In classic financial markets, this matters.In today’s markets, this may not matter. In our brave new world, the support of central banks tends to distort valuations as indicators. However, there’s no harm in being cautious. Read the article here.
I’m guessing this is a good time to plan a visit to England. Today’s frenzy over the British pound is a good thing for British exporters too. It also illustrates why we tend to avoid ETF’s: too many technology-driven flash crashes.At some point soon I expect to go bargain hunting. Read more about why you should plan a trip to London here.
We have largely exited our energy holdings. Most of these were profitable. We have cut our gold exposure in half after a very successful run. Our overall holdings in technology and health care remain in place. Now we are newly invested in bank stocks, both foreign and domestic. The challenge of financial stocks currently is that they are a very uncertain and high-risk position, dependent upon both interest rates rising and economies not stalling. We can’t really guess what will happen. For example European bank stocks…of which we own a dollop…were hammered today with bad Euro-economic news (Is there any other kind?) I’m thinking that patience and humility may help us produce outsized gains in this unloved, ignored sector. Meanwhile billionaire bond trader Jeff Gundlach says sell everything, even the kids. I’m inclined to keep the kids. Stay patient.
I’m rejoicing at the recent all time highs in the stock markets. The money gained is real. But I’m also cautious. Let’s stay diversified and careful. We don’t really know what will happen. We need to be emotionally prepared for a downturn, even if it’s slight. Remember, for us, downturns are when investments go on sale. In my professional life, every decline in the stock markets has been a opportunity to create greater long term gains.