Saturday, January 21, 2017

Observations and Sample of Recent Trades (ARRY, MNRPRC, MFCPRM, MFCPRN)

The Orange King claimed that the election was rigged in the event Hillary won. 

One of his sources was a fake news story that claimed Hillary partisans had already stuffed some ballots for Hillary before the election in Ohio. 

The Ohio Secretary of State denied that such an event occurred, but the Orange King was certain that it was true. 

The source of the story was after all a website called the 

The NYT just exposed the writer of that blog as a 23 year old Donald Trump supporter who blogs from his parent's house. From Headline to Photograph, a Fake News Masterpiece - The New York Times All of the assertions made by that Trump supporter were false and were known to be false.

I certainly can understand how the fake news story could be taken as true, provided the person is both stupid and ignorant.

Lying works in politics for the reasons just mentioned in the prior sentence. So why tell the truth or be accurate with information conveyed to the public when the constant repetition of false facts works so very well? Telling the truth or being realistic about campaign proposals are prescriptions for defeat in a U.S. election.

During the campaign, Donald was clocked as lying every three minutes during his speeches, far more than Ms. Hillary, yet the Ms. was successfully tagged and branded by the Orange King as both a crook and a liar judging from the exit polls. Donald Trump’s Week of Misrepresentations, Exaggerations and Half-Truths - POLITICO Magazine.

That article does not use the word lie in the title which has a mens rea  requirement, but I have no such reservation about that word's use given the number and repetitiveness of the easily proven "Misrepresentations, Exaggerations and Half-Truths."

Toronto Star compiles list of almost 500 Trump lies during campaign, Donald Trump's file | PolitiFactThe Whoppers of 2016.


When politicians lie as much as the Orange King, and he set a record in a presidential election and won by the way, it is important to demonize and belittle a free press that points out the constant parade of knowingly false statements.

In the minds of millions of voters, the "mainstream press" is nothing other than a propaganda machine for the left-wing, viewed as anyone to the left of Rush Limbaugh, Sean Hannity and Ann Coulter. Their articles can consequently be ignored in their entirety.

In the unlikely event the True Believer hears about an article published in the "mainstream" media, its content, which is probably being misrepresented by the speaker, can be readily dismissed as being false simply by being inconsistent with the True Believer's false information that is fervently believed to be true, their reality creations, or just plain ole fake news spread over the internet for the gullible and easily manipulated to absorb without exercising even the smallest decree of common sense and intelligence.

As I have said in the past, I was not pleased with the choices but I am rarely pleased anyway. I was just more displeased with my choices in 2016 than in prior elections going back 1972 when my choice was either Tricky Dick or Clueless George who was a much better person, though a few managed to have their eyes opened to that observation by subsequent events.  

I am a fiscal conservative and believe the nation is on an irreversible path to a fiscal meltdown due to the efforts made by both political tribes and their supporters. Trump will continue along that path.

I do not approve of lying and pie-in-the sky campaign promises, particularly when those proposals accelerate the nation's day of reckoning, which I estimate to be somewhere in the 15 to 20 year time period from now, possibly sooner rather than later depending on near and intermediate term future events.

I view Trump's main attribute to be his unquestionable success at self-promotion that has resulted in a successful business of licensing his name on just about everything, including the structures that are built with other peoples' money. Donald Trump's Real Secret To Riches: Create A Brand And License it: Forbes Magazine

Before building the Trump brand as the successful business, Trump managed to lose $916 Million, a legally dubious loss, that gave him a free ride on paying taxes for many years to come, which was another main source of his success along with what he inherited from his Daddy.

Some of name licensing businesses did not work out too well either: Trump University CasesFormer Trump University Workers Call the School a ‘Lie’ and a ‘Scheme’ in Testimony - The New York Times. When confronted with accurate reporting of an event, it is necessary to demonize the press and to convince everyone susceptible that the Orange King is the only source of truth and everyone else, except possibly Ann, Rush or Sean, is a source of fake news created for a bad ulterior motive by the left-wing mainstream media.

