Friends
With the non-farm payroll number coming in right on the expected number, traders got back in the buying mood during today’s session sending stock prices to highs we have not seen for some time. As we mentioned, yesterday’s pause was refreshing, and traders seemed more interested in getting involved on the long side once again today.
For the day, the Dow Jones Industrial Average was up 43 points to close at 13,435. The S&P 500 was up 7 points to finish the day at 1466. Gold was down $17 to trade at $1657 per ounce, while oil was up $.12 to trade at $93.04 per barrel WTI. The S&P 500 traded at the highest point that we have seen in 5 years (but closed slightly below it). That’s right, although everyone is miserable and money has been flowing out of stocks and into bonds for 4 years now, stocks continue to frustrate the bears by continuing to climb. I really believe that the majority of Americans believe that the stock market has been a bad place to be over the past 3 years, mainly because they got out in 2009 and never came back. They would be very surprised to learn how stocks have risen even as they and their brethren have been taking money out at a record pace. Unfortunate.
Anyway, we manage money based on the risk that we perceive and the opportunity we see ahead. No doubt , 2010, 2011, and 2012 contained inordinate amounts of risk, and to just be fully invested in stocks would have been foolishly ignoring the risks, but to totally abandon the markets was not the answer either. We attempt to quantify the risk then decide how much we want to be involved. In baseball, a hitter goes to the plate with the power to decide when to swing and when not to swing. Unfortunately, many in the investor class decided not to take an at bat the last 3 years.
That’s enough pontificating for today. Have a great weekend everyone.
