Wednesday, August 22, 2018

Random market comments...

---Toll Brothers builders reported strong results today, which was seen by some as an affirmation of the housing market.  Their average house sells for $840,000.  That's across a range of cities, not just New York.  They are luxury builders that are not representative at all of the broader market.  In fact, this could be viewed as negative news because what it really affirms is that the bifurcation of wealth is becoming more extreme.  In the long run that is not sustainable, economically or politically.

---In recent days Elon Musk has shown that his brilliance does not extend to understanding how the stock market works.  Like everything else, he wants to solve it and control it in a way that seems to be becoming an obsession.  He needs to be told that his job is to focus on his businesses, only make decisions based on business needs, and not on trying to influence the stock price.  The market may not appreciate what he sees, but if it works the market will catch up.  His angst is the cause of market concern now.

---Trump has suggested that consideration be given to earnings reporting by corporations every six months and not quarterly.  Some in his cabal have convinced him that quarterly reporting is too time consuming, too costly, and not constructive to long term investing.  That is a terrible idea.  For some industries the argument could be made, I guess, but to many firms the variability in their operating environment makes quarterly reporting a necessity.  For financial firms, a quarterly credit check is essential for investors.  If Regulation FD is followed to the letter, six month reporting could be feasible, MAYBE, but Trump and his team are working to weaken Reg. FD already.  This makes no sense.  Hedge funds and active traders would just have a more open playing field and traditional investors would be less informed.  What should be done more rigorously? Companies in general should stop giving quarterly guidance.  Underscore that.

---When watching CNBC, there is the recurring thought here now that Jim Cramer is trying to put himself in position to be Secretary of the Treasury.  Ludicrous right, well maybe.  He frequently goes to extremes to rationalize Trump's policies now.  He loves attention and he has watched the constant CNBC contributor Larry Kudlow become a key economic adviser to Trump.  Cramer has been in his current gig for a long time and such a change would be a capstone to his minor celebrity life.  The creepy Mnuchin cannot be enjoying his role too much these days as he, at times, openly disagrees with Trump, in particular on trade, and has recently been more in the background.  He has just watched Trump minions bite the dust.

Watch Cramer for half an hour if you can stomach it, and see what I mean.


Post a Comment

<< Home