THINKING OUT LOUD

Market Views – February 16, 2018

by Rob Zdravevski

Market Views

 

February 16, 2018

by Rob Zdravevski

 

My “Market Views” note dated February 6th, 2018, was signed off with a Rudyard Kipling quote, “keep your head when those about you are losing theirs”.

Did you know that today, the S&P 500 has risen 8% from its low seen on February 9th, 2018…………and its only 5% lower than its recent all-time high.

The S&P 500 had declined 11% between January 31st and February 9th, 2018. Corrections seldom occur so swiftly and in such a truncated time period.

Such a sharp downward move can send many indicators and sometimes your own thinking, haywire.

This is also a moment when the recent price action in certain stocks can “fake you out” of your wits.

Good investors and advisors are spending time thinking;

Is the recent activity merely a reversion to the mean before the stock resumes its previous upward trend?

Is it a meaningful move that signals a reversal in trend?

Was the decline in that particular stock price warranted?

Has the stock broken its trend and support lines?

Was the stock priced to perfection, rendering it fully or overvalued?

Is the stock currently a bargain?

or did this stock merely fall with the broad market panic?

……to list several questions we ask ourselves.

 

As I tell many people I meet, I spend most of my time thinking, reading and writing.

Sometimes, “doing nothing” is the correct thing to do and sometimes you do tweak or make changes to your portfolio.

 

Until next time,

Rob