It has been a bumpy week for stocks, and it could get worse if you believe the headlines of the financial press. The issue I see is that just about everyone is expecting a nasty period ahead for equities. That makes me somewhat bullish. Calling short-term market moves in this environment is akin to fortune-telling. It is short on analysis, and long on my gut feelings. Granted, I too, have been warning folks that the September-October 2021 time period has been a seasonally difficult time for equities. My column last week addressed the possibility of a 5-10% correction, and what…
Insights & Advice
Bill Schmick
Moderates winning on tax debate
For months, wealthy U.S. taxpayers and corporations have been living with the specter of higher taxes under the Biden administration. It is a pretty good bet that taxes will go up, but not as much as you might expect. Throughout the week, Democrats in the House and the Senate have been horse-trading over the amount of spending, versus the amount of taxes, necessary to pay for President Biden’s $2.3 trillion budget plan. Republicans are already on record that they will oppose any new tax hikes at all. Since the Democrats hold such a slim majority in both the House and…
Some brokers are getting bearish
For four days in a row, the markets closed down. That is in itself unusual. It has only happened four other times since the March 2020 low. Does this portend further downside in September 2021? On Friday, the markets bounced back. The damage to the averages has been minimal thus far. But given how far we have come, more and more brokerage houses (Goldman Sachs, Deutsche Bank, and Morgan Stanley, among others) are warning that the September-through-October 2021 time frame could see a 10% correction. How much weight should you give these gloomy predictions? If you are a short-term day,…
Japan is worth a look
It has been 30 years since the Nikkei 225 last touched the 30,000 level. However, many investors look beyond this island nation and focus instead on its Chinese neighbor. That may prove to be a mistake. To some investors, it is the epitome of value investing. Warren Buffet’s Berkshire Hathaway made some sizable bets on several Japanese trading companies last year. Japan’s stock market is cheap compared to many other markets. But deservedly so, say the bears, since investors have had to put up with years of sluggish growth and perennial deflation. Japan is home to many well-known companies (think…