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UPDATE TURNING 65? YOU NEED TO SIGN UP FOR MEDICARE UPDATE JANUARY 28, 2021

 

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THIS ARTICLE WAS PUBLISHED JANUARY 12, BEFORE ALL THIS MARKET ROUT HAPPENED AND WAS ALSO SENT TO CLIENT

NOW HERE IT IS FOR YOUR ENJOYMENT

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"BUY THE RUMOR. SELL THE NEWS. IS A MARKET CORRECTION COMING?'

 

JANUARY 12, 2021

 

There is an old saying in the investing world: “buy the rumor, sell the news”.

This, like all other quips in the world of stocks, is by no means a precursor to what will happen, only what might happen. This saying refers to the possibility that a stock will rise in price as a rumor hits the mill, only to fall when the rumor becomes fact.

For example. Imagine a smart phone manufacture who is rumored to have a blowout quarter in an upcoming earning season. The stock might increase as the rumor makes its way around Wall Street and public media. Then when the company posts earnings, it is indeed a blowout quarter. Surprising many an investor however, the stock sells off on the news.

This would be a classic example of “buy the rumor, sell the news”. It doesn’t always happen where good news is sold off, but it has happened more often than one would think.

We can take this occurrence and extrapolate it to the general market. The question now becomes can the current market rally, which has brought it above 30,000 on the Dow for the first time ever, continue to set even higher highs?

It is no surprise the markets new high flies in the face of current economic conditions. Indeed, the economy, because of the CoVid shutdowns, has seldom been in worse shape. Meanwhile, since the third week of March, the markets have recorded historic gains, to rise from Dow low of 18,213 to over 30,000.

The markets obviously were not looking at what was.

What was, was an economy shuttered by CoVid.

Instead, it could be argued, the markets meteoric rise was because investors were likely looking at what will be. 

What the market was looking forward to was a vaccine, humongous Fed spending, and an eventual reopening of the world’s economies. From week to week and from month to month, since the current environment was so bad, the hopes of a world reopening and what that would bring, was enough to push the markets ever higher. Its almost as if times were so bleak, the imagination of investors kept the registers ringing on Wall Street, and therefore, kept the stock market rising.

Fast forward to today, and we could be looking at an extremely overstretched market, which some argue is historically overbought on many levels.  At this time, it might be time to ask, what more good news could come out?

The vaccine it here and the Fed has spent trillions. Reopening is happening and the vaccine is making its way around the globe. It is only a matter of time before the world resumes at least some sense of normalcy.

That said, as of now, I can only see one more piece of good news in our future and the rumor of that is already out. One more round of stimulus from the Biden administration is in the works, and we already know it is.

What this means, at least to this analyst, is that the good news, possibly all of it, is already baked into the proverbial cake. The market could be said to be as high as the good news warrants, and has nothing to look forward to.

In my opinion, with a market that has risen close 60% off its lows in a mere 9 months, it is time for caution. If portfolios reflect market gains, then profits could be substantial, and protecting such profits should now be the order of the day.

After all, it’s better to miss a market top, then ride a market back down in a severe correction. 

A perfect “buy the rumor, sell the news” event may be setting up with the announcement of the final stimulus program from Washington.

That said, another saying comes to mind right now, and that saying goes something like this: “Nobody ever went broke taking a profit”.

Ignore at your own peril.

 

 

This article expresses the opinion of Marc Cuniberti only and does not reflect the opinion of any news media or financial firm and is not meant as investment advice. Investing involves risk and you can lose money. No one can predict market movements at any time. Consult a financial professional before making any investment decisions. A full list of service from Mr. Cuniberti can be viewed at www.moneymanagementradio.com. California Insurance Lic# 0L34249. Medicare agent and market analyst, Mr. Cuniberti graduated in 1979 with honors with a B.A. in Economics from SDSU. He can be reached at (530) 559-1214

 

 


 

Watch out for possible market correction here Update Jan 17 2021

 

JAPANESE MARKET CHART

TYPICAL PATTERN

IS OUR MARKET SETTING UP FOR THIS?
READ ON

 

There is an old saying in the investing world: “buy the rumor, sell the news”.

This, like all other quips in the world of stocks, is by no means a precursor to what will happen, only what might happen. This saying refers to the possibility that a stock will rise in price as a rumor hits the mill, only to fall when the rumor becomes fact.

For example. Imagine a smart phone manufacture who is rumored to have a blowout quarter in an upcoming earning season. The stock might increase as the rumor makes its way around Wall Street and public media. Then when the company posts earnings, it is indeed a blowout quarter. Surprising many an investor however, the stock sells off on the news.

This would be a classic example of “buy the rumor, sell the news”. It doesn’t always happen where good news is sold off, but it has happened more often than one would think.

