outlook 2017 the crystal ball is cloudy! … · 14/12/2016 · outlook 2017 the crystal ball is...

Outlook 2017

The Crystal Ball is Cloudy!

Fred Richards

AAII –DFW – December 14, 2016

Disclaimer

Wednesday, Dec. 14, 2016 © Strategic Investing 2

The content of this presentation is for the edification of the audience and has not

been endorsed, nor approved of, by any of the persons, companies, nor websites

mentioned herein, or during the course of this presentation.

The author and/or speaker has attempted to verify all information but does not

take any responsibility for any action which a member of any audience (both in

person or in a subsequent venue) makes of the information which is presented

herein.

Results obtained in prior years are no guarantee of results either this year or in

the future.

You and you alone are responsible for any decisions you make based

upon the information obtained during the course of this presentation.

Fred F. Richards, Jr.

Acknowledgements


We gratefully acknowledge the data provided by various sources in this presentation and

have identified on each chart the source from which the charts were obtained.

Charts are courtesy of Haver Analytics, The Wall Street Journal, Dow Jones, Inc., Halkin

Services, Finviz, Martin Capital, Kitco.com, High Growth Stocks, Stockcharts.com,

Econoday, Prudent Bear, Simon Hunt Strategic Services, ProFarmer.com, GaveKal,

ZeroHedge, Prudent Bear and/or Big Charts.

Special thanks to Market News International and Haver Analytics.

Current Agriculture data courtesy of ProFarmer.com.

This is a copyrighted presentation and can not be used and/or redistributed

without the express written permission of Strategic Investing. It is for the private

use of our subscribers and those in the audience.

Purpose


To look at the changes that the Trump Administration

might bring!

To provide insight into possible areas where the investor

might find opportunities.

The Six “D”s


Demographics

Defense

Dollar

Debt

Derivatives

Default

http://www.adrich.com/OPNArchive/Opn2016/May16.php

Trump’s Campaign Promises

Wednesday, Dec. 14, 2016 © Strategic Investing Slide 6

Build a Wall between Mexico & U.S.

Deport Criminal Illegals

Restructure Immigration/Guest Worker Program

Track Visitors and Students

Rebuild Infrastructure/Climate Change/Impact Studies

Farm Subsidiary programs/CRP/H2O

Renegotiate NAFTA

Reduce Regulatory Burdens

Reduce Government Workers/Increase Efficiency

Rebuild and restructure military forces

Restructure Welfare Programs/Food Stamps

I’m reminded that …



Where is Trump

going to get the

money to pay for

his programs?

The Current Mess


Some analysts believe that the non-discounted amount of

unfunded liabilities now stands in excess of $200 trillion.

The Social Security Disability program is expected to be

insolvent in 2022,

Medicare in 2030 and

Social Security in 2035 according to the House Budget

Committee. (probably sooner)

Social Security, Medicare & Medicaid


20% of GDP

37% of all Federal Spending

Spending is increasing at about 9% per year

Costs are out-of-control

Apply Clayton & Sherman anti-trust acts to healthcare

Eliminate cross-border restrictions on insurance pricing

Allow low-bid pricing of drugs and medical devices

Eliminate seizures of medicine purchased abroad

Healthcare


Repeal Obamacare

Institute Health Savings Accounts

Put responsibility on Patient, not insurer

There are only a few possible solutions ... all of which

come with a political price to pay including.

1. Raise age to receive benefits

2. Reduction of benefits as AGI increases

3. Requalify all receiving disability benefits every five years.

4. Tax all benefits as ordinary income.

Immediate Steps to be taken …


Approve the North Dakota pipeline

Approve the Keystone XL pipeline

Void many Obama Executive Orders

Revoke the Iranian Nuclear Deal

Revoke the Trans-Pacific Partnership Trade Agreement

Revoke the Paris Agreement on Climate Change

Begin to build the Mexican Border Fence

Rework NATO financing

Rework U.N. financing

Increase staffing of Immigration Courts

Trading vs. investing


Bull or Bear

Short or Long-term

Technical vs. Fundamental

Are you willing to do the work?

Remember …


The trend is your friend …

But

The investment vehicle is how you make or lose money!

It is more important to focus upon the individual

investment or sector than just the index trend.

Consumer Price Index (CPI)


Unemployment Rate


Always Remember


Markets are based upon Emotion not Facts

Perception is what counts!!!

Be ready for Grey or Black Swans to occur

Always Remember


Trading is different from Investing!

Never trade bonds except for the short-

term!

Options/derivatives have a time factor

component

Always have a Plan “B” and/or Plan “C”

Buying companies with increasing sales,

increasing earnings and positive cash flow

works in the long run!

Opportunity Always Exists …


The Real Question –

Are you going “Long” or “Short”!

It is easy to acquire a position but

to win or lose you must have a

position.

The most critical decision is when

you close the position.

Where are we?

Wednesday, Dec. 14,

2016

© Strategic Investing 22

Interest Rates


What does the FED control?

The Fed Funds Rate

The FOMC meetings

Is the amount of outstanding debt important?

The law of supply/demand

Credit default swaps … credit insurance?

Nominal versus real values

How does an entity go bankrupt?

Suddenly …

A 25 point raise today …

Wednesday, Dec. 14,

2016


Future Elephants?

Wednesday, Dec. 14,

2016


Biotechnology


DNA & Bio-Tech dealing with Regenerative Tissue

Stem Cell research to add years of life

DNA and Stem Cell research to cure diseases.

Or My Favorite

Wednesday, Dec. 14,

2016


Before Closing with a few words

…

My investing thoughts


Invest in stocks with increasing sales, increasing earnings

and positive cash flow.

Look for strong balance sheets/dividend growth.

Protect your investments

If interest rates increase, bonds go down.

If Obama Care folds, stay away from hospital stocks and

major drug companies.

Home builders and their brethren are vulnerable.

Stay away from China & Emerging Country stocks

Continued …


Railroad and trucking stocks look vulnerable

Banks may be good short-term but quality of assets ???

Insurance Companies have payout issues … Ladders?

ETF’s of emerging countries have high risks

U.S. Energy producers/transporters might be good bets ..

Long-term

Waste recyclers & Water utilities are interesting.

That’s All …

Questions?

www.adrich.com

www.strategicinvesting.com

Fred Richards


http://www.adrich.com/



http://www.strategicinvesting.com/

outlook 2017 the crystal ball is cloudy! … · 14/12/2016 · outlook 2017 the crystal ball is...

Documents