Our trading and investing portfolio has changed little. Since January of this year we have added exactly one position China Mobile, symbol CHL, that within a week after our taking the position the stock rocked up about 10 points and we will take quick profits and go home soon. We have not moved one iota from our mega and large cap stocks in our long portfolio and only the one change as noted in the trading portfolio. In either case both portfolios continue they slow steady double digit move upward. The reasons are simple nothing in the economy or politics has moved period.
The political economy of Obama and the Federal Reserve and almost zero rates is here to stay for at least 21 more months. That continues the generational theft that started in 2008 and continues apace today making those of us with assets safely getting richer day by day in our financial assets. The financial engineering that is a result of the political economy of low rates and produces bigger than big stock share buybacks and regular increases in profits and dividends continues without any end in sight.
The fact that here in the first few weeks of the second quarter 2015 earnings reports we get almost universally no increases in top line revenue growth, but almost universally bottom line profit growth tells anyone who has been around this game for more than a few years that few companies are seeing any new customers nor any customers spending more money with them. We indeed have reached the end of Obama and The Federal Reserve's game of tricks and ammunition to juggle figures or push the economy forward. The bullets are all but non existent, except that if the economy dips again the Fed can restart the bond buying and add to their already $4 TRILLION dollar balance sheet with more bond purchases. After what looks to be a dead or negative growth GDP in the first quarter 2015 they might have to dip back into that bag. As they say a Trillion here and a trillion there and after awhile you are talking about real money.
So where do we go from here. We continue to stand by our prediction that nary a rate increase will be seen until after the 2016 election and if Hillary Clinton emerges as the winner maybe not anymore after that for eight more years. Yes readers you heard it here first maybe almost a decade more of no rate increases, no interest earned on bonds, no interest earned in savings accounts, and lastly more asset appreciation for us holding assets.
Be wise and keep your money in large cap stocks and get them out of bonds. The only move we might see in the next twelve months is a concerted effort by banks and the feds is to push up SHORT term rates, not long term rates, in a last effort to run the very last hold outs from bonds into stocks and housing. That is again one more move in the financial game by the politicians to get housing up and moving which is the first sign of economic growth. Think about that we are years into a so called economic recovery and the powers that be are still trying to get the first thing that moves in an economic recovery moving and that is housing.
As for us we will soon be heading to the beach to spend some of that lovely money you young folks and fools keep sending us out of your paychecks and future hopes for a better life. That means we will be spending the young generations future fun money now. We will send you a picture card young folks if you will forward an address, we already got your money for the stamp. I believe the current President and the future female occupant of the White House call this "fairness".
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