September 4, 2020
Yesterday and today saw the sell-off of a good portion of the NASDAQ—which just happens to be where a good deal of our portfolio holdings are. And we took it on the nose—and other body parts, too. (Not sure yet, I’m still checking the damage, but I need a full-length mirror to do a really first-rate job.)
What I found interesting (beyond watching our portfolios jump out of the stock market airplane sans parachute) was that yesterday, Thursday, the NASDAQ Composite Index bottomed right at the 20-day index moving average. And—and I’m sure this was just a coinky-dink—today, Friday, the same index bottomed right at the 50-day moving average. Almost like the market-makers wanted enough of a drop to buy back in cheap but without the full-on panic that would likely occur if the drop to the 50-day average had happened in just one day.
What are we to make of this? Well… if it smells like Teen Spirit, it probably is. There’s no question the NASDAQ was getting—what’s that word the pundits (who know nothing other than how to pundit) like to use? “Frothy”, I think it is. Maybe even “Bubbly”.
Since you’re paying me to manage your portfolios, I presume you want me to manage them and not “Run in Circles, Scream and Shout!” And that’s what I’m doing—by not reacting to, what seems to me, a picture-perfect round of machine selling followed by tip-toe buying back in—which is what we saw later in the day today.
Over the past 2 days, a good number of our stocks became really good buys again. How nice that we already bought them far cheaper months ago.
Where do we go from here? Well… that’s always the question, isn’t it?
As always, I pray that God richly blesses you and your family and animals!
Best Wishes in Peace and Joyfulness,
P.S. As a matter of interest, I actually flew the airplane in the photo above (from the opening scene of the James Bond film “Moonraker”). It’s a Handley-Page HP-137 Jetstream and it was in the service of Apollo Airways/Pacific Coast Airlines (where I flew as both a First Officer and Captain) from the early 1980s on until bankruptcy ended the ride. The airplane was commemorated with the inscription “Moonraker” under the Captain’s “Direct View” (“DV”) window. I don’t know where it is today or if it’s even still flying. – Kaye