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Higgins Capital Management, Inc.

Back in the Saddle and Back up in Equities

The Economy: We're back in the saddle after a great holiday. The more things change … .We appear to have a 2-speed global economy. The US continues to post stellar numbers; the latest being the blow-out Jobs Report. The rest of the planet appears to be slowing with Europe now following China. Sometimes this bifurcated growth is problematic; sometimes not. Whether this is reflected in financial markets is up to speculation. Earnings season is set to start and we'll see how those numbers look. January is usually an optimistic month and that seems to be the case thus far. The issues that dominated in 2018 are still there; just in the background as geopolitics grabs the headlines. As we've said many time before: Watch the Fed and interest rates. Some think that the Trump charm has cowed Jerome Powell. Financial markets have responded to Powell's apparently new-found dovishness with a 10% rally off the December lows. Whether this is a bear market head-fake or something more sustainable is the big question. Have a plan. Have an exit strategy.


Food for Thought: Fools rush in … . We're increasingly cautious as we go forward. If you are in your 40's you probably have some room for error … another fortune lost. If you are in your 50's you may have one more chance to recover from disaster. Older than 50's you're on thin ice without getting into speculative or even hi-risk territory.  At the lows of the recent stock market selloff investors began to talk about algo-driven ETFs that were outperforming. The recent bounce has crushed many of these programs. We're reminded that if it looks like a duck, sounds like a duck … probably is. The current investing environment looks like The Bear to us. Whether it's a massive short squeeze, a MoMo/Hedgie run or a Plunge Protection Team manipulation is irrelevant. It's a bounce and an opportunity to exit positions you wish you'd gotten out of last September. We'd reef down in this weather and be very, very cautious. Live to play again another day. Contact us if we can help you or your friends.