One thing of which we never seem to have a shortage … for good or bad … are forecasters … especially regarding investments … for the press seems to give free rein to provide views … and if these prophets are wrong … well, no problem … we’ll call them “gurus” and ask them for another opinion at some future date.
I often wonder about this when I read about “odds” and chances for recession. I mean … if someone claims a 60% chance of recession … and no recession appears … can’t they just say that … well … the result fell in the 40% camp? I was reminded of this puzzle when I read on Reuters that Janet Yellen, the former Fed Reserve Chair, doesn’t anticipate recession next year … yet claims the odds are “higher than normal.” I still don’t know if I should worry after hearing this … but that is true about most articles I read lately.
What reminded me of this was the article last week that I put out that shows 50% of strategists expect a market downturn in 2020. Now today I include an item (first story below) that claims JP Morgan feels it will be a banner year for equities. That’s why many of us just sit on the sidelines. Anyone with a computer can appear to be an expert, a journalist, or an author. Most opinions aren’t worth the paper they’re written on … and we should keep in mind that … in this day and age with computers … they aren’t even written on any paper at all. And rightfully so.
Sorry to be down on forecasters. I think the realization that I still own some Bitcoin – which recently dropped to $7,000 – from $20,000 last year – has set in. Tom Lee recently called for each Bitcoin to be worth $40,000 by the end of this year. Tim Draper of Draper Associates just gave the view that it will reach $250,000 sometime over the next 3 years. Each claim … much like the famed Nigerian Prince email … probably gets a few people with dreams to buy into the hype. Like me.
On a final note … and the last article below … as we begin to prepare for the holidays we should keep in mind that some are not as fortunate as many of us.
A group contacted me and invited me to an event where people/friends/acquaintances show up at a bar to get together for a friendly holiday toast … and toss money into a donation box where funds will be used for kids and families down on their luck. What a great idea!
If, somehow, my donation can help one child enjoy Christmas … somehow I will be better off.
And so will the world.
Have a great day,
Joseph G. Witthohn, CFA
Emerald Asset Management PA, LLC
610 Freedom Business Center Drive
King of Prussia, PA 19406
Direct: (610) 285-9905
… as of 11:44 AM today …
Quick Look at the News
Are you worried about stocks in the coming year? JP Morgan says not to be worried ... as the group sees another strong year for stocks in 2020 (MarketWatch)https://www.marketwatch.com/story/the-great-rotation-will-arrive-in-2020-and-bring-another-strong-year-for-stocks-jp-morgan-says-2019-11-25
... but it is an election year and Goldman worries that one party might undo some of the tax reforms put into place over the last year ... with a sad result for investors (MarketWatch)https://www.marketwatch.com/story/a-unified-democratic-administration-could-crush-stocks-goldman-warns-2019-11-25
Some CEOs are getting pressure on climate change ... but it is not investors giving them grief, it's their own children (Fortune)https://fortune.com/2019/11/25/ceos-climate-change-kids/
... but should these CEOs switch (at home) to electric cars? Some studies show no benefit to do so (though, to be fair, it seems they base studies on today's source of electricity (TheGuardian)https://www.theguardian.com/environment/2019/nov/25/are-electric-vehicles-really-so-climate-friendly
Happier people don't have children ... or at least that is the result of one study. But, wait, it only goes out two years after birth. This seems quite short-sighted to me (Mic)https://www.mic.com/articles/123826/science-has-good-news-for-people-who-dont-want-kids
When we celebrate Thanksgiving we think of Pilgrims and Native Americans enjoying a feast. That they did, but one group might have just been sizing up the naïve competition for a planned battle ahead (CNN)https://www.cnn.com/2019/11/24/us/native-americans-national-day-of-mourning/index.html
... but while we celebrate with an enormous meal ... be thankful for your blessings... for there are still many of us in poverty and even some Americans without basic plumbing (MarketWatch)https://www.marketwatch.com/story/2-million-americans-dont-have-access-to-running-water-and-basic-plumbing-2019-11-20