Friday, August 28, 2015 10:42pm
North Adams, MA now: 54 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
LOG IN | REGISTER NOW   

Home About Archives RSS Feed
@theMarket: Two Steps Forward, One Step Back
By Bill Schmick On: 04:00PM / Friday April 05, 2013

This week, for the first time all year the S&P 500 Index has sustained more than a 1 percent pullback. It needs to correct somewhat more, and despite the short term pain, this sell-off is a good thing.

Have you ever asked yourself why a tea kettle has a spout? It allows steam to escape so that the water within does not boil over. That's what periodic sell-offs accomplish in the stock market. Daily new highs, weeks of successive gains, chasing stocks — all of those indicators were out there. As I have written over the last month, it was just a matter of time before market discipline exerted itself. I'm hoping the decline will continue for a few more days and purge some of the excess exuberance out of the markets. So why not sell now and try to catch the bottom later?

If you can do that successfully, you're a better man than I, Gunga Din. But in the past, readers may recall, I have done just that. I have successfully told readers when to sell and when to buy back in 2007, 2008, 2010, 2011 and 2012, so why not now? The difference this time is the extent of the decline I am looking for.

In the past, each of my sell recommendations encompassed a correction in stocks of at least 10 percent. This time I don't see that. We may experience a decline that approaches the 10 percent level but, in my opinion, a decline of that magnitude is not warranted.

You see, unlike the last few years, I don't see the kind of market risk that precipitated big declines. The EU, Greece, Washington, U.S. debt downgrades, as well as fiscal and monetary uncertainty has been replaced with what — Cypress? Bumpy unemployment numbers? North Korea sabre rattling?

None of the above has the power to crater this market. The present concern over the last few weeks' jobs numbers should be put in context. Remember that a lot of construction jobs were created by Super Storm Sandy, however, those repairs are winding down. At the same time we are starting to feel some of the ill-advised (in my opinion) sequester cuts starting to show up in the data.

Clearly those cuts will do little good for the economy but they won't sink it. As long as the Fed keeps pumping dollars ad infinitum into this economy we are all sitting pretty. On the plus side, the recent decision by the Japanese monetary authorities to follow our central bank's lead and stimulate their economy to the tune of 7.5 trillion yen is truly unprecedented.

I was talking to a 30-year veteran of Japanese investing, Michael Longthorne, a managing director of Mizuho Securities, who described the move as "strapping a rocket onto a go cart." We concluded that after over 20 years of economic stagnation, there is the potential that the world's third largest economy (after the U.S. and China) could become a real factor once again in global economic growth in the years to come.

Bottom line, markets will use just about anything as an excuse when a pullback is overdue. My advice is to ignore the jibber jabber, ignore your short-term paper losses and look forward to a good year of double digit gains in your investment accounts.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.



0 Comments
     
News Headlines
Adams & Cheshire School Bus Route 2015
Williams College Class of 2019 Set to Arrive Aug. 31
YMCA Accepting Registration for Elementary School-Age Programs
'Mile in Her Shoes Art Show' Seeks Participating Artists
Berkshire Bank Names MacDonald SVP Corporate Auto Sales Leader
Cultural Pittsfield This Week: Aug. 28-Sept. 3
Berkshire Opera Festival Appoints First Director of Development
Adams-Cheshire Makes High School Pitch to Lanesborough
Opened or Closed? Debate Over Kirvin Park's Gate Grows
North Adams Neighborhood Opposed to Bike Path Plan

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (177)
Independent Investor (241)
Archives:
August 2015 (5)
August 2014 (2)
July 2015 (6)
June 2015 (8)
May 2015 (6)
April 2015 (8)
March 2015 (6)
February 2015 (7)
January 2015 (9)
December 2014 (7)
November 2014 (4)
October 2014 (9)
September 2014 (5)
Tags:
Stimulus Stocks Stock Market Metals Taxes Crisis Greece Energy Debt Ceiling Oil Japan Selloff Debt Banks Europe Commodities Retirement Bailout Federal Reserve Deficit Interest Rates Rally Election Congress Housing Europe Economy Jobs Recession Fiscal Cliff Pullback Euro Fed Currency Markets
Popular Entries:
The Independent Investor: Don't Fight the Fed
The Independent Investor: Understanding the Foreclosure Scandal
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
The Independent Investor: How Will Wall Street II Play on Main Street?
Recent Entries:
@theMarket: Markets Are Supposed to Pullback
The Independent Investor: Not All Bonds Are the Same
The Independent Investor: The Risk of Rising Rates
The Independent Investor: Boomers' Kids Don't Want Your Stuff
@theMarket: Month-End Musings
The Independent Investor: Supermarkets Evolve to Survive
The Independent Investor: Are You Ready for El Niņo
@theMarket: O Ye of Little Faith
The Independent Investor: When 'No' Means 'Yes'
@theMarket: Global Markets Weather a Wild Week


Live on the Lake: Madison...
Madison Avenue wrapped up the 2015 Live on the Lake concert...
Whitman's Wins Torchia League...
The Pat Torchia Women's Softball League playoffs concluded...
Berkshires Craft Beer Fest...
The 9th annual Western Mass beer festival drew hundreds of...
Pat Torchia Women's Softball...
Whitman's took the first game in the best two out of three...
Third Thursday August 2015
It was another beautiful night for 3rd Thursday on North...
Berkshire Chamber @ Darrow...
The Berkshire Chamber of Commerce held its monthly...
Shire City Sessions August...
Wild Adriatic performs at Monday's Shire City Sessions, a...
BYP Networking @WTF
The Berkshire Young Professionals held its networking event...
Softball: VFW Post vs Pizza...
VFW Post vs Pizza House at DiSanti field on Monday night.
Second Cheshire Block Party
Cheshire resident enjoyed good food and music by the...
Downtown Celebration 2015
The annual Downtown Celebration brought hundreds to Main...
Pittsfield Ethnic Fair
Pittsfield Ethnic Fair was held at the Pittsfield Common on...
Annual Cruz Nite And...
Cheshire residents enjoyed classic cars, good food, a BMX...
Adams National Night Out 2015
Adams recognized its first responders on Tuesday night...
National Night Out 2015
Neighborhoods in North Adams marked the annual National...
Adams Aggie Demo Derby 2015
Crash! Boom! Bang! The annual Aggie Fair demolition derby...
Live on the Lake: Madison...
Madison Avenue wrapped up the 2015 Live on the Lake concert...
Whitman's Wins Torchia League...
The Pat Torchia Women's Softball League playoffs concluded...
Berkshires Craft Beer Fest...
The 9th annual Western Mass beer festival drew hundreds of...
Pat Torchia Women's Softball...
Whitman's took the first game in the best two out of three...
Third Thursday August 2015
It was another beautiful night for 3rd Thursday on North...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings |
Advertise | Recommend This Page | Help Contact Us
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2012 Boxcar Media LLC - All rights reserved

Privacy Policy| User Agreement