Why is the foregoing relevant to investing?  The herd consensus now is that Trump will lead the U.S. to economic nirvana. A more realistic assessment of the man based on his history is that there is more potential now for economic chaos than with any other U.S. President.

So a certain level of caution rather than exuberance will probably end up being the best investment strategy over the next 4 years, particularly after the stock market's run up after the election based on the herd consensus opinion about the impact of future policy changes.

1. Small Cap Biotech Lottery Ticket Basket Strategy

A. SOLD ARRY AT $11.25

This lot was bought at $4.1 on 8/3/16.

Profit Snapshot: +$355.48

Quote: Array BioPharma Inc. (ARRY) 

The market cap at $11.25 is about 1.9 billion.  

The 173% percentage gain was too good for the Old Geezer to leave alone. 

Calculate Percent Increase: Use Online Calculator To Find Percentage Increase, Decrease And Difference

I bought my 50 share lotto ticket before ARRY announced a drug failure in a late stage trial. 

Shortly after I bought my 50 share lot, ARRY reported that a Phase 3 trial of selumetinib in combination "with docetaxel chemotherapy as 2nd-line treatment in patients with KRAS mutation-positive (KRASm) locally-advanced or metastatic non-small cell lung cancer" failed to meet its "primary endpoint of progression-free survival (PFS), and selumetinib did not have a significant effect on overall survival (OS)." AstraZeneca Provides Update On Phase III Trial Of Selumetinib In Non-Small Cell Lung Cancer (8/9/16 Press Release). That failure result in a price slide on the day of its announcement: Array BioPharma shares fall 11% premarket after lung cancer drug trial fails to meet goals - MarketWatch

Failures will be more plentiful than successes in this sector. Cancer in particular is just hard. 

Array sold over 21 million shares in October at $6.5. Array BioPharma Announces Closing of Public Offering and Full Exercise of Option to Purchase

In between my purchase and now, there have been some positive developments on other compounds which led to the price almost tripling from my initial $4.1 purchase increase.

I do not have any expertise to evaluate whether ARRY will ultimately hit pay dirt. I do know that I harvested a $355.48 profit on a $206 investment in about 5 months. That is all that I really know.

Array BioPharma and Pierre Fabre Announce COLUMBUS Phase 3 Study of Encorafenib plus Binimetinib (9/26/16 Press Release)

Array BioPharma Announces Phase 3 BEACON CRC SPA Agreement with FDA (9/14/16 Press Release)

Array BioPharma and Pierre Fabre Announce COLUMBUS Phase 3 Study of Encorafenib plus Binimetinib (9/26/16 Press Release)

Array BioPharma Announces FDA Acceptance of Binimetinib NDA for Patients with Advanced NRAS-Mutant (9/1/16 Press Release)

Array Presents Data from Cardiovascular Trial with ARRY-797 at the European Society of Cardiology (8/30/16 Press Release)

2. Intermediate Term Bond Ladder Strategy 

Just in case I am wrong about the future course of interest rates, I have increased my weighting slightly in the intermediate term bond ladder, focusing on 2020-2022 maturities. The overall investment in the intermediate term ladder will be about 10% of the short term bond/CD ladder until I can secure significantly better rates than now. 

The abnormal monetary policies of the ECB, BOJ, and other European central banks doe provide a major headwind for increases in U.S. intermediate and long term interest rates.   

A. Bought 1 Shell 2.375% Senior Unsecured Bond Maturing on 8/21/2022

FINRA PAGE: Bond Detail

Credit Ratings: 

Moody's RatingAa2 (04/08/2016)
Standard & Poor's Rating
Fitch RatingAA- (11/07/2016)

B. Bought 2 Verizon 1.75% Senior Unsecured Bond Maturing on 8/15/21

FINRA Page: Bond Detail

Moody's RatingBaa1 (07/27/2016)
Standard & Poor's RatingBBB+ (07/28/2016)
Fitch RatingA- (07/27/2016)

