WASHINGTON, October 12, 2016 – Pre-November action on Wall Street has slowly been transformed into a muddled, illogical, indecipherable morass of rumor, falsehood and nonsense, similar to the Election 2016 campaign.
Like the utterly discredited “news” media — currently working overtime creating hundreds of anti-Trump lies to discourage the Deplorables while simultaneously ignoring the destructive wakes of Hurricane Matthew and Hillary Clinton’s damning email trail — the financial media is likewise pulling its daily litany of unfounded opinions out of a place where the sun never shines. In point of fact, they don’t know what they’re talking about.
Maybe the Freemasons and the Illuminati really are running the show today, both politically and investment-wise, just as the conspiracy theorists and freakazoids have been predicting.
In the meantime, we peons outside the Beltway—including the Maven, who lives about 5 miles outside the Beltway—are forced to take daily actions in our lives as well as our investments based on our best guess, since all the generally accepted sources seem to be lying all the time. The ghosts of Washington, Jefferson, Madison and Adams are probably searching for another planet as this short piece is being typed. What a sorry disaster.
This is the Maven’s “O tempora, O mores!” way of saying that he, too, doesn’t have a clue what’s going on, and this will probably continue until the morning after the First Tuesday in November when the market will overreact to what happened the previous evening—if indeed the game is actually over at that point. Hold on to your seats and start hedging your stock bets or raising cash. Whoever wins this one will almost certainly be declared a cheater by the other side, particularly if things are close. You think Bush vs. Gore was bad…
Regarding today, the Fed released its September minutes this afternoon, which provided us with the quaint notion that any further delays in the Fed’s next interest rate increase could cause the next recession—as if this current and allegedly ongoing recovery hasn’t actually been an extension of the Great Recession for lo these many years. (There certainly hasn’t been any real growth over that time.)
We’ll have more to say about this in a later column. Meanwhile, oil is slightly off for the second day in a row after earlier healthy price increases. We shall see if the more or less $50 bbl. handle has lasting power or marks the beginning of another precipitous decline.
As of 3:40 p.m. EDT, stocks are slightly up and will close either slightly up or essentially flat unless we get some monetary October Surprise in the next 15 minutes or so. It’s boring and perturbing, but it’s what we have.
Haven’t been doing much, raising cash but then spending at least a bit of it on opportunities, which have been few since so many issues are overpriced.
We’ve acquired small positions in two major U.S. oil refiners, Valero (symbol: VLO) and Marathon Petroleum (MPC). They’re currently wobbly to flat, but we bought these “beginner” positions precisely because oil seems to be at the same trading point it hit the last time before the HFT supercomputers hit the “sell” button to ride it back down again before starting the same trip again. This time, should this occur once again, we’ll average down as the HFTs have their fun.
As expected our brilliant but as yet not taken 180 percent profit on new tech cloud IPO Nutanix (NTNX) has gradually eroded as those lucky rich guys who got plenty of it continue to take their profits—irritating, though normal and customary and certainly logical. Little guys like the Maven who got lucky and landed some shares are still up around 100 percent at this point. But, given that our brokerage coerces us into holding these IPO shares for 31 days, we have two weeks to go before we find out whether we have anything left of that 180 percent initial paper profit.
After passing on the next IPO (which opened essentially flat), we managed to nab some IPO shares of Extraction Oil & Gas (XOG), a driller and service company with a nice chunk of oil- and gas-rich acreage in Colorado fracking country. This in itself makes the investment risky.
Colorado, like Nevada and other thinly populated Western states has been slowly taken over by California expats who flee that state’s ghastly taxation and over-regulation regimes for friendlier Red States, which they then promptly and cluelessly turn blue so the whole destructive routine happens again. No hugging. No learning. (Texas is next on their list.) Meanwhile, who knows when these clowns will try to shut XOG’s promising Colorado activities down, because, Gaia.
XOG priced slightly up from its expected range at $19, and then popped a bit after its late morning opening trade. It’s currently trading around $22 a share and selling off fairly sharply, putting us 15 percent ahead for the moment. We’ll just have to see how things go over the next 30 days on this one, particularly if oil prices head back down again.
That’s about it for today. We’ll continue to hunt for signs of intelligent life in this universe. But don’t hold your breath.