06-22-2020: Back Up the Truck... or Quit Beating a Dead Horse... or Both

With today's thought police (can we still use the term, "police"? Hope so...) in full force, I might run afoul using the term, "Beating a Dead Horse". But, with some reasonable fear and trepidation, I hope that in the few hours we have left before we lose freedom of thought, along with freedom of speech, I will use the phrase; nothing disparaging meant toward any horse (living or dead) or horse lovers or our ancient ancestors who rode horses. Doubt that covers all the bases, but I tried...

Astute observers of the worrisome economic conditions that seem to abound around us and the Damocles Sword of the COVID-19 reemergence dangling just above our mortal lives, might come to wonder, "Why the heck did the market go up (again) today?"

Now... for the dead horse part...

I have postulated (that's the more eloquent term I use instead of "WAG'd") for weeks (by the way, if you don't know what "WAG" stands for, good for you!) that there is a floor in this current stock market. I have even named the floor. It is the floor of unlimited sugar and is controlled by the Sugar King, "Treasury Secretary Mnuchin". Granted, this is 100% speculation on my part, but the pieces seem to all fit together. Trump says "Don't let the economy collapse." Mnuchin says, "I have an unlimited supply of paper and ink." The Fed says, "We need more (many more) trillions of dollars to bail out any company that has a pulse of any kind." Mnuchin says, "Back up the truck!" Congress says, "Put more sugar into the hands of those who want it and even some who need it." Mnuchin says, "Back up the truck!" 'Somebody' says, "We can't let the stock market collapse!" Mnuchins says... well... you get my point.

And just to beat a dead horse a bit longer, IMHO, as long as there is a floor in this market, buying on any dip (even serious ones) has some merit... assuming, of course, you clearly acknowledge all of these opinions are based on nothing but pure speculation.

This is one (yes, there are others) reason why I have my portfolio models almost 100% invested. And since I know without a shadow of doubt, that this speculation could be 100% wrong, I keep stop loss settings as tight as possible and I am updating them at least daily... sometimes more often.

So... for this week, my investment bias is "Buy-but-Beware". One of these days, Mnuchin will pull the plug on the wide open spigot of free money. When that day occurs, the market will have to go back to speculating on what the economy will do in the future, and not how many trucks are backed up to the Treasury on any given day. If the economy has not gotten completely back on its feet (and it is a long way from there right now) by the time that Mnuchin pulls the plug or if by chance the other party comes to power and drop-kicks Mnuchin to the curb, it will be just about the right time to load up on inverse ETFs where we can back up the truck.

Today was a spectacularly good day for our client portfolios. They trounced the market for the most part. Even the most die-hard Monday-Morning Quarterback had to nod in appreciation when the dust settled today. I hope you had a great day in the market, too!

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Turner Capital

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