We are in the final quarter of the year and moving into the third quarter earnings reports.
Some of the larger capitalized companies will report this week.
It is unusual for markets to be starved for information, but the government shutdown is limiting various monthly reports on the economy.
The Fed is off line for a month and, for once, the constant flow of data is limited.
Maybe that is a good thing.
It has been the belief that you can’t have too much data. I’m not so sure about that, but we will see what less brings.
It is hard for me to make a cogent comment on the government shutdown, as I am not impacted.
I am no fan of much of anything that the government tries to accomplish as the entity is inefficient.
While we need government in some form, I’m not sure we have figured out the right level.
No matter the debate, there will be a significant portion of our populace that will be impacted, indicating the vast reach of our government.
During all this current run up in the equities market, we have seen
a record high price for gold.
Some would say it is a hedge against an economic downturn.
To some degree it is, but what it really reflects is the loss of faith in the U.S. dollar.
More and more countries are lowering their portfolio positions in the dollar and transferring that into gold.
It is impacted by speculators, but the loss of faith in the U.S. is real.
While we spend time discussing social issues, we keep kicking the can down the road about our rising national debt.
It happens, as the answers would end up negatively impacting so many people and that is not a ticket to getting elected.
My concern is that politicians only get motivated when forced to and that translates into an economic and financial crisis.
That is not to say that this market will topple anytime soon.
I will admit to being at this investment business for so long that I lived through the 1987 market crash where the Dow dropped over 500 points.
Seems like a ridiculously low number, but back then it was a drop of over 20% on Oct. 19.
The one great thing I learned from that crash was the ability of the markets to recover and to do it quickly.
We made up the loss by the end of the year.
The real problem was that so many dropped out of investing in the market.
The same thing happened in 2000 and 2008.
It is really difficult to come back from big losses.
As negative as I can be about markets trading at this level, experience has taught me to go back and make comparisons.
There was much the same talk about the fact that the internet was free and no one was making a profit.
Well, people like Bezos and Zuckerberg figured out how to monetize.
That is where we are today.
The promise of AI is significant, but it is taking such enormous amounts of capital to get those goals accomplished.
Any shortfall in future earnings will be met with little or no sympathy.
That is not reason to abandon the market but one must be realistic.
That is why you see defensive stocks gaining ground.
Just like you are witnessing the rise in precious metals and crypto.
Investors are hedging their bets. The rise in gold is a hedge against the money bet on the market.
The dollar used to be that vehicle.
This is why investing is so fascinating, at it requires one to look at the whole picture.
