WASHINGTON, September 26, 2016 – Every trading day, hundreds, perhaps thousands of pundits, analysts, bloggers, reporters and other financial blatherers including the Maven, are more or less required to opine on what’s moving markets up and down on any given day. Such commentary has become more frazzled than usual in recent years due to the sheer uncertainty of market direction, courtesy of direct central bank manipulation of stocks, bonds, commodities and anything else you can trade. It’s all for our own good, of course.
Such blatant and obvious manipulation makes it easier for those doing the manipulation to make money than for the rubes out here trying to read the manipulated tea leaves and coming up empty more often than not. Those doing the manipulating and those who regularly profit from it like it that way.
That’s why, seemingly against their own political and capitalist instincts, they provide the bulk of support for left-wing Democrat candidates including the incumbent president, and now his anointed successor, Hillary Clinton. While their campaign donations go to support way-out-of-the-mainstream candidates like this, they know that—courtesy of their own big donations—they’ll always be cleverly exempted from the various taxes and punishments dealt out by such office holders. Otherwise: no campaign funds next time.
It’s not surprising, then, that before and after Monday’s latest market plunge, the blathering class is laying the blame at Donald Trump’s front door. The reason? The Donald owes the 0.1 percenters absolutely nothing. They and a legion of journalists—Democrat operatives with bylines, Instapundit’s Glenn Reynolds calls them—are now bemoaning Trump’s surge in the latest polling, particularly in the so-called “battleground states.”
In turn, they’re blaming this nervous and unexpected turnabout in the polls for current market jitters, as if to say, “OMG, The Deplorables might actually elect as president someone we don’t own and can’t control!” The horror! The horror!
Anyhow, that’s supposedly the reason for Monday’s latest down day for stocks. The Fed’s now highly likely interest rate jump in December isn’t helping, of course. Just as insurance companies hate to sell a life insurance policy to someone with some kind of health issue doctors can’t quite puzzle out, so, too, are investors nervous about putting more money into a market that seems to be getting out of control, slipping away now even from the Master Manipulators on Wall Street and in London, Zurich and elsewhere.
We’d planned to skip tonight’s first 2016 Trump vs. Hillary debate, simply because these phony-baloney point counterpoints—they’re not really debates—are as rigged against Republican candidates as markets are against the small trader. But given the rising stakes in this election, and given the increasing nervousness in the financial sector, now that The Boyz seem to be losing control of perceptions and perhaps results, tonight’s thrilling Campaign 2016 episode will be construed as Having Great Meaning, whether it does or not.
We’d even be (almost) willing to be that stocks tank Tuesday morning if Trump even approaches a TKO. Contrariwise, if Hillary can stave off a coughing fit for 90 minutes, stocks could party hearty at Tuesday’s opening bell as media hacks and pundits alike unanimously declare Her Hillariness the victor no matter how this evening’s festivities actually turn out. That’s something you can take to the bank.
Or not. Anyone who claims to know what’s going on these days is either full of it or peddling a pack of lies, so we’ll bow out of both debate and market predictions today. Odds are in favor of any media pronouncement being not only wrong but spectacularly wrong. We’re actually trying to help small investors by writing this column so we’ll avoid the hubris trap. If we actually knew the answers, we’d gladly tell you, but we don’t. So we won’t.
So let’s call for pizza this evening, grab a brewski, adjust our easy chairs, turn on the flat screen TV (preferably to Fox, or, better yet, C-Span), sit back, relax, keep a bottle of tranquiilzers at the ready and see what happens next.
We made a few moves today, trying to re-orient our very-interest-and-dividend-heavy portfolio in the direction of slightly more diversification. Having already collected a nice September dividend, we’ve been reducing our good-sized position in Ares (symbol: ARCC) and dumped the rest of it this afternoon.
We’d sold shares of this business development company (BDC) here and there earlier this month at a higher price, hoping the stock would stabilize, but it has not, slowly sinking back toward $15 per share. So it was time to take the rest of our profits and get out, perhaps to buy it back at a lower price another day.
On the other hand, unable to quite catch the bottom in Apple’s latest swing move, we bought a modest number of shares today at a fairly good price, and might buy more if it goes lower. We think the negatives here are being blown way out of proportion, and the stock is a great value at current prices. On the other hand, when The Boyz decide to administer another heavy beating to Apple (AAPL), there will be nothing we can do except buy a few more shares at the next bottom when they’re done.
But for Apple and pretty much all consumer tech and game companies, the third and fourth quarters are still usually their best, so why not take our chances on getting a nice ride through Christmas week before we get back out again?
We also added a small position in another property REIT, this one being Ashford Hospitality (AHT). The company has been pressured for its management style and structure by outside investors lately. But we’ve made good money on a recently called AHT preferred stock and are now aboard another one (AHT/PRA) that’s paying out 7 percent—similar to what you can get with the common. So this might be a good one to ride, along with UMN Properties (UMH), which we picked up last week.
A good REIT ETF is also probably in order. We currently use Schwab’s SCHH. With REITs now becoming their own sector in S&P indexes, we think the action could be good for at least the next month or two as mutual funds and ETFs re-juggle their numbers in order to take these shares on board, driving share prices up. We think.
That’s about it. We’ll decide tonight after a few draft beers or tomorrow morning after three or four pots of coffee what if any influence the upcoming debate will have on traders’ nerves and adjust our own activities accordingly.
*Cartoon by Branco. Reposted here with permission and by arrangement with LegalInsurrection.