So the Dow Jones fell in yesterday’s session by 0.1%, hardly newsworthy you would have thought except that had its stocks performed 0.2% better, we would have seen a record 13 days straight of successive gains.
This would have overtaken the previous record which was equalled on Monday. The first time we had seen 12 successive positive days trading since January 1987
So, the raw data
Dow Jones +4.7% +5.2%
Nasdaq +3.7% +8.0%
FTSE +2.2% -0.6%
Nikkei -0.2% -0.8%
SSE (Shanghai) +2.6% +4.4%
And with the currencies we saw the following movements versus the US Dollar:
So what does all of this tell us about the market we are in? Should we sell after this record equalling rally? Is this all about the new President and the “Trumpenomics” as it has been phrased.
As ever no one ever got hurt making a profit and when looking at some of the 12 month returns on a selection of my favourite companies, Caterpillar (+46%), Amazon (+52%) ,Apple (+41%) Facebook (+26%) no one could have blamed you (or me!) had you only made 75% of those gains. After all most clients are happy with a 30 % return. Trying to pick the very top and be too greedy can be dangerous.
Yes the Trump factor has made a difference, his policies around deregulation and taxes were always going to be viewed favourably on Wall Street, but you have to look further than that and into the companies themselves, their businesses and their products.
The great Warren Buffet had his annual discussion with the crew on CNBC on Monday. 86 years young and a man who is simply the greatest investor of all time has never changed his philosophies, buy companies with good products / good businesses.
He has increased his stake in Apple to USD18 billion, and why, a major reason being the Iphone is a good product, the more Apple sell the more the company grows. Sounds simple but clearly effective.
Warren spoke of avoiding retail because of the Amazon effect. The company now offer same day delivery throughout most of the US, again who wouldn’t want that, a great product / service.
Despite being in the “Tech” sector, these companies are more about consumer products than technology. Their growth has been phenomenal and this will continue, not least due to the demand in emerging economies. It doesn’t matter where you come from, if something is good you want it and will probably pay for it….