January 20, 2016

DJIA  15,450

S&P 500  1812

A discussion as the Dow Jones is 16% off its 52 week highs

At the lowest level so far today, the market was at 15,450. which was 16% off of its 52 week high of 18351.36.
I believe this is a normal course correction, and that investors who invest with us should stay the course, and continue to invest as they have been investing. This is certainly not a guarantee of increased returns, but merely an assumption, which could turn out to be incorrect.

The economy certainly slowed down in November and December, as I watch truck and rail loadings, production and manufacturing indexes, and so forth. Consumer sentiment, as last reported is still relatively strong.

I think valuations of most of the companies we own are not only fairly priced, but at value levels.

The following are some companies we own, and some of which I follow, with todays quoted price, compared to their 52 week high, and the percentage gain or loss.

 

 

1/20/16 Intraday Price

52 Week High

%  Loss

 

 

 

 

Apple (AAPL)

$93.42

$134.54

31%

AIG

$53.49

$64.93

18%

Amazon (AMZN)

$547.18

$696.44

21%

Bank of America

$13.27

$18.48

28%

Citigroup ( C )

$39.44

$60.95

35%

Conoco Phillips (COP)

$32.71

$70.11

53%

Chevron (CVX)

$75.33

$112.93

33%

Exelon (EXC)

$26.26

$38.25

31%

Intel (INTC)

$29.21

$37.03

21%

JP Morgan (JPM)

$54.66

$70.61

22%

Microsoft (MSFT)

$49.10

$56.85

14%

Gazprom (OGZPY)

$3.00

$6.25

52%

Public Service (PEG)

$38.14

$44.45

14%

Wal-Mart (WMT)

$60.20

$89.26

33%

Exxon (XOM)

$71.91

$93.45

23%


Jack Bogle founder of Vanguard Group spoke today on CNBC, and he suggested staying the course and sit tight.

Jamie Dimon, CEO of JP Morgan Chase was interviewed by CNBC at Davos Switzerland today, and he had some real good insights, which I will mention in this note. Below are quotes I put together of Mr. Dimon, and I did improvise on some of the words, but I do not think any of the intent or message has been altered at all.

Jamie Dimon CNBC January 20, 2016:

“China has scorned people with their reduction of growth, internal denial of debt levels and their stock market.”

“American economy continues to show strength, but growth is certainly slower.”

“I am hopeful that this market correction is merely a temporary adjustment. I think quick and painful would be the best adjustment. In a few months, I hope to talk to people about how painful it was a few months back, and that it turns out that things were not awful.”

“Consumers are spending money.”

“If oil stays at these prices ($27 per barrel), JP Morgan will have to increase their loss reserves.” He would have increased the loss reserves at December 31, 2015 if accounting rules would have let him. He could see an additional reserve of $750M in 18 months. “No matter, none of this will put JP Morgan in any danger.” He cannot envision any scenario that would put the operations or liquidity of JP Morgan in any danger.

He has been meeting full time with CEO’s in Davos, and all except those in the energy sector are saying, “We are doing okay.”

“If you are not nervous during corrections like this, you are crazy.”

“I cannot take shots at the government, because they shoot back.”

He was asked about his personal investing, and here was his response: “I like investing long-term. I like dividends. I would not buy treasuries at these levels. Principal might drop for a while, but I think now is a good time to buy. I think buying great long-term businesses is the best thing to do.”

In response to a question on the Fed and interest rate raising he said the following: “Normalization is a good thing. The first raises of 25, 50 and 75 basis points should not have a bad effect. In fact, raising rates will indicate the economy is strong enough to do so. The Fed should react to events, and not markets. We are getting too fine-tuned, and instead should watch the economy. If the economy chugs along, we can see increased interest rates.”

The Ten year yield was as low as 1.939% today, and the 52 week high was 2.489% (the 52 week low was 1.651%. He was asked if the 10 year Treasury Rate under 2% is worrisome. "I think the 10 year yield will go back up, when the world realizes the economy is not that bad.”
 

If you have any concerns, please reach out to me. I would be happy to speak with those who are not clients or ours as well. As always, we welcome the opportunity to discuss our outlook and investments with you. 

My email is rredfield@rbcpa.com

Please feel free to contact me with anything you would like to discuss. Feel free to ask general questions on our Facebook page as well. 

You can also follow me on twitter  www.twitter.com/rbco  as well asyou can follow us on Facebook    www.facebook.com/RedfieldBlonsky


Respectfully submitted,

Ron Redfield
 


 

Ronald R. Redfield  cpa, pfs

Redfield, Blonsky & Starinsky, LLC

1024 South Avenue W.

PO Box 2069

Westfield, NJ 07091-2069

  
www.rbcpa.com  

www.twitter.com/rbco  

https://www.facebook.com/RedfieldBlonsky

 

908 276 7226  phone

908 264 7972  fax

 

 

 

Disclaimer

 

 

If you are a client of ours, and if you have questions regarding the company or investment mentioned in this report  please call our office. If you are not a client of Redfield, Blonsky & Starinsky, LLC Investment Management Division and are reading these notes, we urge you to do your own research. We will not be responsible for any person making an investment decision based on these notes. These notes are a "by-product" of our research. We are not responsible for the accuracy of these notes. We are not responsible for errors that may occur in these notes.  Please do not rely on us to monitor or update this or any other report we may issue. In theory, we could come across some type of data or idea, which causes us to eliminate our long or short  position of the company or investment mentioned in this report   from our portfolios.  We will not notify reader’s revisions to these notes. We are not responsible to keep readers of these notes updated for changes or material errors or for any reason whatsoever.   We manage portfolios for clients, and those clients are our greatest concern as it relates to investing. Certain clients of Redfield, Blonsky & Starinsky, LLC may not have the company or investment mentioned in this report   in their portfolios. There could be various reasons for this. Again, if you would like to discuss the company or investment mentioned in this report  , please contact Ronald R. Redfield, CPA, PFS (partner in charge of investment management division). 

 

Information herein is believed to be reliable, but its accuracy and completeness cannot be guaranteed. Opinions, estimates, and projections constitute our judgment and are subject to change without notice. This publication is provided to you for information purposes only and is not intended as an offer or solicitation. Redfield, Blonsky & Starinsky, LLC and Ronald R Redfield, CPA, PFS, may hold a position or act as an advisor on any investments mentioned in a report or discussion.