Good Moves and Trump

February 11th 2016. Second Post. I wish The Donald would listen to two people, maybe three. One is Arthur Laffer on the economy; John Bolton of Foreign affairs (and military actions), and well, me. I’d love to write his speeches, and I would do so for free.

Follow this reasoning about the market, news and what we can do about it. You’ll see my would-be speeches hidden within these words.

  1. We need a tax rate of 10%. Yes, eliminate most loopholes, but get the rate down. The economy would boom. And speaking of boom—if you really want to see this economy boom and be the envy of the world—eliminate capital gain taxes. And while you’re at it get rid of all death taxes, especially on estates built with small businesses and farms.
  2. There are three characteristics which form our view of things.
  3. Earnings: Today, earnings are up for so many companies. These get drowned in negative commentary. Sketchers (SKX) had great earnings. There are many more. Our economy is slow, but will get better, especially when we get these statists out of the White House.
  4. Multipliers: The earnings multiple of the market is going from 17 times earnings to 15 times earnings. This is put out there as bad. Au Contraire Mon Ami. The market P/E should be watched for buying opportunities. Focus on value. A low P/E is good, better, best.
  5. Dividends: There are many companies paying wonderful dividends. The yields are high right now. Just google dividends and you’ll find a treasure chest of great American companies paying dividends way above bank rates.
  6. The Fed is wrong. They should just get out of the way.
  7. Donald Trump was to be interviewed on Stuart Varney (FBN) and before this happened other commentators were suggesting questions for Stuart to ask him. Most centered on getting him to answer specific policies he’d use to fix this or that. For example, a few of these people were on before the market opened, and the sell-off was coming. They wanted to know what the Donald would do about it. I was hoping Mr. Trump would say. “NOTHING. The government has no role in this. We don’t need to look to me or any government actions to fix this. We need to get government out of the way.” Or he could say, “My job is to reduce government influence, the first is reducing taxes. We—and I emphasize “WE” will fix America. Not me, but all of us together. Americans will fix America—and the rest of the world while we’re at it.”
  8. Yes, the world needs what we have. And FREEDOM is the most important product (export) we have. Free Enterprise is the answer to our economic woes, not more regulations, programs and stifling policies.
  9. Debt is the killer of businesses. Find companies will low or no debt, good management and a lot of growth potential—both here and abroad. Consider Nike, Visa, Sketchers, Netflix, Microsoft, GILD, Google, Disney and of course Apple.
  10. Also, note it is times like this (The Dow under 16,000 comparatively speaking) that many fortunes are built. The tough get going.
Stock MarketWade Cook