We can take this occurrence and extrapolate it to the general market. The question now becomes can the current market rally, which has brought it above 30,000 on the Dow for the first time ever, continue to set even higher highs?

It is no surprise the markets new high flies in the face of current economic conditions. Indeed, the economy, because of the CoVid shutdowns, has seldom been in worse shape. Meanwhile, since the third week of March, the markets have recorded historic gains, to rise from Dow low of 18,213 to over 30,000.

The markets obviously were not looking at what was.

What was, was an economy shuttered by CoVid.

Instead, it could be argued, the markets meteoric rise was because investors were likely looking at what will be.  

What the market was looking forward to was a vaccine, humongous Fed spending, and an eventual reopening of the world’s economies. From week to week and from month to month, since the current environment was so bad, the hopes of a world reopening and what that would bring, was enough to push the markets ever higher. Its almost as if times were so bleak, the imagination of investors kept the registers ringing on Wall Street, and therefore, kept the stock market rising.

Fast forward to today, and we could be looking at an extremely overstretched market, which some argue is historically overbought on many levels.  At this time, it might be time to ask, what more good news could come out?

The vaccine it here and the Fed has spent trillions. Reopening is happening and the vaccine is making its way around the globe. It is only a matter of time before the world resumes at least some sense of normalcy.

That said, as of now, I can only see one more piece of good news in our future and the rumor of that is already out. One more round of stimulus from the Biden administration is in the works, and we already know it is.

What this means, at least to this analyst, is that the good news, possibly all of it, is already baked into the proverbial cake. The market could be said to be as high as the good news warrants, and has nothing to look forward to.

In my opinion, with a market that has risen close 60% off its lows in a mere 9 months, it is time for caution. If portfolios reflect market gains, then profits could be substantial, and protecting such profits should now be the order of the day.

After all, it’s better to miss a market top, then ride a market back down in a severe correction.  

A perfect “buy the rumor, sell the news” event may be setting up with the announcement of the final stimulus program from Washington.

That said, another saying comes to mind right now, and that saying goes something like this: “Nobody ever went broke taking a profit”.

Ignore at your own peril.

This article expresses the opinion of Marc Cuniberti only and does not reflect the opinion of any news media or financial firm and is not meant as investment advice. Investing involves risk and you can lose money. No one can predict market movements at any time. Consult a financial professional before making any investment decisions. A full list of service from Mr. Cuniberti can be viewed at www.moneymanagementradio.com. California Insurance Lic# 0L34249. Medicare agent and market analyst, Mr. Cuniberti graduated in 1979 with honors with a B.A. in Economics from SDSU. He can be reached at (530) 559-1214

 

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Update follow up Marc nails the BITCOIN CORRECTION Jan 12 2021

 

A bubble or best thing going?

 

(I WROTE THIS UPDATE on SUNDAY   JAN 10- See date on the update)

 

Here is Monday's January 11th, 2021 news on CNN :

 

New York (CNN Business)"Bitcoin prices surged to a new all-time high of nearly $42,000 on Friday, only to plunge all the way back to about $31,000 Monday morning. That's a more than 20% drop -- which means bitcoin is now in a bear market, as bizarre as it sounds".

 

Did I call it or what?

 

 

 

https://www.marketwatch.com/discover?url=https%3A%2F%2Fwww.marketwatch.c...

 

BITCOIN BUBBLE ?  Read this great article..... 

 

What Is a Bubble?

A bubble is an economic cycle that is characterized by the rapid escalation of market value, particularly in the price of assets. This fast inflation is followed by a quick decrease in value, or a contraction, that is sometimes referred to as a "crash" or a "bubble burst."

 

Typically, a bubble is created by a surge in asset prices that is driven by exuberant market behavior. During a bubble, assets typically trade at a price, or within a price range, that greatly exceeds the asset's intrinsic value (the price does not align with the fundamentals of the asset).

 

Be careful kids......

Marc

January 10, 2021

 

(530)559 1214

Investments

Commentary

Insurance     Fire specialists

Medicare 

 

 


 

Bitcoin in a bubble Jan 10 2021

 

A bubble or best thing going?

 

(I WROTE THIS UPDATE on SUNDAY   JAN 10- See date on the update)

 

Here is Monday's January 11th, 2021 news on CNN :

 

New York (CNN Business)"Bitcoin prices surged to a new all-time high of nearly $42,000 on Friday, only to plunge all the way back to about $31,000 Monday morning. That's a more than 20% drop -- which means bitcoin is now in a bear market, as bizarre as it sounds".

 

Did I call it or what?

 

 

 

https://www.marketwatch.com/discover?url=https%3A%2F%2Fwww.marketwatch.c...

 

BITCOIN BUBBLE ?  Read this great article..... 

 

What Is a Bubble?

