Remember the fundamentals? Through all of the hoopla of Dow 24,000, the sturm and drang of the tax reform passage and the potential impeachment of the president for authorizing someone to talk to the Russians-which I didn't know was illegal-there are companies doing things that matter.
Yep, I never dismiss the big picture. I am all over it. At all times. But the small picture has to be front and center because you must always remember that not every company is caught up in the big picture and so often it turns out that the big picture presents real opportunities to buy the stocks of companies at prices you never thought possible or didn't think you would ever see again after this amazing advance.
Take this very morning. Two companies, VMWare (VMW) and Nutanix (NTNX) had just reported last night and they were two of the biggest blowouts of the year. Both companies help clients use the cloud to further their businesses. Both seem to have more business than they can handle.
High quality problem.
I knew from their conference calls that these two stocks would be up huge and it was too late to even contemplate telling people to buy them.
But sure enough, in large part because of the headlines out of Washington, VMWare and Nutanix each took a tumble, the former right at the opening and the latter soon after. I am not a trader any more but let's just say these were two very undeserving gifts to prospective shareholders and I was in disbelief when I saw the prices given how well these two companies are doing.
It's never too late to buy shares in great companies but part of the task of rigorous investing is to let the stock come to you. Tax bill failures, Michael Flynn's lies and the blaring sound of Dow 24,000, at what looks like a most inopportune time, all conspired to give you a chance that otherwise shouldn't be available.
Same thing goes for the oils. It is now obvious to pretty much everyone that a combination of OPEC discipline and worldwide demand have conspired to bring prices higher than most people thought would occur.
Yet, the S&P's gravitational pull allowed you to buy stocks that are levered to crude at almost unchanged prices. Now, again, you can say this is just trading, Jim, and you are about investing. That said, I do not frown on trading, and you don't get these kind of opportunities very often.
Of course, we have to pay attention to some of the weaker stories out there and the confusion created by the non-business headlines obscured what was an excellent opportunity to let some Ulta Beauty (ULTA) go at almost unchanged prices. Ulta warned that gross margins would not be as good as some on Wall Street had hoped, yet the stock was acting well. Upon closer review, though, you were given a chance to see through the smoke of the battle to make a trade and roll out of the stock even if you want to get back in at low prices.
Finally there is the big lesson: no one ever made a dime panicking and selling right into the teeth of a decline, but many have made money using that decline to buy what they want. Panicking is not a strategy. Sure the market might go lower on some sort of new revelations about the president. But you must never let something like that disturb your powers of concentration. If you can't handle it, I always say, there's plenty of alternatives: mutual funds, S&P index funds or even CDs. If you can't handle the pain, if something non-stock clouds your vision, it's best to put your money in someone else's hands who can be cooler, calmer and less susceptible to distracting and emotional thinking that is almost certain to produce disappointing returns.