1st half 19 thread

Yeah.....Tuesday was a bummer. I like Trump but I don't understand why he thinks tarrifs on China are a good thing for us here in the USA. The end result of tarrifs are higher consumer prices and thus, higher inflation. The US consumer ends up paying the tax in the form of higher prices and businesses pay the price in the form of shrinking margins. Let's hope this trade deal gets resolved soon.

After decades of investing, I get numb to these days of downward volatility. They are inevitable and will happen more and more often with computers having taken over a huge % of the trading activity. Last November was pretty brutal.....losing 28K in one day and another 20K the next will test the soul of any buy and hold investor.....but after surviving 2008-2009 I have learned that patience wins in the end. 

Buck....check out CVS for a long term hold. Somehow it avoided the meltdown this week and held strong. If they make it though this next earnings cycle without a surprise, there will be no way to go but up from here. The stock is CHEAP, CHEAP, CHEAP with a forward p/e of 8. CVS could return 20-40% over the next 12 months with a small drawdown risk. 

This is my favorite play right now with markets near all time highs. The probability that CVS will outperform the overall market is extremely high. 

Markets getting wrecked all week long and my positions are down 35K yet CVS is still holding above my $54 purchase price. Buck...surely you find this interesting, no? This confirms my thoughts on CVS last week. Markets are down roughly 4% and CVS hasn't dropped. 

This is not obviously the way I wanted CVS to outperform the markets, but it does give a strong indication that CVS has bottomed out and set for a strong recovery. The 3.75% dividend is really the cherry on top!

Trump may not fully understand that tariffs are INFLATIONARY and result directly in higher consumer prices. This forces consumers to purchase less of the goods that have tariffs imposed on them or fewer of some other product. In the end, a tariff indirectly lowers the ability of the consumer to spend via inflation.

Regardless of whether Trump understands, the MARKETS definitely understand that tariffs are an indirect tax on the consumer. Yes, tariffs puts more money in the hands of the GOVERNMENT, but we all have seen that the government does not spend money as wisely than the consumer sector. 

Our markets potentially have a lot of unwinding to do if this trade deal ends up in a full blown trade war. One could argue that a tariff results in the same effect as a drop in GNP and consumer income. Consider me concerned that Trump thinks he can outsmart the laws of economics. 

INTEL exports 25% of their chips to China. The damage is/would not be limited to just Apple. CAT is another that will suffer. The bottom line is that tariffs put more money in the governments hands and less money in the hands of consumers. That is indisputable. 

I do appreciate your take on this, but I don't believe lowering exposure to Chinese products by 50% is possible. I do believe that Trump is measuring his "Presidential Success" partly on how the markets are performing. So he may be more motivated than you think on making this deal happen. A full blown trade war has the potential to unwind this market back to 52 week lows or even lower. 

I'm sure Buck will offer his thought on this subject as it will be the primary factor short term factor in the markets and thus his put/call strategy. 

Sorry to hear the news Buck....condolences for your family. 

This is absolutely the strangest market. With the markets opening the week with the VIX over 21, I was braced for another down week expecting this downdraft to continue for a while longer. I suppose this is why the best strategy for me is to buy and hold as timing the markets is just too difficult. If you were buying calls on Monday you are a special breed of stock market guru.

Instead the VIX is bottoming out below 15 and suddenly everything is turning up roses????

It seems too easy.

I'm not totally convinced....