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R-E-L-A-X (For Now, Anyway)

Sep. 04, 2020 3:19 PM ET1 Comment
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  • This note was sent to subscribers yesterday.
  • I hope this perspective kept many from panicking this morning.
  • There is still plenty of time today to readjust portfolios.

Sep. 03, 2020 7:02 PM ET

Yes, the markets fell today.

You didn't really except them to continue zooming up indefinitely, did you?

Tomorrow will give us a much better idea if this was a flash in the pan or something to be truly concerned about.

Today... The S&P 500 was down 3.5%, the Dow 30 was down 2.8% and the Nasdaq, which has made so much money for us in that portion of our portfolios, was down 5%.

Some of our Investors Edge portfolio positions were stopped, mostly at a profit, albeit not as much as if we had happened to sell yesterday. Some, which did decline even 3%, let alone 5%, are untouched.

Stop losses are still in place, though i have expanded them a little, in case tomorrow follows today at first but then rises shortly after the open.

While you cannot set your watch by it, the Fridays before 3-day weekends "tend" to be flat or up. That doesn't mean tomorrow has to follow that "tend"ency.

I see no reason to panic. Here is what happens when people panic: CIENA (CIEN) was one of the pecentage-down leaders today.  Why?  Ciena declared their revenues and earnings this morning and beat estimates on both earnings and revenues, both of which improved smartly.

You might think that would send the stock up, not down.

However.. "although Covid-related market dynamics have resulted in an orders slowdown and are likely to adversely impact our revenue for a few quarters, we are confident in our ability to continue executing on our strategy and expanding our market leadership," said CEO Gary Smith. That was enough to set off a fire sale.

Blaming Covid-19 now is a bit sophomoric -- by now we should have learned to deal with it. Still, it was not bad enough news to send this fast-growing essential tech company down so much. I believe it will rebound, as will the markets themselves. 

As Scarlett O'Hara said, "tomorrow is another day." I approach it with caution but equanimity. You are well-diversified and have some good defensive positions. I believe you should approach it the same way.

Safe and sane investing, Joe    

Additional disclosure: unless you are a client of Stanford Wealth Management, I do not know your personal financial situation. Therefore, I offer my opinions above for your due diligence and not as advice to buy or sell specific securities.

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