Long ago, I saw a college performance of the play “Stop the World I Want to Get Off.”
The main character throughout the play would yell, “Stop the world, I want to get off” as an aside to the audience.
Simply speaking, he wanted to, well … stop the world and get off.
This has been quite a zany year — a lot of ups and downs in 2018, to say the least. Sometimes we just want to unplug and decompress from everything.
But, unlike the play, we cannot just stop the world and get off.
We are still in what is considered the second longest running bull market in our history. If you have not incurred positive return from your investments over the last nine or 10 years, you need to ask yourself why.
The market is showing signs of aging. Are we on our way to a recession? Is there more correction to be expected from the market?
I have no idea other than to say that yes, sooner or later, we will have another recession. But no one knows when.
Here are some of the negatives being thrown around concerning the stock market:
▪ The fiscal stimulus from the tax cut is behind us. Combine this with tighter monetary policy and this loss of stimulus could hurt our economy.
▪ Tariffs have been rising and business sentiment has been depressed by the possibility of trade wars.
▪ Global economic growth has been slowing. Many stock markets around the world are in bear markets.
▪ Our domestic housing market has weakened, causing homebuilder stocks to plummet.
▪ Corporate debt levels are high, which will create new vulnerabilities.
▪ Last, yet certainly not least — corporate earnings growth is slowing. That could be a big blow to the markets if it disappoints the analyst and rumbles the stock market.
But before you yell “Stop the world, I want to get off,” I want to end my final column of the year on a positive note.
And there are many positives:
▪ Oil production in our country is booming. Texas is expected to pump more oil than Iraq in 2019. Weekly oil exports have soared. Energy independence is almost here and with it all of the positive changes that may accompany it.
▪ Carbon emissions are much talked about but few realize that the United States leads the world in the reduction of C02. Electricity generation has remained steady since the early 2000’s, while CO2 emissions have fallen sharply.
▪ U.S. manufacturing output continues to strengthen, while the output per employee has increased dramatically. Our share of global GDP is 24.6 percent — a large percentage. China is about 14.8 percent of global GDP, far behind the United States.
▪ Not only is our country blessed with many natural resources such as oil and gas, but our Great Lakes contain about 21 percent of the world’s fresh water supply. We are truly fortunate to live in such a bountiful country.
▪ U.S. mortality from all types of cancer, with a few exceptions, continues to fall dramatically since the late 1980’s. Stomach cancer, for instance, has fallen from a high of 30 people per 100,000 in 1950 to under 3 per 100,000 today. Colon cancer has fallen from the mid-1970’s high of approximately 100 per 100,000 of population to around 50 in 2015 per 100,000.
We are all familiar with artificial intelligence (AI) and self-driving smart cars. Xenotransplantation is maybe not so familiar. But it is very exciting. It is the transplanting of organs from one species to another.
Today, many transplant organs come from someone who has died, often via car accidents. Still, we are far short of donors to meet the ever-increasing needs of a society whose citizens live long and healthier than ever before.
With smart cars, theoretically there will be fewer automobile deaths and thus fewer donors. Xenotransplantation has the same issue with organ rejection as does within species transplants, but new developments may enable us to grow compatible organs with no need for a lifetime of anti-rejection drugs. We are close.
There will continue to be tremendous opportunities for investors in the future. It’s an exciting time to be alive. Focus on the good news. Invest long term. Turn off the negative.
And remember, always stay invested.
I would like to wish all of my readers a healthy and happy holiday season and a prosperous and healthy 2019.