Home Forums Hunting & Shooting Hunter's Campfire Don't look now but stock market is booming

I'm getting ready to buy in March. Unless something BIG happens, like Trump out of office, I'm guessing things will be at their lowest by then, and it will recover enough to make me a good lick. My crystal ball is working again. I found some salvage parts.

Hookem, my wife has been a school food service manager for 20 years. She told me, during the Moochelle era that she could no longer prepare the food the children were used to in Oklahoma, and the food they and the parents preferred. The kids were forced to take Moochelle's new "healthy food" and that they just walked over to the trash can and emptied their trays, without touching a bite.

Tyrone, the insurance companies, by law, are required to hold cash reserves to pay for these catastrophic claims.

Not a bad day today!

While the Fed is in theory "independent", they reside deep within the swamp of D.C.. Their disdain for POTUS is showing by raising rates during an economic boom - with crocodile tears about an over-active economy. They are out to kill the Trump economic boom. All the while other swampers in the business media circles are warning about a "recession" in 2019. This same body of swamp dwellers kept interest rates near zero for years - to protect ZERO and his bullcrap legacy. The Fed needs an investigation and Powell is needed as an accountant at Wally World. Larry Kudlow should be the new Federal Reserve Chair.
The FED is an independent as Peelosi and Schmucher are!

The FED was originally started and put in place to oversee that banking had the necessary funds to remain solvent on their lend/deposits ratio. Like most all other controlling entities out there it’s taken on a life of its own.

Interesting question... When he is publically calling out the Fed and asking them to NOT raise rates because they are going to kill the economy, and inflation is not in problem territory, but they raise rates anyway.... should he get the blame? With the media doing everything they can to set Trump back, causing uncertainty in people, do you not think this has an effect?

I think it is foolish to point a finger at any one thing over a long term. When Trump got elected the market went on a run, so that was an obvious factor. He managed the economy to an higher level of performance than the democrats though possible. There are a lot of factors that can affect an economy and a market. It takes a big picture view and there is still a lot of guess work.

Today was a good day to be an investor....

‘Twas so.

I believe I posted "Im buying" last week,,, and I did,,,,

Lap dances ?
Grins

If they are big enough of an investment/return

Only idiots fail to realize that the market drop is a Propaganda Corps driven event manipulated by George Soros.






No, it's not an unknown question. The last president that decided to go against the FED was made an example of on November 22, 1963. No one has seriously fuct with them since.

Why the Stock Market Likes Trump - The Power Of Deregulation
Jan. 8, 2017 7:47 AM ET

Rida Morwa
High Dividend Opportunities

Summary
1. U.S. equities have been soaring for many reasons, including expectations of reduced regulations by the Trump Administration.
2. Mr. Trump is appointing a virtually unprecedented number of businessmen to high positions where they will be able to temper the enthusiasm of regulators.
3. The United States is about to have the most "business friendly" administration in the developed, if not the whole world.
4. Quite suddenly, owning a part of a business operating in the U.S. has become more attractive because of the likelihood of a more business friendly regulatory and tax environment.
5. The power of deregulation should not be under-estimated, and it can have an enormous impact on the U.S. economy.

Below is a general report whereby HDO co-Author Phil Mause and I explain our views on the "power of deregulation", and why we remain optimistic for the year 2017.
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Depending upon the index used as a metric, the stock market is up nearly 10% since Donald Trump's election less than 2 months ago. This would equate to a gain rate of 60% per year and so it is remarkable given that, on the night of the election, as the returns started to look good for Trump, the futures market seemed to panic at the prospect of his election. The dollar also seems to be strengthening which would normally undermine the stock market because a stronger dollar makes it harder for large international companies to produce gains in dollar denominated earnings. Why is the market moving up and, more importantly, where will it go when Trump takes office? This article will try to analyze the impact of Trump's election on equity valuations.

The article is agnostic on the public policy merits of the regulatory issues discussed but focuses only on what anticipated changes in regulatory policy will mean for equity investors.

The Nasty Realities of Investing - There is an expression in constitutional law - "the power to tax is the power to destroy" - which suggests that investors are at the mercy of the government. High enough tax rates will destroy the ability of virtually any investment to generate after tax cash flow. New Jersey homeowners are painfully aware of the impact of ultra-high property taxes on real estate values and it is not hard how virtually any investment could be rendered valueless by taxation.

