The financial market turned heads yesterday with the Dow hitting 21,000 and beyond for the first time.
Without a doubt, this is due to President Trump's speech before congress.
It was little over a month ago that the Dow topped the 20000 barrier for the first time.
Now we find people jumping on the craze with everything from Dow 21000 t-shirts to hats.
Available on Amazon here: https://www.amazon.com/Dow-21000-Financial-Market-T-shirt/dp/B06XD3NL7D
Although, the speech as a whole was positive it provided little substance as to how everything will be accomplished.
It doesn't take much news during these times to polarize the nation as for or against whatever is being said, whether fact or fiction.
What is fact though is Politics has forever been changed during this last election. Oprah is even considering a 2020 bid now as she realizes you don't need governmental or political experience to run and win.
Available on Amazon here: https://www.amazon.com/Dow-21000-Financial-Market-T-shirt/dp/B06XN6CGKT
Remembering 1987:
It's hard for many of us to remember the days of 1987 and Black Monday.
I was a Finance Manager for a multi ticket auto dealership in the Midwest at that time. Most of us here were following the then current issue of Iran shooting missiles and hitting ships in the Persian Gulf. Little did we know what effect that would lead to next in the grand scheme of things with the market.
Available on Amazon here: https://www.amazon.com/20000-Financial-Market-T-shirt-Large/dp/B01NHA5HDD
See, 1987 had started out as a great year for the market as the Dow had gained 44% in seven months. At the dealership, we were selling high end domestic and import models at a record clip. The normal consensus of our buyers seemed to be that the market would continue to go up and their investments were safe. Many of the brokers were riding this wave and drinking the Kool-Aid too. These were the same guys advising me to even buy on margin as I couldn't lose in this cycle.
What a great thought to buy stock with 50% down in the account. This reminded me of gambling on college and pro football games on the weekend through the book but totally legal.
Available at Amazon here: https://www.amazon.com/Market-History-Making-T-shirt-Medium/dp/B01N14QAOT
As an F&I Manager (Finance and Insurance Manager), my job was to squeeze every last dime from a sale via the backend. Aftermarket items, warranties, Credit Life and A & H Insurance. Just the profit on the financing spread alone could be huge. If the buyer had a request we'd fill it at a price.
This was also the time that Leasing was coming of age to the masses. It had been available for businesses but was now being customized for the average Joe. What better way to live beyond your means than in a new car every 3 or 4 years. You'd be the envy of your neighbors. No down payment, no trade-in to haggle over. Even a smaller monthly payment than if you purchased and financed for ownership. Besides who wants to own a 4 or 5-year-old car? All this seemed like the setup to a perfect storm scenario.
I remember the market opening that Monday after the previous week's losses and it was all downhill from the start. A bump came midmorning but was short lived. By late afternoon I had guys calling to sell their cars for cash to help cover their position. In the final hour of trading the market tanked we saw 300, 400, then 500 cross the tape on the TV. It ended 508 points down. From a closing on Friday at 2246 to 1738 today. (-22.+%). The next day we had more calls as the NYSE and other Exchanges came to a virtual halt at times and only some quick thinking might have saved the day.
This day and many others taught me to be careful when drinking the Kool-Aid. The one thing I took from this and many other days is history has a way of repeating itself in different forms. In 1979 it was the start of the S&L Crisis, In 2000 the internet bubble. In 2006 housing.
Although we all like the direction the market is heading this year. It doesn't take much to tip the apple cart. In the Information Age, the ability to receive good or bad information in record time is a powerful tool.
Enjoy the market while we can as the DOW 21000 may just start another Kool-Aid session.