YTM at Total Cost (96.274) = 2.62%

Moody's rates Verizon's new notes Baa1 (10/26/16 report); 

A. Added 1 Nextera 1.649% Senior Unsecured Bond Maturing on 9/1/18 (total now at 3)

FINRA Page: Bond Detail (bond prospectus linked at the FINRA Page)

Moody's RatingBaa1 (08/26/2016)
Standard & Poor's RatingBBB+ (08/26/2016)
Fitch RatingA- (08/01/2016)

YTM at Total Cost (99.994) = 1.684%

Common Stock Quote: NextEra Energy Inc.  (NEE) 

2016 Third Quarter Results ("reported third-quarter 2016 net income attributable to NextEra Energy on a GAAP basis of $753 million, or $1.62 per share, compared to $879 million, or $1.93 per share, in the third quarter of 2015. On an adjusted basis, NextEra Energy’s third-quarter 2016 earnings were $809 million, or $1.74 per share, compared to $730 million, or $1.60 per share, in the third quarter of 2015.")

B. Added 1 Diageo 1.125% Senior Unsecured Bond Maturing on 4/29/18

FINRA Page: Bond Detail

Moody's RatingA3 (12/15/2016)
Standard & Poor's Rating
Fitch RatingA- (11/03/2016)

YTM at Total Cost (99.725) = 1.343%

Diageo Website: Credit Ratings;

Link to Moody's Report Dated 12/15/16 

SEC Filed Annual Report For the Period Ending 6/30/16: 20-F

DEO Analyst Estimates

C. Bought 1 Shell 1.125% Senior Unsecured Bond Maturing on 8/21/17

FINRA Page:  Bond Detail

Moody's RatingAa2 (04/08/2016)
Standard & Poor's Rating
Fitch RatingAA- (11/07/2016)

YTM at Total Cost (99.999) = 1.126%

D. Bought 2 Bank of India U.S. .95% CDs Maturing on 10/25/2017: Bank of India - USA- about

E. Bought 1 Bank of China N.Y. .85% CD Maturing on 10/30/2017 

F. Bought 2 WFC 1.75% CDs (monthly interest payments) Maturing on 1/20/20 (OUTER LIMIT OF SHORT TERM BOND LADDER PERIOD)

All of the CD purchases are FDIC insured. 

I am now several thousand over a $200K allocation in this basket and do not know when I will stop adding to it.

Yellen appears to be moving closer to supporting gradual increases in the FF rate. FRB: Speech--Yellen, The Goals of Monetary Policy and How We Pursue Them--January 18, 2017

4. Paring Canadian Reset Equity Preferred Stocks: Trade snapshots for this category are located in this post: Advantages and Disadvantages of Equity Preferred Floating Rate Securities (net profit as of 1/19/17= +$19,055.3).

A. Sold 50 MFCPRM at C$20.51:

Profit Snapshot: C$113 

Quote:  Manulife Financial Corp. Non-Cumulative Preferred Series 17 (MFC.PR.M:TOR)

MFCPRM pays non-cumulative dividends at the current fixed coupon rate of 3.9% on a C$25 par value. That translates into about a 5.36% current yield at a total cost per share of C$18.2. The quick profit on the shares is more attractive to me than the dividend yield. I received only one quarterly dividend payment. For 50 shares, the annual dividend payment at the 3.9% fixed coupon rate is $48.75. It would take more than two years for those dividend payments to exceed the realized gain taken now.     

MFCPRM is another reset preferred. The fixed coupon will be paid through 12/19/19 whereupon the coupon will reset at a 2.36% spread to the five year Canadian Government Bond for five years and so on. If the Canadian five year is then higher than 1.54%, the coupon will increase compared to the current 3.9% fixed rate and decrease if the rate is less than 1.54%.  A potential coupon cut is a risk in this preferred stock sector. Resets at lower than the fixed rate coupon rates over the past few years caused prices to decline and created attractive entry points for many Canadian reset equity preferred stocks.  

