'Tis Only My Opinion!

November 2016 - Volume 36, Number 11

"Disbelief, Knee-jerk reactions, Angst, Anger

 and Dow makes a new record high ..."

The election campaign between the Democratic nominee, Hillary Clinton and the Republican upstart, Donald Trump, proved to be one of the more interesting in recent memory.

This week we have kept to our motto ... Keep It Safe, Simple and Stay Focused!

Increasing  volatility

As a result, while the market saw significant volatility this week, we have been able to sleep soundly ... largely, invested in cash in our three Strategic Investing portfolios.

Meanwhile, the futures market saw violent swings in both price and volume as Donald Trump was elected the next President of the U.S. and the Republicans kept their hold on both the House of Representatives and the Senate while also picking up additional Governor seats.

On Tuesday evening, the Dow Jones futures dropped 923 points or nearly 5% as it became apparent that the Clinton coronation might not play out. We had four networks running during the evening simultaneously looking at the coverage.

It was simply amazing to watch how various pundits and commentators responded to the evening and early morning vote totals in disbelief and the knee-jerk reaction seen in the Dow futures as the evening vote results ebbed and flowed.

The following chart is of the Dow Jones Industrial Futures on Tuesday evening and into Wednesday morning as Trump went over 270 electoral votes to clinch the nomination.

The Progressive Agenda is dealt a setback!

It was a telling election and a setback for the progressive agenda as the political elites were routed and many pundits and commentators exhibited angst.

Unfortunately, many liberals found the election results unsatisfactory and began to riot in anger over the results while some on the left urged the Trump organization to "reach out to their opponents in the interest of unity."

Where was the Angst and Anger in the prior  two elections?

Eight years ago, and again four years ago, America elected a President. Fully half, give or take a couple of percent, disagreed with the outcome.

There were exactly zero riots, fires, "mass protests" and similar following that outcome despite the fact that half the population vehemently disagreed with it.

Perhaps, they did not burn down or stage riots because they had a ownership interest in their environment which many in the metropolitan areas do not.

Perhaps,  the deplorable have finally had enough!

The following chart shows that almost all of the support for the Democratic nominee came from metropolitan areas. The Republican nominee won about 80% of the counties in the U.S. Only the metropolitan centers with their large number of government workers, welfare recipients, etc., went for the Democratic nominee.

The Nano-Second Society

In a country where a 30-second sound byte is too long and social media believes that Twitter has nuances, it is little wonder that citizens living in urban areas rarely understand the concept of the "Laws of Unintended Consequences". Rather, society has become hooked on instant gratification and long-term consequences are of little concern.

Our Constitutional Republic

Apparently, many of our citizens do not understand the concept of a "constitutional republic" in which they live. Civics is a course barely taught at any level in our public school systems.

The vast majority of our voters have little knowledge of our Constitution and its amendments or the Bill of Rights. It is doubtful that even 3% of the population has even heard, let  alone read, the Federalist Papers written by Madison, Jefferson and Jay.

The Federalist Papers are commentaries on the Constitution, written during the struggle for ratification, and have been frequently cited by the Supreme Court as an authoritative contemporary interpretation of the meaning of its provisions.

At the close of the Constitutional Convention of 1787, when queried as he left Independence Hall on the final day of deliberation, Benjamin Franklin was asked:

“Well, Doctor, what have we got—a Republic or a Monarchy?”

  “A Republic, if you can keep it.”

Unfortunately, many citizens believe we live in a democracy. If the citizens are upset with the current system, there are mechanisms in place to change it. Of course, to do so requires work.

The world continues.

Dr. Stephen L. Keil was director of the National Solar Observatory from May 1999 through July 2013. Currently he is a research scientist at the National Solar Observatory. When asked about climate change, he simply said, "If the sun fails to come up, then we will have a real problem."

For eons, the world's climate has changed and sun activity, meteors striking the earth and volcanic activity are the major drivers. The effect of human activity is neglible in the long run unless we engage in all-out nuclear and/or chemical warfare.

Still as Tobin Smith, a liberal finance commentator said via his Facebook page ---

"THE sun came up TODAY and came down today ... and will tomorrow.

60 million citizens felt left out of the national conversation and for many not in control of their own destiny.

