"If this is new normal, I am all in at least until it changes " by: John Sample

   We moved into June and are within sight of summer’s start June 21, as people begin to live in a more normal manner.  
   We continue to find the various indexes and averages pushing to new record high levels. 
   That said, there was much to evaluate from last week’s business news.  
   We have the new frontier of meme stocks.  
   These are stocks like Game Stock and AMC that had large short interest. 
   Retail investors attached the premise these stocks will drop in value and have pushed shares up, bringing significant losses to some of the most sophisticated investors on Wall Street.  
   That’s a win for small investors. There has long been this premise the stock market is rigged and only those who reside there make money. 
   Our Treasury Secretary over the weekend stipulated that rising interest rates would be good for the economy.  
   I say rising interest rates will help those with funds in banks make a more reasonable return on their savings.  
   It will also draw funds away from the stock market as people reduce risk.  
   It will also raise the debt this country seems to keep adding daily.  
   I do think it will strengthen the dollar’s value.  
   I feel that interest rates on Treasury bonds rising to 3% is a lot closer to normal than where we are right now. 
   The Treasury Secretary also led the G7 to propose a minimum on corporate tax rates at 15%.  
   The concept here is that companies like Amazon that had earnings and cash flow, but paid no taxes due to reinvesting in growth, will have to pay something each year.  
   I don’t think this is a bad proposal, but the devil is in the details.  
   China is not a participant and is our greatest competitor.  
   Third world countries will be allowed to tax at whatever rate they need to grow their economies.  
   My concern is the U.S. will comply at a cost to our competitiveness.  
   This reminds me of other treaties that the U.S. seeks to comply and the rest of the world ignores. 
   My concern is the U.S usually is left holding the bag and has to pay the freight.  
   Speaking of getting out there. Jeff Bezos and his brother will be on board the first spaceflight of his company Blue Origin in July.  
   His compatriot in high tech, Elon Musk announced that Tesla will terminate the Model S Plaid Plus.  
   These two are such great entrepreneurs because they dream big and cut losses when they need to. 
   I find nothing wrong with making mistakes. It’s absurd to continue on at a loss with little or no hope of recovery.  
   As we reorient ourselves to the new normal, there will be opportunities to find companies that made the right decisions last year and are poised to take advantage of what the new normal will bring.  
   This is why it is hard to bet against CEOs like Musk, Bezos and Cook. 

Rate this article: 
No votes yet