For those of you too young to recognize the name, or perhaps are not a connoisseur of baseball, Hoyt Wilhelm was a relief pitcher in the 1950s, 1960s and 1970s who was elected to the Baseball Hall of Fame in 1985. He specialized in throwing a knuckleball. A knuckleball was thrown by gripping the ball by the pitcher’s tips of his fingers. The result was pitch that fluttered in a seemingly random manner from the pitcher’s mound to Homeplate. Neither the pitcher, catcher or batter knew where the pitch would cross the plate, resulting in many fruitless swings, passed balls, or wild pitches.
Take a look for yourself!
https://www.youtube.com/watch?v=rucVctWJVMQ
I often say that when it comes to investing you have to swing at the pitches that are being thrown at you. We are currently in an economy in which the economic data flutters and dances all around in a seemingly random method. Some economists say we were in a recession, some say we are and some say we are yet to enter one. Some declare that inflation was bad and is getting better. Others prognosticate that inflation is only going to get worse. Some see GDP having peaked others having bottomed. As for jobs, everyone is grasping at straws guessing that the job market is getting better or worse. We just do not know.
What is making matters worse is that never in the recent history of the United States has there been an internal migration of population from “blue-high tax” states to “red-no or low” states of the magnitude as we are seeing now. Never mind the illegal immigration crossing the southern border. Hence, if you’re sitting in Florida, Texas, Arizona or Nevada, the economy is stable and strong. Here in Nevada after a few months respite, housing is back in production and sales are ticking up. If you are in Southern New York, New Jersey, Illinois, or California the economy is on the precipice of a major recession. The truth is, as I have been writing for some time, we have rolling regional recessions taking place, but not of a magnitude that should send shock waves through the nation.
The Federal Reserve Open Market Committee meets Tuesday and Wednesday this week. They will likely raise the Fed Funds rate ½ point but signal that they will slow down and end their tightening cycle this year. Furthermore, these next two weeks are busy for larger capitalization corporate earnings reports.
Industries that typically bottom after a recession are beginning to sprout green shoots such as semiconductors (except memory chips),technology, healthcare and consumer discretionary. However, don’t expect that the technology stocks of old will be the leaders in the next bull phase. As an example, social networking stocks will become, if they have not already, economic dinosaurs.
A little taste of what we have been buying lately is GE Healthcare (GEHC), Restoration Hardware (RH) and Agilent Technologies (A) In some strategies we have also added to positions in Tesla (TSLA) and shaved off some Apple (AAPL). We are not getting cautious on Apple, it’s just that the position was too outsized and was a source of funds for other purchase. As I eluded to earlier, beware of that knuckleball.
Finally, join me in wishing Carly Rothbort a Happy 30th Birthday. 30 on the 30th, a Golden one, in which we celebrated at the Vegas Golden Knights game!
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Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView Asset Management, LLC was long A, AAPL, GEHC, RH and TSLA- although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, (LVAM) an investment advisor representative, specializing in high net worth private wealth management. LVAM is affiliated with Kingswood Wealth Advisors Services, a registered investment advisor. 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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