Living it up while locking it down
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| Sell, by Jack Vaughan, circa 1977 |
Most of the successful people I've known are the ones who do more listening than talking.” ... Bernard Baruch
It’s been a week since reports on Saturday Nov 7 fairly vividly concluded Biden pretty clearly won the election. But Trump has not stopped his machinations to overthrow the result. The stock market says la-di-da. It’s good to be king.
That is: enthusiasm wins over all. The Pfizer COVID-19 vaccine gets a great report, the market, so the
pundits say, sees an end in the future to lockdowns, and it batters the darling
stay at home tech giants and rotates toward value stocks. But as WSJ’s James
Mackintosh says, it could be “just another false dawn” as the value rotation
has been expected for years. After Monday’s vaccination shot, the tech rich
Nasdaq rebounded.
In Up and Down Wall Street in Barrons, Randall W Forsyth
discusses the effect the vaccine news had on “leveraged players.” They pursue
long/short strategies, 1-buying indexes based on baskets of stocks with positive
price momentum (FAANGs) and 2-selling stocks with negative momentum (Value
stocks). I keep hearing about ‘momentum plays’ which maybe the previous describes. “There was a violent
shift in winners and loser on Monday,” Randy writes in his “Up and down funky Wall
St” column.
He quotes a semi-retiring fundamentals luminary, Louise
Yamada, on the Monday doings: “The last person who wanted to buy got in.”
Caution is due, Yamada opines.
There has also been “a stampede into global equity funds,” per
Randy. I wonder how long that will last…. Herr Trump took the opportunity
Friday to outlaw ownership of Chinese stocks. Many miles before that would come
to fruition …
By the end of the week the Monday Vaccination Blush was off the rose. Thursday the indexes were each down about 1% and COVID-19 was rampant.
For the week, the Dow was up 4.08%, the S&P added 2.16%
(hitting a record), the Nasdaq fell 0.55% and the Russell 2000 rose 6.08%. (Those together average +3.2%)The
dollar was a bit down. Gold rose $65.
Erik Shatzker’s Front Row featured Glenn August of Oak Hill
Advisors, a speculator in distressed properties who says people have to do
something with money, and it may not be the stock market. He looks for good firms
that are in trouble, with good capital structure, strong competitive position
and opportunity for growth. He makes $500 million dollar (and probably more) bets
on such for his clients and his company. - Baruch Bernard
Value Shares Receive Shot in the Arm – WSJ (nyuck, nyuck, nyuck)
Up and down Wall Street – I - Barrons Nov 16, 2020
Up and down Wall Street – II - Barrons
August occasion.
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