A companion quote - "the power to regulate is the power to destroy" - would be equally true. Onerous enough regulation can easily put a business out of action. It is, of course, true that a certain amount of business regulation is absolutely necessary. In the areas of worker safety, environmental protection, and consumer protection it is essential that the government correct certain "market failures" and intervene. However, there is a tendency for regulation to become overly restrictive as regulators focus on a single objective and fail to balance it against other legitimate interests. It may well be that the "sweet spot" of optimal regulatory balance can be reached only after a sequential political debate between administrations imposing excessive regulation followed by an aggressive roll back.

Co-Author Philip Mause shares with us: "I spent part of my career in the world of electric utility regulation and I saw investor owned utilities cower at the power of state regulators to set rates and federal regulators to license nuclear power plants. In one situation, an electric utility was whipsawed into bankruptcy by the refusal of one regulatory agency to license a completed nuclear power plant combined with the refusal of another regulatory agency to allow the utility to recover the costs of building the plant."

Regardless of one's view of the merits of business regulation, in certain cases the economic impact of regulation on equity value is hard to deny. New Yorkers are very familiar with the impact of rent control on building valuations. The biotech space is constantly alive with "event driven" speculation on potential decisions by the FDA. The drug companies will prosper or shrivel up and die based on decisions concerning Medicare reimbursement. An oil & gas Midstream MLP is undermined by being told that a 91% complete pipeline can't be finished until a new environmental impact statement is prepared. And the list goes on and on and on.

The Real Class Divide - Class divisions in the United States are often described as being based on income but a more fundamental dividing line is the line between owners and everyone else. However, whether or not they are super-rich, owners of equities (shareholders) are on the "capitalist" side of the line - as are owners of income producing real estate, privately held businesses and farms. Because "the power to regulate is the power to destroy", these owners are at the mercy of government regulators whose decisions can undermine the value of their assets to the point of worthlessness. While countries like Venezuela and Cuba actually expropriate assets by simply taking them away without compensation, regulators in the United States can do the same thing by publishing notices in the Federal Register. Active investors who try to calculate valuations of equities become aware of this potential. Investors from around the world are constantly on the alert for "friendly" and "unfriendly" regulatory climates. Oil companies spend millions assessing the relative political risk of expropriation in various countries before committing capital. We can remember that - in the valuation of electric utilities - "regulatory environment" was a key metric.

Wealthy people are constantly faced with the dilemma of "where to put my money" so that it will be safe from rapacious tax collectors, greedy politicians, and overzealous regulators. One good example to look at is the United Kingdom which is a tax friendly country for certain ultra-rich people who can elect to pay a "flat-tax" on their non-UK income; this not only save the ultra-rich massive amounts of taxes, but also removes the burden of tax filing and worries about tax audits. London today has bigger collection of millionaires than any other city in the world, which has helped lift the U.K. economy.

The Class Divide is between those who have experienced or are threatened by this form of regulatory expropriation and those who are not. And the officials who usually design and enforce government regulation are almost universally in the latter category. In many cases, they may not even appreciate the impact of regulatory decisions of the viability of businesses. In other cases, they may not care or consider the fact relevant to their regulatory policy.

The Dilemma of Democracy - The dilemma of Western liberal capitalist democracy is the risk that 60% of the voters will elect politicians who take the wealth of the other 40% and distribute among their constituents. Of course, our constitution forbids the "taking" of property without just compensation. But - as noted above - the government doesn't have to expropriate property to destroy its value. It can take a variety of tax and regulatory actions which have the same result. Regardless of the public policy merits of the numerous regulations imposed on business - such as employee benefits, anti-pollution policies, and banking regulations; their impact upon equity valuation is often very obvious and very negative. It is very easy to back into creeping confiscation through the ever expanding reach of the regulatory Leviathan.

The United States - As great as this threat is here, it is generally much worse in other developed economies, such as France or Italy where we hear horror stories about the degree of regulation and a highly complex tax structure. This is prompting many of the young and ambitious youth to immigrate, and use their talents to start their businesses elsewhere.

On a relative basis, the United States is certainly not the "worst house on the block" although its rating in the Index of Economic Freedom could certainly be better. On the other hand, the Obama Administration had very few businessmen in its higher ranks and tales of onerous regulations were not unusual. The concern was compounded by an aggressive use of executive orders on a variety of issues. While it certainly can be argued that the policies of the Obama Administration helped pull us back from the abyss of a deflationary recession and thereby benefited American business substantially, the business community did not always see the Administration as a friend and perceptions are of critical importance.

