"Is it time to take some profits and enjoy summer?" by: John Sample

   Last week caused a friend of mine to remind me of the old maxim to “sell in May and go away” as the Dow dropped over 100 points each on Wednesday and Thursday. 
   I called him back Friday with the Dow recovering most of the losses. He called me back on Monday with the President indicating the need to raise tariffs on Chinese trade to 25%. 
   This sent the Dow down at the open by over 400 points, which was temporary, as the Dow closed down under 100 points. 
   I don’t think that May has anything to do with the market but the fact that traders are nervous about the fact that we are back near record-high levels.
   What I think is that Trump was emboldened by last week’s economic news of 50-year-low unemployment levels and jobs created at over 200,000. 
   This will push China to negotiate. I believe these negotiations will extend into next year as the tariffs will not impact the economy as much many have suggested. 
     Never forget that tariffs collect taxes, offsetting the deficit. 
     I am not suggesting that this is a sound economic plan, just pointing out the fact.
   Being in the middle of earnings season has supported the market more than bad news from the White House. 
   We will get the first quarter of Lyft’s earnings - a total misnomer as there are only losses. Uber will have its initial public offering this week and will supply its earnings as well. 
   The competition between these two benefits customers as they both discount. 
   I spoke to a woman who provides Uber service in Kerrville. 
    It is the essence of why we are not experiencing inflation as we all use the internet to find the cheapest prices possible. 
   It drives the bricks and mortar stores to discount. 
    The only people who don’t discount are those that appeal to our addictions to such items as carbohydrates, alcohol and sugar. 
   I guess the government ignores people’s cravings for coffee sold as milk shakes.
   I think we are headed for summer and no matter what analysts said last week, this is no Goldilocks market that is not too warm or not too hot. 
   It is a market looking for an excuse to pull back. 
     You just can’t ignore market multiples pushing 17. 
   That is not to say that we won’t go higher but it will take little to take a chunk out of the equities indexes. 
   A 7% decline in the Dow would be nearly 2000 points and that is not even a correction. 
   I suggest taking some of your money off the table. If you don’t have a profit now then take the loss and nothing will fix a train wreck.
   You have to take this at face value as I am a value investor and there is nothing out there of interest to me but golf and the baseball season. 

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