When you factor out the hurricanes that hit the United States in September and the rantings / actions of the newly nicknamed despot; Rocket Man in North Korea, the equity markets have held in like a champ. It may seem to many that September was a boring month.
However, as investors know, boring can be a good thing. The S&P 500 (SPX) has advanced 1.42% for the month, closing yesterday at an all-time high; and, without any fanfare eclipsed the 2,500-milestone last Friday. That index is within striking distance of my year-end target of 2,600. The Dow Jones Industrials (DJIA) is amid an eight-day winning streak.
While I was quite active from a transactional perspective for most of the summer, in particular, with the Growth Portfolio, I am quite happy where we now sit with our portfolios, apart from the Restaurant & Food Strategy. That sector continues to be under pressure and I feel at times like I am swimming against the tide.
The two-day FOMC meeting will conclude today. I am not expecting any change in monetary policy. I do expect some commentary about the economic impact of the two major hurricanes to hit the US. While the FOMC will not make any specific statement to the effect, it might hint that economic weakness due to the hurricanes might push the next tightening into 2018. Most likely, FOMC Chair Janet Yellen will provide some clarity as to future balance sheet reductions.
I have to say that the banking industry in this country is a mess. Recently. I have had unpleasant experiences with two of the largest banks in the USA. First, there was Wells Fargo (WFC), where, to my strenuous objections, one of my internet companies, I Am App, opened a banking relationship. My preference was to do so with JP Morgan Chase (JPM). From day one, the account at WFC was a mess. Online access never seemed to work, Users were constantly locked out. Then the account was hacked and funds were stolen. WFC made restitution but my team got the message and we moved the account to JPM where I wanted it in the first place. We all know about the nefarious activities that WFC has been caught engaging in red handed the past few years. Bottom line: WFC is the nation’s most corrupt bank and really should get the Arthur Anderson treatment and be criminally indicted.
Then there was Bank of America (BAC). Let’s set aside how that bank has managed to turn Merrill Lynch from the best securities firm in the world (I worked there from 1991 to 2001) into an also-ran broker / investment bank without much street cred anymore. I was working with BAC to expand the relationship which my wife and I had with the bank. Their mortgage / home lending division is so incompetent that I felt like I was working with the Olympia Restaurant from the good old SNL days. The people working there did not know the difference between cash flow and depreciation. Heck, I learned that in my first accounting course at Wharton thirty-eight years ago. Then, after opening a new checking account, the bank managed to screw up all our accounts at BofA. Credit card payments were not posted. Bill payments were miss-programmed. We are closing our relationship rather than expanding it there. Bottom line: BAC is the most incompetent bank in the US.
At the end of the day, it really boils down to having one quality money center bank in the USA – JP Morgan Chase. Citibank ( C ) gets an honorable mention but is not in JPM’s league.
Tonight, begins the Jewish New Year at sundown with Rosh Hashanah. The briskets are all cooked and the chickens will be ready tomorrow. I will be taking the day off on Thursday and Friday to celebrate the holidays. Then after the holiday we will make our annual cross country trek with the puppies to Henderson, Nevada for the fall / winter / spring. I will be working on my wonderful Apple (AAPL) devices – iPhone and iPad – during the drive. By the time, I settle back into Nevada I will have some more commentary before we get ready to cook a Pacific Time Zone brisket for Yom Kippur. Let me extend my best wishes to all my family, friends, clients, colleagues and readers for a Happy and Healthy New Year.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long AAPL, DIA. DDM, SSO & SPXL — although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right hand corner of the website. LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant, beverage and agricultural stocks. An individual subscription to the newsletter can be ordered at www.restaurantstox.com Furthermore; Scott is also a professor at the Seton Hall Stillman School of Business in South Orange, NJ.
– Read Scott’s intra-day thoughts and comments on Scutify for which he is a co-founder of its parent company Wall Street All-Stars, LLC
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