Episode 3 - 8/5/19

Stockcharts.com, Strike 1

https://stockcharts.com/h-sc/ui?s=spy

SPY gapped down, 2.5x normal volume, China said stopped buying ag from America, devalued yuan, reason doesn’t matter. Watch rally, 50-dma is at 292. My guess is volume will be light, close the gap.

Bottom line—3800+ days, market is old, tired, steroids of Fed and tax cuts, buybacks and earnings not working. It’s just time, stocks are going down.

Wall Street Journal, Monday, August 5, 2019, by Dan Weil

https://www.wsj.com/articles/why-arent-investors-worried-ask-howard-marks-11564970406

Howard Marks, Oaktree, billionaire, very bright, I devour every word he writes. Re: inflation “I don’t claim to understand it. Everything you’re taught says that current circumstances would dictate inflation. It isn’t what you don’t know that gets you into trouble. It’s what you know for sure that just isn’t so.”

Bottom line—Deflation is the problem. Fed and other central banks are likely losing the fight. My example—Your house is $100k, borrowed $80k=Equity is $20k. House goes to $150k, Equity is $70k. House goes to $50k, equity is -$50k. Brings down value of next house, neighborhood, etc.

Barron’s, August 5, 2019, by Jack Hough

https://www.barrons.com/articles/total-addressable-market-is-in-profits-are-out-51564775764

UBER--$5.7 TRILLION for rides, $2.8T meal delivery, $3.8T freight, $1600 for each person on Earth. “Don’t think of UBER as a company valued at $71 billion that is expected to burn through $9B over three years. Think of it is a company that so far has reached only 0.1% of its TAM.”

Barron’s, August 5, 2019, by Jack Hough

https://www.barrons.com/articles/investors-need-to-rethink-retail-amid-a-shakeout-in-stores-51564786976

“There are about 1,350 enclosed malls in the US, but only 200 to 400 are needed” Randall Konik, Jefferies analyst