Market Update September 17, 2018
Good afternoon. This is James Cordier of OptionSellers.com with a market update for September 17th. As we approach October this year, I'd like to discuss contrarian views. Certainly, this form of investing takes the largest intestinal fortitude of any type of investing. Going long a market that continues to rally is quite easy, selling a market that continually is falling is just as easy. Can you imagine ten years ago, as we come on the ten-year anniversary of the absolute collapse in the U.S. economy and the banking system, who in the world was buying stocks then? Certainly, the contrarian view that absolutely did extremely well. Here we are ten years later and now we can say just the absolute opposite of the stock market and the U.S. economy. The U.S. economy seemed to be doing just absolutely fantastic. The stock market is inching up towards a new record high practically every day and now who is taking the contrarian view, who is now selling ten years later? It'll be very interesting to see how that shapes out over the next 2-3 years because quite possibly, being contrarian right now is a really good idea.
In 2017, at OptionSellers.com, we took a contrarian view that the dollar would no longer just continue to fall and that the gold market wasn't going to continue to rally. We did extremely well being contrarians in 2017, which also led into the very first quarter of this year being quite good as well. Now, we have a very strong dollar, we have the economy going to the moon, and now is the time to take a contrarian view on commodities. Commodities have been beaten down tremendously with the idea of tariffs on China and throughout Europe and Canada and Mexico. The price of silver is down to levels that we haven't seen in years; however, you see the price of gold and oil and other commodities at extremely high levels, relative to inflationary ideas.
We are now taking a contrarian view that the dollar is not going to continue going up, the stock market's not going to continue rallying every day, and that some of the commodities that have been beaten down are going to start doing well and possibly extremely well later this year and maybe through 2019. For those of you who are relatively new with your account with us and did not get to enjoy the contrarian view that we made in 2017, the only thing I can say is that cycles take long. This type of investment that we have is not based on one month or one quarter and in some cases not even one year, it's a cycle of events that take place and by selling options with a long-term view it is a long-term investment, sometimes 3-5 years is a very good barometer; that is what I like discussing with my clients and that's what I think we'll be seeing over the next several years - contrarian views doing quite well. Every time we put on a position we're not considering well what is everyone thinking and we're going to do the opposite, but from time to time that does line up and that is what we're doing right now, we'll just have to wait and see how it goes. I think the fourth quarter of this year and the very first half and three quarters of 2019 are going to do quite well, time will tell.
As always, it's great chatting with you and looking forward to doing so again in 2 weeks. Thank you.