If you recall, the investor class was worried about a whole bunch of things, especially inflation and the dreaded rising 10-year bond yield. On both those fronts, economic data didn’t necessarily cooperate as the CPI and PPI came in hotter than expected. Bond yields shot up a touch, and stocks sold off to start trading sessions early in the week. Low and behold, after the initial drop, equities firmed up and finished the week with a nice bounce. In fact, stocks remain a touch lower than their all time highs. What gives? Well, earnings reports from heavyweights like Cisco Systems Inc (NASDAQ:CSCO), PepsiCo Inc (NASDAQ:PEP), Under Armour Inc C (NYSE:UA), and Coca-Cola Company(NYSE:KO) (NYSE:KO) were strong, and increased dividends and buybacks are balm to soothe frayed nerves. Supplementing the succor of strong financials was the drying up of forced selling from misplaced bets on volatility and gosh knows what else. Applying Mrs. Stowe’s wise words to any endeavor is probably good advice, but especially so with financial assets. Sentiment changes not only daily, but these days, hourly, minute, or even second. The pesky algo’s can be triggered by any metric imaginable. As a result, thousand point drops over a ten minute time frame are not impossible, but increasingly, should be anticipated. However, if one focuses on the quality of your holdings, the operational performance, and extending your time horizon, accepting these fluctuations and trying to selectively benefit from them seems like a reasonable course of action. As Scarlett O’ Hara famously once said, ‘Tomorrow is another day.’
Elsewhere, a small company called the Daily Journal (NASDAQ:DJCO) held it’s annual meeting this week, and investors pay particular attention to it each year because of one man, that being Charlie Munger. Groupies, as Mr. Munger calls them, from all over the world come to hear Munger opine on all kinds of subjects. One of them was the topic of Wells Fargo (NYSE:WFC). Buffett’s partner believes the regulators should leave Wells alone as they have been through the ringer. Respectfully, I would disagree. Wells, rhymes with smells for a reason, has over ten percent of all U.S. banking deposits and deserves ongoing scrutiny for its operational shortcomings. No reason to let them off the hook any time soon. Other than that, Munger is always worth a watch, and you might take a look Daily Journal 2018 Annual Meeting-
Yale Bock, Y H & C Investments, its clients, and the family of Yale Bock have positions in the securities mentioned in the blog, Investing in securities involves risk and the potential loss of ones principal. Past performance is no guarantee of future results. All investment decisions should be considered with respect to ones risk tolerance, return objectives, liquidity needs, tax considerations, and one's overall financial situation. The fact that Yale Bock has earned the right to use the Chartered Financial Analyst in no way means or guarantees financial returns which exceed those of a market index.