How Is the Sky Falling but Not the Stock Market?

I am going to be honest with you.  I am a C student from an average Midwestern college.  I did not attend Harvard or Stanford receiving Business or Accounting degrees with minors in Economics whatever.  I am a Communications Major that ended up being a hard-working, visionist, with the ability to take risks and motivate people.  Retiring at 38 I have since been reading, reading, and reading anything financial along with a lot of listening to people smarter than myself when it comes to managing money.
All that said, for the past 12 years I have grown my wealth and have tried to understand how the economics of the World works. 

Photo by Akshay Anand on Pexels.com

My only bad investment sadly was my marriage and I lost half of everything.  But no worries, that just gives me more motivation to continue to learn and grow.

Since Trump came into office I have made more money in the financial markets than expected.  I did not vote for the man because I actually vote on principle, not my own personal interests.  For thee years I have been telling people the sky is falling, except the markets continue to go up?  I received a tax cut that I did not ask for along with other benefits the middle and lower class did not receive.  So I should be happy right?  Nope.  I am still preaching that something bad is going to happen to the stock market and back in March I thought “finally” everything adjusted itself appropriately.  But now everything is back up breaking records again?

Using this term in a couple of other blog posts, this economy is built on a House of Cards by a president that has not succeeded at much in business.  No seriously….pull up all the bankruptcies and failed business attempts along with countless lawsuits that basically protects one person, himself.  Everyone else gets screwed.  I have been determined not to be that screwed person.

So for example, when I see Boeing (along with other stocks) going up multiple points daily I have to ask myself how?  High unemployment combined with a Pandemic in which no one is flying.  Airlines are going into bankruptcy and planes are parked all over the place sitting idle.  They have not sold a plane forever and everyone seems to forget that they still have a billion-dollar project called the 737 Max that is a disaster.  So why is it going up?  Even if travel picks up, airlines are going to use what they have or buy other bankrupt airlines planes before ordering new planes.  Yes, I understand that there are only two plane manufacturers in the World…but China is going to make a third one soon.  So how is it happening?  Speculation is the word and that is a dangerous game to play.

In the last economic downfall, I bought Boeing at $83 and sold it at $330 when they could not figure out the 737 Max, and I rarely sell.  Recently Warren Buffett, the king of investing and patience, recently got out of investing in airlines completely.  People were thinking this is a major move for a non-sexy investor.  When Trump says “Buffett was wrong to get out of airlines” I know that another card is being added to the top of this house.  

If you read daily all the different financial articles and I mean daily.  You will get a picture of what people are thinking and for the last several months, including today, these incredibly smart and trained financial people are sounding an alarm that something is not right about this market.  When I talk to people that manage some of my money, I am hearing the same alarms.

Basically, be careful and don’t go throwing your money into a market that is overvalued.  Patience is key and you need to wait, read, wait some more, and then make a decision about investing.  Investing in stocks is like gambling except with a lot more information.  The key is to read all the information before placing your bets. 

p.s. – Pay for Apple News and you will get all the information you need daily. 

CarterW.

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