August 21, 2020

Growth is slowing again, mainly due to non-maskers and covid-19 spikes. This dooms Pres. Trumps chances of re-election. Get ready for a well-meaning liberal President Biden who will enact policies that will produce exactly the opposite effects intended. We must accept the fact that we will never have a president that understands markets or economics and therefore will never enact policies that actually achieve their goals. For example, you might remember Obama’s aim to increase government hiring, wages for the poor, and reduce income inequality. To do so he raised the minimum wage at the trough of the Great Recession and reduced the rate of hiring as a result. He then went on to over-regulate business so as to destroy worker demand and reduce economic growth so that it would be below the full employment real GDP trend line throughout his administration. Naturally, the tax base didn’t generate revenue for State governments to hire and they didn’t. Moreover, the wealth gap increased due to the Fed having to constantly keep interest rates and the return on poor people’s savings near zero. At the same time the low interest rates and extra money went into stocks owned by the wealthy. Get ready for this to happen all over again. We will have more problems, not fewer . . . except maybe for the fact that Biden, unlike Trump, can speak in complete sentences.

Okay, so here are the stocks you might want to short: JOBS, BXP, BRX, CWT, HTHT, and CME. For going long (i.e., looking for growth): OSB, COWN, UCTT, HOME, MUSA, AU, AAWN. For Dividends and growth: CODI, RIO, SPH, JHG, LAZ, MCY, ABR, CEO, EFC, AGNC. The best funds over the last 3 months have been: XSMO, QQQ, IWY, MGK, VUG but I would wait until stocks pull back some in the near term before buying into them. Good investing!