Stocks Tumble As Legendary Investors Grab Headlines

Friends

Some legendary investors grabbed the headlines today. Bill Ackman tweeted this morning and then appeared on CNBC at lunchtime begging the President to shut down the country for 30 days. He’s concerned that governments just aren’t doing enough. Interestingly, even though he sounded the alarm, and was is extremely concerned, he is and has been buying, believing that we will make the right moves. Another legendary fund manager Bill Miller also indicated on CNBC that he believed that this a tremendous buying opportunity.

I’ve personally been through every calamity since the 1987 crash. Obviously, each downturn ended up being a great buying opportunity, but believe me during each one of those bear markets my stress levels were put to the ultimate test.  I’m quite sure that this one will also end up being a tremendous buying opportunity. Is it going to be as good a buying opportunity as March of 2003 or March of 2009, where we were down more than 50%? We will see.

As for today, with the absence of any good medical news, stocks once again came under pressure. Once again, it appeared to be a forced selling situation with stocks, bonds and gold all going down at once. For the day, the Dow Jones Industrial Average was down 1,334 to close at 19,902. The S&P 500 was down 131 points to finish the day at 2,398. Gold was down $32 to trade at $1,493 per ounce, while oil was just demolished- down $4.82 to trade at $22.13 per barrel WTI.

So much of this downturn looks like forced liquidation. If the Fed can get the bond market under control, maybe things will settle down just a bit. I don’t think investors are saying that great American companies are necessarily worth 30%-50% less than they were a month ago. Likely, much of this selling is unwinding levered situations. Anyway, we live to fight another day. I went to HEB at lunchtime today, and I felt like a Navy Seal on a harrowing mission. I kept my distance from everyone. We’ll talk tomorrow.

Try to have a nice evening everyone.

Jim

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