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“Those who do not remember the past are condemned to repeat it.” — Famous investor and economist Benjamin Graham
Feeling pretty good about the stock market? Perhaps not you in particular … but investors in general don’t seem to have a care in the world.
Some of the major market indexes, like the Nasdaq, hit all-time highs last week. And there have been very few bumps in the bull market road this year. There have only been four days so far this year when the S&P 500 has moved up or down by more than 1% in a day.
That’s unusual. Since 1950, the stock market has averaged 4.25 of those 1%-plus daily moves per month. Don’t worry, be happy!
We can also measure volatility via the VIX, or the Chicago Board Options Exchange SPX Volatility Index. The COB designed the VIX to measure investor anxiety.
And the volatility index recently dropped below 10, the lowest level in more than a decade. If you’re interested in history, this was only the fourth time in history that the VIX has been so low, most recently in February 2007.
Moreover, the VIX has been stuck in low-man’s-land for an extended period on two occasions in recent history – the mid-1990s and leading up to the 2008 financial crisis.
The danger is that such extremely low levels of investor fear could signal the final stages of bull-market euphoria/exhaustion.
In general, very high VIX readings have often signaled good buying opportunities. Conversely, very low VIX readings have often signaled good selling opportunities.
That could be especially true now that officials have discontinued the primary instruments to goose asset prices and to suppress volatility — Quantitative Easing (QE) and zero interest rate policy (ZIRP).
The Federal Reserve Bank has already raised interest rates two times in recent history. And its leaders appear intent on raising interest rates up to two more times this year. Moreover, the Fed has been tightening during a time of very slow economic growth and record levels of debt.
The Atlanta Federal Reserve joined the New York Fed in lowering their forecast for Q2 GDP growth. Earlier this month, the Atlanta Fed reduced its Q2 GDP growth forecast from 4.2% to 3.6%, a 17% decrease. The problem? Lower consumer spending and lower fixed investments.
But don’t get too attached to those – or any – figures.
Consider that on May 16, the Atlanta Fed slightly raised its 3.6% growth forecast to 4.1%. Which just goes to show, the bureaucrats running the Fed get it wrong more often than right – but they are right about our very sluggish economy.
And without solid economic growth, I find it hard to get excited about the stock market. In fact, the high level of investor complacency — as measured by the VIX — has me very worried.
That doesn’t mean the stock market is going to fall off a cliff tomorrow morning. It does mean that the risk-reward tradeoff is very tilted toward the right side.
Orlando, Seattle & the Battle of the Bulge
Nothing makes me feel dumber than listening to the brilliant speakers at institutional-level investment conferences. That was especially true at John Mauldin’s Strategic Investment Conference on Orlando.
I’m not shy about stealing from the best. And I’ll soon be sharing a few of the most promising investment ideas I heard at the conference. Keep an eye out for that in the coming weeks.
In the meantime, my next stop is Seattle to visit some family — my brother, sister and two of my children — as well as visits to one of Seattle’s most-promising publicly traded companies.
Everybody knows about Seattle-based Amazon, Microsoft, and Starbucks. But there are several other rapidly growing companies that get totally ignored by the tech-obsessed, Wall Street crowd.
If you do a quick Google search for “Seattle publicly traded companies,” you will see some of the stocks that I’m talking about.
By the way, I am a frequent business traveler. And the hardest thing for me is to live a healthy lifestyle — eating right and exercising — while I’m on the road.
I am sorry to say that my expanding waistline is proof that I am losing the battle of the bulge.
Got any stay-healthy travel tips?
Best wishes,
Tony Sagami
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{ 8 comments }
Hi, Tony,
I work in a major hotel chain. It has a work-out room and a heated pool. Here’s are tips for you as you travel and work to stay on cue to better, healthy habits.
One thing to facilitate is the gym. Even if you go there and do a little, it will get you started mentally to use and understand machines and how they help your bod. BTW, you don’t have to run so fast on the running machines. How about just building up to a fast walking pace, and then just a very light jog. You can always work up to the jog part, or do some fast walking, some light jogging: trade them off. That will give you some great calorie burning.
