It is often said that “Bull Markets Don’t Die of Old Age.” In fact, it is Bear Markets that kill Bull Markets. What creates a Bear Market is a combination of economic events. Those events are a significant tightening of credit (not necessarily a Fed tightening cycle), a sustained loss of jobs and investor apathy; to name a few.
Since that mini correction in September, the stock markets have been on a tear. All three major stock market indexes are at or near all-time highs. As I wrote recently; a strong semi-conductor market is a tip-off to a strong growth market in stocks. The US Treasury yield curve has normalized, putting to rest the argument of those espousing an inversion.
Resilience is abounding in the stock market. The Schiff hearings in the House of Representatives have no bearing on the economy or the stock market. Tariff Tantrums have abated. The single most resilient stock is Boeing (BA) which has survived the 737 Max crisis. It appears that BA is even getting new orders for its problematic jet. I have been patient with BA shares. While it has underperformed the market, our positions are in the black. When BA stock takes off again, and it will, it will reach new highs.
Even the financial sector has risen from it slumber. The only sector which has not is energy. That being said, I do find it interesting that Warren Buffett’s Berkshire Hathaway (BRK/A, BRK/B) has been a seller of Wells Fargo (WFC) and was a buyer of Restoration Hardware (RH). It amazes me how WFC shares are near its own high. It just goes to show you that the rising tide lifts all boats.
As we head into the end of November, mutual fund selling is over. Investors will soon be locking down their portfolios and selling off any losers they might have before the month is over, to lock in losses and avoid wash sales. Right now, the only stock in our growth portfolio which would qualify for tax selling is Boston Beer (SAM) and even that loss is rather small, at about 0.15% of the portfolios, on average. This wash sale rule explains why I sold Roku (ROKU), waited 31 days and then bought it back.
If I do not write again in the next week; I would like to wish everyone a Happy Thanksgiving. As is custom in my family, we will celebrate the holiday with family in Scarsdale, NY. Should anyone want to meet with me, please let me know as I am east till December 4.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long ROKU & SAM – 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
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