Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give." - William Arthur Ward, author of Fountains of Faith.
For regular readers, you know I write obsessively about the financial markets and investing. It probably has gotten boring reading about the same subject matter at the same time of the week, over and over again. I don’t emphasize enough why most people invest, which is to help fund the important things in life- kids future, education, housing, retirement, special events in ones life, or preparing for an emergency.
There are plenty of other reasons, of course, usually specific to an individuals circumstances. In any case, I should emphasize I am very thankful for my clients. They have been quite patient and incredibly supportive in my efforts to invest their capital. Managing money for others is a privilege and gratifying when you can help others fund their life goals and activities. This is one major reason I enjoy investing, and I don’t say it often or emphasize it enough.
In the financial markets this week, there were opposite cross currents at work which had a dramatic impact on the ultimate outcome. Let’s start with the positive, which would be corporate earnings. Other than the joy which remains specialty retail, solid reports from the likes of Wal-Mart (NYSE:WMT), John Deere, Alibaba (NYSE:BABA), and even a better than expected result from Target Corporation (NYSE:TGT) helped investors endure the other dominant theme. What could have that been? The joy of politics, both domestically and across the globe. The daily drumbeat of partisanship, White House drama, and bureaucratic grandstanding put investors on edge.
Down south, when the news broke of a potential bribery case against the pro market President in Brazil, it only deepened the skepticism about the stability of a market which has had a huge run. If one looks overseas, the relative calm and saneness of the recent French Presidential election (consider that oxymoron) seems downright attractive. Low and behold, investors are embracing the newfound attractiveness on the old continent as European indexes seem worthy of capital.
Next week, OPEC meets to discuss the much needed extension of production limits as a way to bolster oil prices. The Saudis and Russians have already agreed such a move is in order, and this week we will find out if it might be even more than originally surmised. Our hard working shale entities just keep on pumping and starting up more rigs, and with oil prices well over break even costs, there is no letup for our friends in the middle east. Hard to feel sorry for the upstanding group at OPEC, though, so you won’t find any sympathy here.
Last, I should mention the price of Bitcoin, which settled Friday at a cool $2019.11. If ever there was an asset which represents the modern day investment psychology, the big B would be it. With the world pretty much in agreement that Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), and Tesla (NASDAQ:TSLA) are the kings of the universe for the next century, the price of Bitcoin is just consistent with digital dominance, at least currently. Whether it will last remains to be seen. Time will tell.
Disclaimer: Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charter holder.