What the Dow does today, the European markets seem to do tomorrow – it is like being on a see-saw. Up and then down, but is the down going to continue further or are we going to see the markets recover to where they were a few months ago? The graphs are starting to resemble previous occasions when we experienced major corrections.
Then again, when we get a turn up, should we believe that the worst is over? It may look like a boat, but will it float?
There is nothing but bad sentiment in the news at the moment. Donald Trump is economically “willy waving” at the Chinese, the Russians, the Europeans and anybody else that disturbs his karma. The Syrian war is escalating with the use of poison gases and over the weekend air strikes by the West. The large technology companies have seen their share prices go into reverse with further to fall as their tax havens are being assaulted. The pound is inexplicably showing signs of strengthening against the dollar, even though interest rates have been raised in America, and the U.K. is enjoying the doubtful joys of Brexit negotiations. Surely none of this can be encouraging for stock-markets; therefore would reason dictate that they have further to fall?
I should not be unhappy with this situation. On a personal basis 90% plus of my investments are now in cash with a small percentage held in property funds. A major correction would suit me perfectly; I will wait until the sharks have stopped circling and then afterwards put to sea again. This becomes just a question of patience and waiting for sufficient major investors to indicate when the market has properly turned. There is absolutely no need to be leading the way. Let somebody else volunteer for that honour first.
I am reminded of the time when aged fifteen, along with seven other stalwarts I joined the New Zealand Shipping Company’s cargo-carrying cadetship as a “first tripper”, this being the start of the first of five eight month voyages. It was January 2nd 1958 in Falmouth and it was bitterly cold. We were assembled on deck in front of the Bosun, who looked and sounded like the windjammer sailor he had been. He asked whether any of us been at sea before and like a fool my hand was up. Yes sir, I have been on deep sea trawlers fishing off Iceland. What a mistake to make. With that he shouted “come here sloppy bollocks” and he proceeded to give me the run around. It was easier for him to remember this nickname rather than the real names of the other new starters. Unfortunately the name stayed with me for the three years I was aboard. The lesson is obvious, do not be first, and do not seek attention, it is quite OK to be a follower.
An investment area that might fall outside the restrictions that I mentioned above is the boom in marijuana production. As I have previously written, when prohibition in America ended there was an enormous boom in the sales and distribution of alcohol. People like the Kennedys made their fortunes and this same money is still in trust today providing the lifestyle for the Kennedy descendants. We now have a similar situation with marijuana in America where the law is changing to make its use legal both medically and personally – there could be a similar explosion in demand as that which occurred at the end of liquor prohibition. Canada is already farming vast acreages destined for the conversion plants. Three ETF funds already exist that could be worth further examination.
• Horizons Marijuana Life Sciences Index (HMMJ)
• MG Alternative Harvest (was MJX now just MJ)
• Marijuana Opportunities Fund (MJJ)
When I first found out about these funds I could access them in my Standard Life SIPP, via a company called Stocktrade, but I know that other people have struggled with the normal fund supermarkets. If anyone else has been able to get hold of them, please let me know.
I hasten to add that I am not advocating or encouraging the use of this drug. It could however provide an interest to follow whilst the politicians and the markets continue to mess with our minds.