MFC's preferred shares have a BBB+ rating from S & P, BBB- from Fitch and Pfd-2 from DBRS. The DBRS rating is equivalent to a BBB. Credit Ratings

At a 3% five year when the reset occurs late in December 2019, the coupon would be 5.36% or 7.69% at a constant total cost per share of C$18.2.

If the five year was then only .5%, the current yield would drop to about 3.93% on the reset date.

B. Sold 50 MFCPRN: +C$108 Profit

That lot was bought in November 2016 at C$18.7 and was discussed here.

MFCPRN pays a fixed coupon of 3.8% until March 2020 when it resets, unless redeemed by Manulife then at par value, at a 2.3% spread to the 5 year Canadian Bond.

5. Paring U.S. Fixed Coupon Equity Preferred Stocks:

A. Sold 100 MNRPRC at $24.85

Profit Snapshot: $71.93

Quote: Monmouth Real Estate Investment Corp. 6.125% Cumulative Preferred Series C Stock (MNR.PC) 

I discussed buy this REIT cumulative equity preferred stock in my SA Comment Blog.  

MNRPRC pays non-qualified and cumulative dividends at the fixed coupon rate of 6.125% on a $25 par value. Prospectus

This preferred stock was sold to the public in early September 2016.

Interest rates had started to rise in July. Shortly after the IPO, the price sank to as low as $23 in response to a continue rise in rates: MNR.PC Stock Chart

I did receive one dividend payment on the first 50 share lot bought ($16.59), bringing the total return for 100 shares up to $88.52.

The quarterly ex dividend date is on 2/13/16.

I  doubt that I would buy back even 50 shares now above $23.5. At a total cost of $23.5 per share, the yield would be about 6.49%. In part, the next nibble will take into consideration interest rate and inflation trends, including changes in the break-even spreads for the intermediate term TIPs which have been rising. If the ten year treasury rises to 3%, I may need at least a 7% yield on an equity preferred stock before buying when the prior trend line is up for both inflation and inflation expectations.      

Monmouth SEC Filings 

2016 3rd Quarter Earnings Report 

Again, I am selling recently bought and potentially long duration fixed income securities based on an anticipation that the securities can be repurchased at lower prices and higher yields. This is just an example of small ball. Clip a dividend or two and sell for a quick profit.  

Stocks, Bonds & Politics: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks

6. Paring Recently Bought, Potentially Long Duration Exchange Traded Bonds:

A. Sold 100 SOJB

Profit Snapshot: +$93.37

Quote:  Southern Co. 5.25% Junior Subordinated Notes (SOJB)

SOJB is a junior bond that matures on 10/1/2076 unless redeemed early at the issuer's option. In short, this bond has interest rate risk coming out of the wazoo for the owner and a minimal amount for the issuer who can redeem at par value on or after 10/1/21.


I discussed buying the two fifty share lots in my SA Comment Blog and noted there that SOJB was on one short leash. I did harvest one quarterly interest payment on the first 50 share lot purchase. The amount was $19.32 and was paid on 1/3/17. 

Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". 
Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.


  1. South Gent,

    South Gent,

    Do you still have your lottery ticket, GRVY? Up almost 600% in a year. It is up over 100% from 2013 when you first mentioned it.

  2. Y: I do not own GRVY now and do not recall ever owning it.

    I had an eventful trip yesterday to the Tropicana Casino in Evansville, Indiana, a nice town located on the Ohio River.

    My last surviving Uncle who is 88 likes to play the slots and the Casino is most generous in giving him free play, free rooms and free meals. He can not drive up there, so I take him and play blackjack. Pushing a button and having a computer decide my fate are not sources of entertainment for me.

    It is never good to get frustrated with an investment that goes down in price. The emotional reaction to losing money is frequently the wrong one as shown by those who exited the stock market in October 2008 to relieve the pain of losing.

    I only experience that kind of emotional reaction when playing Blackjack for inconsequential sums of money.

    On Saturday morning, I was ready to drive home, but my Uncle had to play the slots again, hoping to recoup the losses suffered in the previous evening session.

