Saturday, January 09, 2016

Market Tuition

During a year end Skype chat with some market participants I have known for a long time, I expressed my bullishness about the coming year.  <ahem>

Right on cue, global equity markets pummeled my view by dropping like a lead balloon. You name it, we got it. A crash in the Chinese market, lower and lower oil prices, weak economic reports, gloom and doom from Apple's supply chain, and a super-sized serving of financial media/pundit pessimism.

Yeah, I know things.....

By no stretch of the imagination do I believe the world is ending. I realize the *issues* in the global economy and the financial markets are not going away overnight.  In the 30+ years I have been following capital markets I can't tell you how many times the world was about to end. One thing I do know is that every single one of those periods provided the opportunistic investor with a chance to purchase some outstanding bargains.

Patience is key.....  

Earnings season is upon us and the preliminary indications suggest tough sledding in the semiconductor food chain.  During the past week the focus was on the business at Apple. Suppliers Qorvo (QRVO) and Cirrus Logic (CRUS) lowered their numbers. Samsung chipped in with tepid earnings guidance and Hon Hai Precision saw December sales drop 20%. TSMC's December sales were down 16% year-over-year and 8% vs. November sales.

I could go on but you get the drift. Taking just these few into consideration is enough to give one pause. Weakness appears widespread and no one wants to own a company that is about to release a crappy report.  These next few weeks will be telling.

From a strategy perspective my top priority is to check my ego at the door and really focus on what the tape is saying. Opportunities are going to appear - it is not a matter of if, but when.  

From a non-market perspective I am on a quest to do more research on disruptive technologies. It really feels like we have reached a tipping point where years of R&D in the tiny-science field will soon touch a market near you.  More to be said about this in future missives.  

1 comment:

  1. Anonymous5:59 PM

    Let me be the first to welcome you back. Todays world is full of useless commentary, price targets, and other opinions that should be glossed over. The market is the final dictator, commander-in-chief. "Know thyself" and you will much better off. Unbiased writing without an agenda is difficult to find.