If there is a pool, WOW, you can either swim or do some water resistance exercises. Think you won’t feel it the next day? Try it!
The first place most travelers go to is the bar. Alcohol is just loaded with sugar calories, which, if not burned up, turn to our friend called fat. If you need to relax after a long flight, how about the pool or whirlpool, if there is one. And those great snacks: pretzels, salty nuts, etc., (you know the ones I mean), get you to drink more beer and scotch.
Don’t ever underestimate the power of drinking water. Traveling can dehydrate our bodies, and we think we are hungry or thirsty. As far as food: I always travel with apples, pears, or some dried fruit. Then I make sure I have a big glass of water when I arrive at my destination. If you need a quick protein, try sunflower seeds and nuts. Some have more fat content than others, so just look on Google to see which is better suited for you.
I cut way back on my carbs a few years ago, and I feel much better, my sugar numbers are good now, and I have more energy! I limit my carb intake to very specific times, which, if you are traveling and having business meetings, you can gauge which times you might have a few carbs. If you are dining out, you might even ask for more veggies instead of having a carb. I don’t know too much about the Asian culture. I know you don’t want to insult your dining guests by NOT having something on the dinner plate. That’s why I suggested planning your carb intake for a certain time when it might be more appropriate.
Just a little understanding at a time works: kind of like investing. Start slowly, then build up your understanding, which will help you make better, healthier choices.
Glad you asked!
Stay healthy. It’s all about the intake and the outgo. I face the same battle. Here’s my strategy which, by the way, is working pretty well. I’m 72, 5’10, weight 170-173, depending on the day, no medical ailments, take no medications. Here’s the plan.
1. Weigh yourself every morning as part of getting up. That’s for accountability.
2. Be faithful about getting a substantial amount of exercise, at least 3 times per week, to burn those calories.
3. Don’t eat fried or greasy foods, or highly-refined foods. Avoid sugared drinks and alcohol like the plague. Lots of FRESH vegetables and fruits – eat all you like. I rely heavily on bananas, oranges, prunes, and berries. Choose what works for you, but do include lots of “color” in the fruits and vegetables. Forget canned foods. Lots of the nutritional value is lost in the canning process. Pastries – no! no! Too much sugar and refined flour.
4. I’d like to say it’s all about commitment, but the brain does trick us sometimes. Do allow yourself a treat every week or two. But be modest about it. I’m a sucker for home-made pies which I make myself. But they always are jam-packed with lots of fruit, and as little starch as I can get away with in the process of making the pie.
5. Do as much work around your home as you can. Get that exercise. Avoid hiring others to do what you literally could/can do yourself – exercise, both of body and mind.
Hey Tony, your a great guy on the move. We
get it…join the bulge club! The important thing
is you want a solution and reading your work,
I’m sure you will come to terms. Years ago, I
just had to get mad at me and do it. Right now,
It looks like I haven’t been mad in awhile. Ha!
Eat less.
Do isometric exercises in your seat.
Always wear compression hiose.
No alcohol.
Plenty of water like Perrier.
Walk around.
Travel First or Business class.
BRB
Drink a full glass of water 15 to 30 minutes before each meal. Aids in digestion and curbs appetite.
Meditation may be good as it helps to calm you down and reduces your cravings for food. It can be performed in the morning when you wake up or before you sleep. Half an hour is a good start. You definitely sleep better too.
Good article. Thank you.
Judging by your photo, I am older than you and can say “been there, done that”. At a point in one’s life food becomes an important pleasure. What is necessary is to find another consuming interest. Then food becomes a thing to get out of the way so you can get back into that interest. It is difficult at first, but it is a lot easier than diets and other tortures. Another way is heavy exercise. Then you can eat anything you want. An additional benefit is that you will become younger, your brain will be sharper and your outlook on life will be happier. Wishing you all the best in your quest.
Pack a lunch or eat out with people that are smarter than you and or are runway models
Cave Man diet; lost a pound a day and weight stayed off. Nuts between meals no need
to pack a lunch. No processed foods