Back to the future has returned, remember 2011? Why is it that our elected officials need a crisis to make an obvious decision? We are all weary of the gamesmanship that our political leaders use to obtain what is a conclusion that has only one solution. Raising the debt limit is not new. During the 90’s it was done 17 times. Obamacare reminds me of the opposition to Medicare at its beginning. You that are on it, imagine what it would be like without it. My solution to this is let it be implemented but delay the mandatory for 1 year. Why one year? It will probably take that long to fix the web site. Remember this is a governmental agency. I don’t think those who want the plan are making their decision based on some fine. All programs of this monumental undertaking have problems in the beginning so a solution to let it proceed will be the best test of success.
Now let’s leave the political theater and explore what Mr. Market is saying. We are still in a corrective environment. However, I sense it will play out over the next few days. Actually, I am welcoming this because I view this as a buying opportunity. In fact as a monitor the rebalancing this last quarter there are a long list of fairly valued opportunities in underperforming sectors that historically outperform on a seasonal basis. What I observe is fear starting to show up again so we can buy a little cheaper. Fear is a short term indicator long term with the Fed driven to the sidelines bull markets don’t end until monetary conditions weaken, and they are still powerfully bullish.
Looking back this is so much like the aftermath of 1974 to 1980. What everyone needs to do is separate politics from their investments. The public did not really come back to stocks until the 1992-1996 periods—long after the bottom. We are experiencing a time when corporations are operating at the highest profit margin, and sitting on loads of cash. There are always going to be problems. That’s how it was in 1982 to 1994 but the averages still went up. If you’re basing your investment decisions on political shenanigans your chance of success could be at risk.