A bubble is an economic cycle that is characterized by the rapid escalation of market value, particularly in the price of assets. This fast inflation is followed by a quick decrease in value, or a contraction, that is sometimes referred to as a "crash" or a "bubble burst."

 

Typically, a bubble is created by a surge in asset prices that is driven by exuberant market behavior. During a bubble, assets typically trade at a price, or within a price range, that greatly exceeds the asset's intrinsic value (the price does not align with the fundamentals of the asset).

 

Be careful kids......

Marc

January 10, 2021

 

(530)559 1214

Investments

Commentary

Insurance     Fire specialists

Medicare 

 

 


 

Another shutdown? Update Jan 9 2021

 

We are closing the shop again!

 

Never in the decades of following economics and the markets have I witnessed such man-made damage foisted onto the world’s economies such as is occurring now. With a second complete economic shutdown now initiated in my home state of California due to spiking CoVid cases, the expected fall out on American businesses is no doubt going to be even more catastrophic.

I say man-made damage because although the CoVid virus itself is an organic culprit, the decision to shut down is one of man.

My initial forecast in March of this year was that somewhere around 25% of small businesses would be obliterated by the initial shutdowns.

This second round will certainly increase that estimate by an unknown degree. From an economic standpoint, the shutdown is unprecedented. We have never had an instance where almost all business everywhere was either severely restricted or outright shuttered completely.

The pushback from business owners is more pronounced this time around. Those business owners that have somehow survived the first prolonged shutdown now stand in disbelief as they are once again asked to close their doors and turn away much needed revenue from would-be paying customers.

The debate on whether shutdowns were the appropriate response to CoVid is increasing as more and more businesses go under. The initial shutdown was never imagined to last as long as it did, and just when the country began to reopen, giving some hope to the surviving businesses, the winter season brings once again more restrictions. Adding insult to injury, it is the Christmas season that brings many businesses the majority of their annual revenue.At this point, the debate of whether the cure is worse than the disease is being voiced by more than a few. Some argue CoVid would bring about more personal devastation in the form of death and disease should this second shutdown not be initiated. Others insist that to shut down again would cause massive personal and economic damage which will far outweigh the misery the virus would ever cause on its own.The argument is not exclusively centered around the cold reality of death versus dollars however. In an article posted in the Washington Post on Sept. 24, 2020 entitled “The pandemic pushes hundreds of millions of people toward starvation and poverty”, it states: “David Beasley, the executive director of the U.N.’s World Food Program, warned during a Sept. 18 briefing that a “wave of hunger and famine still threatens to sweep across the globe.  He said his organization needed close to $5 billion to prevent 30 million people from dying of starvation”.Adding to the argument is the fact that domestic violence (https://www.nytimes.com/2020/04/06/world/coronavirus-domestic-violence.html9), suicide (https://www.healio.com/psychiatry/journals/psycann/2020-12-50-12/%7B60567d09-854d-4092-b3fe-11d040f2c92c%7D/the-increase-in-suicide-during-the-covid-19-pandemic) and mental issues (https://www.webmd.com/lung/news/20200813/levels-of-anxiety-addiction-suicidal-thoughts-are-soaring-in-the-pandemic#1) presumed to be brought about by isolation are on the rise.With the belief by some that the new restrictions are necessary to contain the worst outbreak since CoVid’s inception, still others are questioning whether shutting down the economy has accomplished its goal of slowing the spread at all. If not, is another shutdown just one bad decision followed by yet another?Many claim the reason for the failure is not everyone followed mask and distancing mandates. Still others say mandates will never be followed by everyone, that the first shutdown was the best that could be expected and that a second shutdown is a futile attempt at a failed methodology. This will only cause thousands of more businesses to go under and bring about another round of unnecessary human suffering.If there is any good news in all of this, it is that the Pfizer vaccine has been approved and is on its way to distributions centers, with some people already getting vaccinated. It will be months however before the majority of Americans will have access to it while some say they will refuse to take it no matter what.No matter what side of the argument one believes, the fact is that the economic damage and the amount of human suffering is beyond any comparisons.That said, there may be some good news on the horizon for those thinking of starting a business. Despite the notion that the idea of hatching a new endeavor at this time seems farfetched in the face of such a stark business environment, I’ll touch on this unexpected suggestion next week.

 

Opinions expressed here are those of Mr. Cuniberti and not those of any bank or investment advisory firm. Nothing stated is meant to insure a guarantee, or to be construed as investment advice. Neither Money Management Radio (“Money Matters”) receive, control, access or monitor client funds, accounts, or portfolios. For a list of the services offered by Mr. Cuniberti, call (530)559-1214. California Insurance License #0L34249 and Medicare Agent approved.  Insurance services offered independently through Marc Cuniberti and not affiliated with any RIA firm or entity. Email: news@moneymanagementradio.com.

 

 

 

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