The weekend is finally here and I’m quite surprised I made it.  Between health issues (miserable and ongoing) and projects at work piling up, it’s been a rough one.  However, it’s Friday and it’s time to kick back and enjoy at least a few deep breaths before Mr. Responsibility starts eyeballing me again.

Politics.

Yup, it’s that time again – the presidential debates are here and as ridiculous as my more level-headed wife thinks I am, I love the debates.  Sure, it’s all just rehearsed talking points and obnoxious levels of pandering, but I enjoy political maneuvering. To me, it’s a fascinating study of human interaction and manipulation.  FiveThirtyEight has a nice view of how well each candidate fared in the firs round of debates:

The First Democratic Debate In Five Charts https://t.co/Xdr2ZWBH3S

— ryan 🦏 (@ryanmathews) June 29, 2019

As a registered Democrat, but one who tries to think rationally and not vote blindly along party lines, I’m desperate for the Dems to put forward someone who is worth a shit.  In an ideal world, it’s someone who genuinely wants to work with Republicans and refuses to go down the rat-hole of name-calling and division. Yeah, probably too late and too dreamy… I get it.

The debates didn’t tell me much and I have no idea who I’m voting for.  Initial thoughts:

• I enjoy Pete’s intelligence and calmness.
• Biden waited too long to run and I still think he’ll self destruct himself out of the nomination.
• Harris is always very scripted and prepared… nice contrast to the disappointment in office today.
• Warren is smart as hell, but a little awkward on stage. It’ll take some a while to get used to her delivery, but she’s moving up quickly in the polls.  Her far left views will attract young voters, but she’ll have to find a way to pull older voters and black voters away from Biden.
• Bernie has big dreams and is frustrated.  His inability to solidify support over the age of 40 will do him in.
• I like Castro, but he’s not assertive enough, thus not front of mind.
• Booker keeps getting lost in the shuffle.
• And then everyone else.

I’m still predicting a Biden/Harris ticket, but Warren would help him attract some of the more progressive base.  If Biden pulls a Biden, you may see a Warren/??? ticket.  Maybe a Warren/Harris ticket.. that’s interesting.

The top is in.

I swear I hear ‘the top is in’ at least a dozen times a week.  How can this market keep going up?  What is this nonsense ? Let’s keep it simple – predicting tops and bottoms is a waste of time.  The only thing you can do as an investor/trader is protect yourself and ride the waves.  Get on the wave, but plan how you’re going to jump off so it doesn’t slam you to the bottom of the ocean floor.

Happy thoughts:

• Unemployment is very low
• Initial claims for unemployment insurance is crazy low.
• Lots of job openings out there – if you want a job, you can almost certainly get one.
• Consumer confidence is high
• no obvious signs of a recession in next ~6 months.

But wait:

• The yield curve is inverted (10s and 3s)
• stock valuations are high.  Overly high valuations usually roll over quickly and the market gets smashed.
• Straits of Hormuz and trade – basically, foreign policy is a big unknown with this administration.

The generally accepted theory is that we’re ok, right?  It feels like an extended business cycle, but there is no hard evidence that the market is rolling over.  So, LONG AND STRONG.  Although I’m still long and weighted fairly heavily in stocks, the short term bull party has become more difficult over the last few weeks.  If I struggle to find strong trends that make sense to me and my win rate is flattening , it’s time to be more cautious in the short term.  Lower the beta and raise the stops.

Have a nice weekend.