    Having nothing better to do, I sat down at the Blackjack table again and was promptly burned $1K in incredibly bad hands that seemed like a long term secular bear market in cards with no end in sight.

    I was down to $475 so I moved the entire pile out to play one last hand over Left Brain's strenuous protests. The table limit is $500 per hand so the bit boss was called over to inspect my towering pile of chips sitting on that small circle.

    The women to my right gasped and one said that I was making her nervous.

    The dealer dealt me a 14 (10 +4), which was the norm. The dealer had an 8 showing. The math says that I have to draw a card or so I am told by those who have done the math. I am supposed to win more hands that way. Either way, I am a probable loser but will lose fewer times by drawing rather than standing pat.

    Prior to that draw, all previous draws to a bust hand that morning had lost so I was thinking that something was wrong with the math.

    I miraculously did not bust, drawing a 5 that gave me a 19.

    The dealer turned over the whole card, displaying to my relief a face card. The dealer lost by 1 point. And, I was in one stroke within 50 dollars of being even.

  3. South Gent,

    Good job on your last hand of Blackjack and it was daring. I think if you know what you can afford to lose, you will be able to make such a bet. Many people lost too much money relative to their assets during Financial Crisis and they thought if they stayed any longer, they could be completely wiped out. Not many people saw the market trough in March 2019.

    I bought GRVY on 6/10/2013 and made a note as "SG LT". But my memory is not as sharp as it used to be and I could have mixed it up with something else. It is difficult to know when to fold or when to cash in these Lottery Tickets.

  4. I think you know that I meant to say the market trough in "March 2009".

  5. We now have a new phrase for lies:

    "Alternate Facts" in an Alternate Universe

    Are alternate facts consistent with a true conservative ideology? The answer is of course that lying and conservative values are polar opposites.

    The Associated Press compiled a list of the false statements made by Donald in his inaugural speech.

    In comments to the YF dissemination of that article, the True Believers either dismissed the fact checkers as biased and/or complained that the mainstream media never fact checked Obama's speeches. Both claims merely prove their ignorance.

    I rarely watch politicians speak, regardless of their party affiliation, but will peruse transcripts when available. It is never difficult to identify Trump knowingly false statements.


    The main takeaway for investors is that Trump's protectionism is alive and flourishing:

    "Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs. Protection will lead to great prosperity and strength."

    The market still assigns a zero chance that Trump will start a trade war notwithstanding his repeated rhetoric to the contrary. The odds are clearly well above zero.

    NPR has a transcript with comments.

  6. GLD: I did add to my GLD position last Friday before leaving for the other casino.

    The reasons are as stated in prior comments and posts. I am basically hedging Trump.

    I will discuss that trade and some others in a post likely to be published next Wednesday.

    Tomorrow, I plan to publish a post discussing TIPs.

    That post will update the last one published on that subject:

  7. I see here some thoughts on the speech in the comments. (They weren't emailed to me, when last week some were. I have to work on that.)

    His lack of knowledge of most things government and constitution are beginning to worry me. They were of concern before the vote, but then I hoped they'd turn out to not be as big an issue (since I could do nothing about it). This is a worry area.

    I had a nice Saturday. Joined in the march. What a large, and very pleasant crowd. I didn't hear any of the podium speeches. Maybe I'll listen online one of these days. Hope for me is pressure will help him see himself as having less of a mandate and be just a little slower on some of those campaign promises and thinking that were off the wall...or at least that some of Congress with see it and do some check and balancing.

    My favorite chant -
    "We will not go away,
    welcome to your first day."

    Another one, more for fun:
    "We need a strong leader,
    not a creepy tweeter."

    I was disappointed in the media coverage. It wouldn't have taken long to get recordings of these and snaps of the many posters. Instead they focused on themes that weren't present. I saw maybe 2-3 signs about "not my president" and most signs didn't say anything like that (and there were A LOT of signs) -- but even MSNBC had a story with that sentiment as the lead.

