USIR Weekly Update Hotline
For Monday, November
The Rally That Wont Quit
glad we didnt sour on Apple. Sellers dumped AAPL from 164 to
150 in September, and from 160 to 155 in October. But just as we posted our
Oct. 31 hotline, it suddenly shot to 169 on super quarterly earnings and good
news about the launch of its iPhone X. Today it closed today above 174. Not a
bad ride from 55 four years ago!
Indeed, the whole market rallies
on to new highs, more puzzlingly. One can view this as eight-year rally from
its March 2009 financial crisis bottom. But surely its 2017 gains have little
to do with a president who never before governed anything and whose approval
ratings are rock-bottom. Investors normally hate uncertainty. So why, amid the
turmoil Trump has created, wont this rally quit? Beats me. Maybe its time to
retire my crystal ball.
This I do know: What sparks sustainable
rallies are plain old-fashioned investment fundamentals, such as corporate
earnings, economic growth, investor confidence. Today,
we do have mostly rising earnings. And weve long had accelerating economic
growth, well before the 2016 election. Thats evidently prompted investors to
keep pushing stocks to new highs.
Long experience taught me not to
argue with mob psychology. Best just hold a handful or two of super strong growth
stocks and enjoy the ride, including Apple and the other Best Strong Buys featured
in todays scaled back USIR.
And with, as we always add,
firm stops in place, a familiar proviso that might well be a fitting epitaph
W. Quickel, Editor