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Market Opinion | OnTheMark Investing

Market Opinion

Commentary for the week ending 04/29/2022

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Well, this has been a rough week (and month/quarter), especially for growth investors.  I have been particularly disappointed in PYPL and NFLX.  I think that NFLX will recover – I think worries over subscriber defections are overblown.  There is still room for growth, especially outside of the US.  But we will see.  As for PYPL, I am less than sanguine.  Management has been less than open with their reports.  So I can’t say I would buy more.  As for the rest of the stocks, stay the course and I still think you will be rewarded.  I am especially confident that AMZN will rebound.  Increases in Amazon Prime cost will absorb some of the higher shipping costs and it seems that AWS is unstoppable in the cloud market.  So buy more AMZN with confidence in long term returns.  I know that the fund has failed to beat the S&P so far this year, so again, in the long term I feel that these stocks will win. read more

Commentary for week ending 03/05/2022

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With all of the events happening in Ukraine, my comments will be somewhat brief.  

 

I want to remind you that panic is not a strategy.  Baron Rothschild, an 18th-century British nobleman and member of the Rothschild banking family, is credited with this saying:  “Buy when there’s blood in the streets, even if the blood is your own.”  This is an important reminder, especially if you are a 401k and/or IRA investor building your portfolio.  So continue to make regular investments in the market and don’t worry.  And if you are following my 90/10 rule on allocation, put the 10% cash to use!   read more

Commentary for the first 2 weeks of 2022

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Well, the first 2 weeks have been rough for the Growth Fund.  Recognition of inflation is finally showing up in the market, leading to a tech sector selloff.  I think much of the selloff is unjustified, particularly in the chip sector like LRCX, AMAT, and NVDA.  I think that these stocks will recover and exceed expectations by the end of the year.  So be patient, I think that these stocks represent buying opportunities – in fact, all of the stocks in the growth fund represent good values right now.  And Amazon is bargain priced now, I never thought I would say that about them but with AWS and the retail sector recovering, I see the stock at about 4,000 by year end.   It is a top pick now. read more

November 2021 Observations

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November was a month where the S&P dropped less than 1% but there were frequent swings in both the index and in the underlying market exuberance.

 

It is worth mentioning that December is usually a good month for the market.  It is worth mentioning that initial concerns about a COVID variant may be overblown.  It is worth mentioning that inflation may just be transient. read more

Commentary for the week of 11/29/2021

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Well, another week, another COVID variant.  This one is called “Omicron”.  Biden is banning non-Americans flying in from South African countries starting today.  Americans can enter assuming that they test negative for a COVID test (which is not always accurate and the incubation period is variable).    I guess that the virus must be smarter than we thought.  Apparently it can check a person’s passport and not infect Americans!  Utter nonsense.  The virus is probably already in the US so the ban will probably won’t do anything.  The real answer is to help those countries get vaccinated ASAP – Africa is the least vaccinated in the world.   read more

Commentary for week ending 11/06/2021

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Well, Congress has finally passed the “hard” infrastructure bill – something that they could have passed many months ago, if not for the progressives insistence on coupling the bill to the “soft” infrastructure bill.  It defies my imagination as to why they couldn’t come to the quite logical decision that something is better than nothing.  I guess that is why I will never be a politician.  To me, even if I was a member of the progressives, I would have voted for the first bill, and then break up the bigger “soft” bill into component pieces that would be easier to swallow.  I am sure that are some parts of the large bill that would find support among Republicans and more moderate Democrats.  Again, something is better than nothing! read more

Commentary for week ending 10/23/2021

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My commentary for this week will be relatively brief.  But I need to say something about Facebook (FB).  There have been a lot of comparisons to FB to being the “big tobacco” stock of 2021 because of the threat of legal actions.  Personally, I think that is fallacious as FB is a vital part of small business and I doubt that any legislation will stop it from collecting ad dollars.  I regard any weakness as a buying opportunity – not a reason to sell.  But let’s suppose that FB is like Altria ( née Phillip Morris).   Many years ago I bought 1,000 shares of Phillip Morris at about $18/share.  That 18,000 dollar investment netted me thousands of dollars thru growth, dividends and spin-offs.  Of course FB doesn’t pay a dividend but it makes it up in growth.  My point here is that hated stocks which fulfill a want like tobacco in the case of Altria or advertising in the case of FB, they often overcome adversity, thrive and grow.  read more

Commentary for week ending 10/02/2021

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News from the “puzzle palace” (otherwise known as Washington, DC):

  • Senator Elizabeth Warren calls the Chairman of the Federal Reserve “dangerous”.  Really?  Jay Powell may be too dovish for my tastes, but he is a fine man and I would hardly call him “dangerous”.  Senator Warren should apologize for her level of invective.
  • Congress is still struggling to pass the infrastructure bill.  As I previously stated, we need to improve our roads, bridges, airports, broadband, etc.  But the 3.5 trillion dollar Democrat “wish list” is a bridge too far.  
  • The administration wants banks to report transaction information on any account with more $600 to the IRS.  This is completely absurd and is an an unfair burden on small banks and businesses.  More importantly, the effect on tax compliance seems questionable.  I was talking to a friend in the IT department of a major bank and he was happy about this one.  Why?  Because it means virtual permanent employment for him as he would need to design, code, and debug thousands of lines of code to support this stupid requirement!  Here is more information:  ABA Letter to Senate Finance and House Ways and Means Committees: Views on Tax Information Reporting Proposal | American Bankers Association
  • Congress wants to virtually close IRA investing to high earners (glad I already built mine).  See this:  Why Is Everyone Talking About the Mega Backdoor Roth IRA? | The Motley Fool
  • The talks on the debt limit are patently ridiculous, since we those funds have already been appropriated and spent.  It is similar to an individual buying goods and services on their credit card and then refusing to pay.  If there is a “debt limit”, it should be done before the money is spent, not after!  Seems obvious, doesn’t it?  But not in the “puzzle palace” (oh, sorry, Washington, DC!).

On the market in general, I think we are in for some more trouble.  Limited supply of both goods (particularly chips) and service (i.e. workers) are putting us on the road to more inflation.   Anyone who has taken a beginning economics class will recognize a supply/demand curve imbalance that will only reach equilibrium with price increases.   read more