  8. LMH: It is okay for Trump to lead a GOP birther movement to claim that Obama was not a legitimate President, while it is unforgivable when a Democrat congressman asserts that Trump is not a legitimate President due to Russian interference in the U.S. election and the abundance of fake news originating from Trump supporters.

    Trump is the legitimate U.S. President. He won the electoral college vote and nothing is gained by claiming otherwise other than to give Kellyann Conway, the Alternate Fact Lady, something to harp on.

    I enjoyed watching the latest SNL sketch on her:

  9. South Gent,

    Thank you for the update on ARRY. I also sold out my ARRY position that was bought in 2014. The risk/reward ratio is not as attractive as it once was.

  10. SG,
    I think you are too optimistic on Trump.

    1. Randy: You may want to read my next post which may be published tomorrow or Saturday. I do not pull any punches.

      I am starting to cut back on my stock and long bond allocations since I believe the market is seriously mispricing the potential economic and political turmoil that Trump may bring to us all. The market is assigning a zero chance to possible and probable negative consequences which I view as delusional.

      His policies will likely add to inflationary pressures that are already building. If that proves to be a prescient observation, the Bond Ghouls have it all wrong too.

      Besides, as I will say in the next post, I do not need to take chances and have done well since March 2009. I am going to accelerate my flight to safety while still maintaining a meaningful allocation to stocks, though at a significantly lower level than now.

  11. Love that these come to my inbox now. So easy to read and follow long. I can't figure out which way to sit these days. reading for now.

    There's little market indication that a problem is coming. Unlike usual, the problem if it arrives is black swan type based on news... when we hear someone slip over rolling (missing) marbles, and a they (i.e. congress) files a damages "case."

    Curious to see your inflation assessment. I would think it would take a couple years for it to come into effect enough to trigger the usual "inflation causes tightening causes recession." So it'd be early to be reacting FOR SOMEONE LIKE me who still needs to build on my funds.

    1. LMH: You will sometimes receive the same comment in two slightly different versions by email. I can not edit a comment after publication; and it hard for me to review prior to hitting the publish button.

      That leads me to delete the first post quickly when I find an error. I simply drag and drop the comment into another comment box and then correct the typos or other errors.

      Even if I delete the first version within thirty seconds, it is already on the way to anyone receiving an email feed which occurs after checking the "notify me" box below. It is really a fast delivery directly to your email box.

      There is no market indication that there will be a problem.

      It is still onward and upward, a clear blue sky into infinity, as the U.S. economy shifts into a perpetual growth machine. Being naturally contrarian, I have to step back when the herd starts assigning a zero per cent chance to anything upsetting their common vision about what lies ahead and formulate my own opinion based on observed data points that are becoming more concerning everyday now.

  12. Hoping my long comment just now got through because it didn't notify me that it did. And I did save before posting. I will make a habit of putting to clipboard before posting...

    1. LMH: I don't understand the problem that you are having. I have to approve comments before publication. Once I publish a comment, either my own or from a reader, there is an email notification sent to me since I am checking all of the "notify me" boxes.

  13. I had written a long comment which will be hard to regeneration. My mind works ... only once :).

    Then I pressed publish. The page regenerated and simply lost the comment.

    Then I write that short one that you published, the page regenerated and asked me to sign back in (I had posted yet another prior comment while signed in, so no idea where my sign in disappeared to.)

    So that's the saga. Until it's a repeat behavior, there's nothing much to assess.

    Now I will try to recreate my original thoughts.

  14. I had noticed sometimes double comments, and figured out they were edits. There's another program I post to that does the same thing. The delete button works fine on my mail, and takes care of doubles :).

    Market prices have been climbing, but sentiment is around 50%. So there doesn't seem to be a happy market? Prices are up, but with sentiment not following yet, it's not normally time for the reverse?

    FG pointed out there's been another DOW theory buy signal and DOW transports made new highs. He's shown charts that DOW theory buy signal has almost never been incorrect about new highs coming.

