The Federal Reserve is the swing factor in the current market. The tug-of-war between what the Fed officials have said and what the market thinks the Fed really plans to do is ongoing and makes for a problematic investing and trading environment.
Even our favorite special situations landscape is pretty quiet. Insiders are sitting still, activists are apparently on vacation, and even pending takeovers and announced strategic reviews are fairly priced right now.
Momentum is starting to fade, so we are not enthusiastic about adding to momentum trades, and there is no way I am suggesting we put on deep-value trades after an 8% one-month move in the S&P 500.
It is a good time to avoid making new investments outside of select small banks and closed-end funds like those I discuss in my Bank Takeover Letter, The 20% Letter, and Underground Income – see below for more on that.
But at a time when it is quiet in the market and we are waiting for Fed- or earnings-related news to create new opportunities, our best use of time is probably to talk about nuclear energy.
In case you are new to the party, I am wildly bullish on the long-term future of…
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