Then a person burst into their lives and talked with them and not down to them. He told them absurd lies and made insane promises but he made them feel less scared about their future in an increasingly heterogeneous America...he made them feel included in a conversation about an America that they understand and live.

He did not disdain rural and working class America. He did not call them racist or bigots for not wanting to live the liberal culture of urban America. He did not impose the moral ϲօndescension of liberal PC speak on non liberal Americans. He did not pretend that we did not have an illegal ten+ million immigrants delivering very low wage/high profit labor to well off business owners/capital owners at the expense of poorly educated American Citizens.

60 million Americans ...who felt the strong emotional indignation of being ignored by their own country like being a third wheel on a date where the others are having a great time.

Many other mid-upper class Americans could not stomach enabling the political industrial complex any longer....where cash for votes and influence can yield $350 million in tribute to one couple from Hope Arkansas. That the Clinton's are now worth $200 million without ever taking entrepreneurial risk...that is not how American capitalism is supposed to work.

I learned a lifetime of knowledge about the country I love from this awful POTUS campaign. We just had a virtual second civil war without a bullet fired.

God Bless our country and I hope those who felt left out feel more included now."

Gloom and Doom is overcome.

By the close on Friday, the Dow Jones Industrial Average had made a new record high!

Whether this is the start of another bull market leg or simply a short-term reaction to new policies which the Trump administration hopes to effect remains to be seen.

What Sectors are moving?

Group performance was widely mixed today with conglomerates (+4.4%) and basic materials (-1.8%) showing the best and worst performance today. On a weekly basis, there were more groups in positive territory with conglomerates up 10.9% while utilities were off (-3.5%) as interest rates rose this week. The daily and weekly group performance charts are shown below courtesy of finviz.com.

Closing prices of selected indices are shown below:

Despite the gains shown in the market, at the end of the week, the Strategic Investing Simple Timing Indicator remains negative for both the NASDAQ and the S&P 500.

Some consequences of the Obama years.

During the eight years of the Obama administration, median household income, when adjusted for inflation, has been completely flat and hasn't actually recovered fully since he's been in office.

The labor participation rate is near a 40-year low and has been under 63% now for 21 consecutive months.

Instead of putting people back to work, the number of Americans dependent on government is surging. A near record 45 million Americans currently receive food stamps. That is an increase of 42% since January 2009.

Since 2008, the poverty rate has shot up 17%. 46 million Americans now live in poverty, and the dream of owning your own home has been made a nightmare under Obama for many Americans. The rate of those who own a home has now dropped several percentage points.

We also saw record numbers of foreclosures during the Obama presidency. 2011 was the worst year on record for home sales.

And under Obama, our national debt has reached very dangerous levels. In January 2009, when Obama took office, it stood at $10.6 trillion. Well, it's over $19 trillion today. Obama has added more national debt than all the other Presidents combined. And that is only the stated cash deficit and does not include any of the unfunded liabilities which could total over $200 trillion by some accounting methods. Although the government won't state the discount rate used, even they agree that it is in excess of $45 trillion.

And because of this massive accumulation of debt, for the first time ever, America's credit rating was downgraded in 2011 and the IMF has reduced the percentage of U.S. Dollars in the SDR which suggests strongly that the dollar's role as the world's reserve currency is shrinking.


In a civil society, elections matter. For all those citizens who don't agree with the results, perhaps, you should look at the off-spring and accomplishments of Trumps' children before you bring out the tar and feathers.

For your candidate violated as the FBI director said many federal laws despite the FBI's inability to conduce a proper investigation that would have subpoena power and a grand jury to compel testimony.  The Justice Department refused to allow the FBI those tools.

Eight years ago, many were disappointed with the election of Obama who refused to released his birth certificate, his passport and the transcripts from the colleges he attended. Even to this day, questions persist about whether Barack Hussein Obama is a U.S. citizen.

No one knows how Trump will perform during his term. But as Obama said,

"It is in our best interests if you succeed."

I agree on this sentiment with Obama.

But then - 'Tis Only My Opinion!

Fred Richards
November 11, 2016


Corruptisima republica plurimae leges. [The more corrupt a republic, the more laws.] -- Tacitus, Annals III 27

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