BERKELEY SPRINGS, W.Va., July 19, 2012 – Futures were looking a bit sickly when we wrote yesterday’s column, so we expected a down day to counter the previous day’s nice rally. And that’s how things started sure enough. But the market reversed course and rallied again, proving that, well, you can’t prove anything these days, can you?
This morning’s market tone looks to continue yesterday’s rally, with Dow futures up a snappy 50 points or so as of 7:50 a.m. in a very sunny West Virginia, our way station back to the DC area after yesterday’s brief sojourn to Cleveland, Ohio where hotel connectivity always seems iffy at best. At least in the 2-2.5 star establishments where the Maven bunks, courtesy of Priceline, the brilliant, shining hero company of the Great Recession Great Depression II.
Interestingly, though, much of the news in the past couple of days has focused on Barack Obama’s breathtaking announcement at a carefully staged campaign rally in Roanoke, Virginia that entrepreneurs didn’t really build the companies they built. The government built them, effectively. Exact quote: “If you’ve got a business — you didn’t build that. Somebody else made that happen.”
On a literal level, what Obama was driving at may at times be true. Many a business has been started up with help from a loan from mommy and daddy or reasonably well off Uncle Bill. But the rest of Obama’s message made it clear he was really referencing assistance from the government as the prime mover in America’s extraordinary history of success, a gaffe of major proportions but also revelatory of this president’s contempt for American exceptionalism.
The resulting, and entirely unexpected firestorm that’s arisen since the President made these remarks has, at least for now, completely obliterated the Obama campaign’s scurrilous, Alinskyite attack on Mitt Romney’s Bain Capital days which seems at last to have replaced the Koch Brothers as Obama’s villain du jour.
This election tit-for-tat largely mirrors the action on Wall Street lately, where bulls joust with bears for dominance on a violent, day-to-day basis, effectively demolishing any traditional methods for stock and sector evaluation and driving longtime professional investors like the Maven completely nuts. The bulls are very temporarily in control now, reading Ben Bernanke’s tea leaves more closely than he and divining the necessity of QE3 stimulus which the Bernank himself regards as subject to the law of diminishing returns, given this feckless Congress’ inability to help him out with sensible fiscal legislation.
At any rate, this is our long-winded way of saying that the market will continue to impress and confound on a daily basis, meandering hopelessly until the November elections and the eventual resolution of the looming January 1, 2012. Throw into that the rapidly deteriorating situation in Syria and related Iranian saber rattling, and you have a fearful environment where most retail investors still fear to tread.
Be careful, and continue to stash most of your Benjamins into that bulging mattress. Except for utilities and selected REITs (which themselves took a bit of a hit yesterday), cash is still king in a market that still seems intent on relieving what’s left of your 401(k) of its remaining assets.
In the words of a wise sage, “Stay thirsty, my friends.”
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.
Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.
References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.
Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.
Follow Terry on Twitter @terryp17
This article is the copyrighted property of the writer and Communities @ WashingtonTimes.com. Written permission must be obtained before reprint in online or print media. REPRINTING TWTC CONTENT WITHOUT PERMISSION AND/OR PAYMENT IS THEFT AND PUNISHABLE BY LAW.