    LTTF (an SA user) follows A/D line closely and points out there's breath. Also that all the prior recessions were proceeded by A/D narrowing.

    So those are indications that the data isn't pointing to a reverse point?

    I think my last topics, with better segue was:
    Yesterday VIX closed at around 10.6 or 10.8, but futures are at around 12's. I don't understand why they would be so different.

    1. LMH: The Vix Model is flashing green with readings well within the Stable VIX Pattern parameters. The market moved back into a SVP last summer:

      I do not see anything concrete in the market's price action that would suggest a correction or bear market is in the offing.

      The recent parabolic increase and stall does not prove that the market is in imminent danger of a major reversal. Parabolic spikes and clearly excessive valuations can continue for months or even a few years before collapsing. The longest parabolic spike for a stock market was probably in Japan between about 1985 and 1989. The Nikkei 250 topped out near 39,000 in 1989 and is now moving closer to 20,000:

      The parabolic spike in that average starting in 1982 was clearly a dangerous parabola.

      I would have made the same observation about the U.S. stock market's momentum in 1999 and 2007 when looking at only charts and focusing on price momentum rather than valuations and other fundamental factors including the possibility of black swan type of events.

      For me, since I am not in an asset accumulation phase, and have no financial need to take risks with the money that I have, I see no reason to be greedy here. I have participated to a significant decree in the market's rise since March 2009.

      I will keep money in the market as a hedge against my growing pessimism about the lurking dangers being wrong. For example, I will not sell a share of a single T. Rowe Price Mutual fund that I own, and the position in those funds is significant for me.

      If I start selling individual stock positions bought during the Near Depression, then I have transitioned into the really worried, get me out of here phase which is where I was in 1999.

      I have later posts than this one. I am now leaving comments here:

      I may have a new post later today. I woke up at 4:00 A.M. this morning with Trump running through my brain cells like crazy.

  15. you're saying that Trump does get exercise after all?

    Most get quite a bit with all the people who's minds he's running through.

    Explanation made it clearly. Traditional and your own preferred indicators show a content market. It's just the black swan with the orange undertones, that you are hedging for.

    Now I'm getting comments, but I think not notice of new postings. One of these days all will happen steadily...

    1. LMH: Yes, when you look only at internal market dynamics (e.g. the VIX Model), I do not see anything flashing yellow or red---yet.

      The market appears only to be consolidating its recent gains in it present movement.

      The stock market is not going to trade off Trump's Muslim ban. Trump supporters wanted this ban and he gave it to them.

      Trump will need to do something else, more directly connected to the economy, like starting a trade war with Mexico, Canada and/or China or imposing tariffs/taxes on all imported goods, before the market will take note of his actions.

      A Trump induced decline would not IMO be properly characterized as a Black Swan since potential negative actions by Trump are known and understood by market participants who make decisions impacting the marginal prices of stocks.

      It is irrelevant whether individual investors understand or even Trump supporters who manage money.

      His words will need to translate into actions that the stock market cares about. At the moment, the market is focusing on what it views as the positive implications of a Trump presidency which includes lower corporate taxes, less regulations and the repatriation of foreign cash.

      I do not agree with the market on those issues. For example, I know that the repatriation holiday passed during the Clinton administration did not result in job creation. The corporations who moved cash back into the U.S. cut jobs on balance. Instead of creating U.S. jobs, the foreign cash was used to increase dividends, buy back stock and increase executive compensation. Those kind of uses will favorably impact someone who owns a lot of stocks but will have no meaningful and long term favorable impact on the economy.

      I am in not in the capital accumulation mode. Based on my financial circumstances, I do not need to take risks. I am naturally conservative and a frugal spender who has no debt. Both the stock and longer duration bonds have an abundance of risk embodied in their current prices and are based IMO on unrealistic expectations about the future. So, given an appraisal of my own particular circumstances, I am going to go into what I call a bunker mode and wait for incoming, or becoming a turtle who pulls the soft tissue back into the shell when sensing danger as another analogy.