Trump - The election of Trump is perceived as favorable to the ownership class for several reasons. Trump is a career businessman with an appreciation of the danger that regulation can undermine the value of businesses. He is appointing a virtually unprecedented number of businessmen to high positions where they will be able to temper the enthusiasm of regulators with an appreciation of the need to consider the impact on real world business operations. In this regard, Carl Icahn - an activist investor who is particularly sensitive to preserving and enhancing the value of corporate equity - is apparently charged with a kind of "Regulatory Czar" role and should be able to roll back onerous regulations in a variety of areas. It may not be an overstatement to assert that the United States is about to have the most "business friendly" administration in the developed, if not the whole, world.
Quite suddenly, owning a part of a business operating in the United States has become more attractive because of the perceived likelihood of a pervasively more business friendly regulatory and tax environment.

Perhaps as importantly, the way in which Trump was elected demonstrates that American voters do not vote by class and that less affluent voters do not seem to harbor ambitions to expropriate the assets of the ownership class. The "Democratic Dilemma" discussed above does not seem to exist in the United States or, at least, seems temporarily somnolent. Capital is relatively safe from creeping expropriation - at least for now.

This perception may affect foreign investors looking for "safe havens" as well as U.S. investors. This may explain the strengthening of the dollar and the appreciation of the stock market. If I were a wealthy investor in a troubled part of the world or an area bedeviled by policy uncertainty (e.g., China and Brexit), the United States could be seen as a very attractive destination for my assets.

Risks - Investors should not expect that the markets to keep going up at the rate of 5% a month; and it will not be a surprise if we see a period of consolidation or perhaps a small pull-back. A great deal will depend upon the tone set in the early days of the Administration. There is the ever-present danger that Trump could stumble into a market killing trade war. The Obamacare "repeal" could inject troubling uncertainty into what has become one of the largest sectors of the economy by making it unclear what it will be replaced with. And the general uncertainty concerning the direction of public policy under Trump creates a certain degree of risk for equities. But all of this must be put in context. On balance, it is reassuring that a group of seasoned businessmen with an appreciation of these dangers of excessive regulation will be huddling as these decisions are made. And investors from around the world may see these risks are preferable to what they face back at home.

Conclusion - The power of deregulation should not be under-estimated, and it can have an enormous impact on the U.S. economy. If implemented with an appreciation for the legitimate concerns which led regulation to be imposed tempered by an effort to minimize the impact on business to that which is truly necessary, it will make product and services cheaper, and more competitive (which will offset the effect of the rising U.S. dollar). It will also help attract new investments and foreign money, and stimulate economic growth. Deregulation is one of the main reasons why the markets have been soaring. The fact that U.S. small cap stocks (Russel 2000 companies) have been outperforming can also be explained by expected deregulation; most of small cap stocks represent smaller companies, most of which exclusively operate in the U.S.

The U.S. Economy is the only global economy which is currently seeing a solid outlook. We expect China's economic growth to continue to slowly decelerate, while Europe is struggling to keep its growth rate above zero.

The year 2017 is likely to be a solid year for U.S. equities. Investors are better off overweight U.S. equities and underweight Europe and Asia. We favor "pure" U.S. companies to global ones.

And that is why my Insurance company filed for bankruptcy 2 weeks ago. Merced Insurance.

Okie, the election of Trump was indeed good for the market and for the economy, and I've never said anything otherwise. BUT...he's no different from any other president that has served........if he's going to be given credit for the good, then he must also shoulder some responsibility for the bad. That's just how it works. I think that some of the uncertainty over some of Trump's policies have played a part in the market losing some ground as of late. The robust economy has kept it from losing even more, and he get's credit for that. He is almost into his third year now, which means that good or bad, he owns the economy and what happens.

The point of that article, penned shortly after Trump was elected, is to demonstrate that it is the policies of the administration that creates the business climate to boost and build a solid, long term economy, such as we enjoy now. The "deregulation" has been a huge benefit to business. The market does not effect the profit and cash flow of the business. The economy has never been strong in our lifetimes. That is all Trump. Earnings reports have been spectacular for the past two years and the end is not in sight. What the market does, in pricinging these companies, is not the fault of Trump. He has done his part.

The market goes up - the market goes down. Many analysts predict a downward trend for 2019, some predict a severe drop. We'll just have to wait and see.

I am invested in value/income securities/equities, so whether the market price goes up or down, my monthly/quarterly income remains steady.

Same here, Okie, only with the exceptions of holding several + stocks that I picked up during the panic selling of 2008-09 . Those are 3 baggers.