Actionable insights straight to your inbox

Equities logo

Leave the Last Waves of the Summer for Someone Else…

Labor Day just passed, and that means Summer is almost over. Despite a little pullback amid some scary geo-political news, the S&P 500 is at an all-time high. There is even a drop of
Jordan Kimmel is a Portfolio Manager for Gitterman Wealth Management. Phone: 848-248-4290Email: [email protected] With over 30 years of experience in the financial services industry, both as a retail broker and fund / portfolio manager, Jordan is the creator of the FACTS® Stock Selection Process, which employs a unique holistic and quantitative analysis on the integrity and sustainability of over 2,000 US companies. Jordan’s FACTS® method identifies organizations with: Financial Strength Accounting Conservativeness Corporate Integrity Transparency Sustainability / ESG (Environmental, Social, and Governance) Metrics FACTS® analyzes the largest and most liquid companies, and also incorporates Jordan’s Magnet® Investment Strategy, one of the first strategies of its kind to combine the best tenets of value, growth, and momentum of company fundamentals. Magnet® has been licensed to several leading institutions around the country, and Jordan appears frequently on several major financial TV networks, including CNBC, Fox Business, Bloomberg, and ABC News, among others. He has also been quoted extensively in several publications, including Forbes, The Wall Street Journal, and U.S. News & World Report. He is the author of two books, the most recent being “The Magnet Method of Investing.” (Wiley, 2009).
Jordan Kimmel is a Portfolio Manager for Gitterman Wealth Management. Phone: 848-248-4290Email: [email protected] With over 30 years of experience in the financial services industry, both as a retail broker and fund / portfolio manager, Jordan is the creator of the FACTS® Stock Selection Process, which employs a unique holistic and quantitative analysis on the integrity and sustainability of over 2,000 US companies. Jordan’s FACTS® method identifies organizations with: Financial Strength Accounting Conservativeness Corporate Integrity Transparency Sustainability / ESG (Environmental, Social, and Governance) Metrics FACTS® analyzes the largest and most liquid companies, and also incorporates Jordan’s Magnet® Investment Strategy, one of the first strategies of its kind to combine the best tenets of value, growth, and momentum of company fundamentals. Magnet® has been licensed to several leading institutions around the country, and Jordan appears frequently on several major financial TV networks, including CNBC, Fox Business, Bloomberg, and ABC News, among others. He has also been quoted extensively in several publications, including Forbes, The Wall Street Journal, and U.S. News & World Report. He is the author of two books, the most recent being “The Magnet Method of Investing.” (Wiley, 2009).

Labor Day just passed, and that means Summer is almost over. Despite a little pullback amid some scary geo-political news, the S&P 500 is at an all-time high. There is even a drop of excitement as the NASDAQ is not all that far from its highs set some 14 years ago! From the bottom of the bear market depths in March 2009, I have been one of the most consistent bullish strategists on Wall Street. That is, up until recently. Now I am suggesting to leave the last wave of the summer for someone else!

A few weeks ago I wrote a short article suggesting the (stock market) tide was about to go out. All we have seen since then is a straight up move to the new highs. Kind of embarrassing for me. Even the advance /decline line has improved, suggesting less of a reason for caution. However, I cannot ignore the warning signals I am getting that suggests a sharp violent pullback is lurking around the corner.

There is an old Wall Street adage about “not drinking the last cup of the punchbowl.” That is, don’t be the last one to leave the party, or look for a seat before the music stops. When skiing, how many times does an injury that place on the “last run of the day”?

While there is a lot of talk that we have not seen a 10% correction for a long time, it does not mean one is coming. There is something bigger, and very positive coming around the corner that I want to be ready for. The mid-term election cycle begins this Fall and it tends to be the most bullish period of all in the four-year presidential cycle. My guess is that we have a big shakeout in September which will send investors to the sidelines just prior to the best time to be in the market.

I am sitting basically “market neutral” at this point. I have a few positions in the highest ranked Magnet® stocks, as well as several short positions in the worst ranked companies. The risk/reward does not feel as favorable as I’d like to be very long at this time. (Several of my longs are micro-caps too small to mention here.) I still want a little more time at the beach, but I am not too keen on riding the last waves of the summer.

Longs- Rambus Inc. (RMBS)  and some companies too small to mention.

Shorts- AdvisorShares Ranger Equity Bear ETF (HDGE) , Direxion Daily Small Cap Bear 3X ETF (TZA) , NetSuite Inc. (N) , Teck Resources Limited (TCK)

By Jordan Kimmel, Chief Investment Officer at Investview, Inc. (INVU). 

AT&T, T-Mobile and Verizon should be turning the volume up. Their current quiet murmur is just not enough.