Transcript Diminishing, But Still Expanding, Production of Goods and Service

Rational Investing
Special Interest Group
combines fundamental and technical analysis
Without Using VectorVest
Economic Climate and
Market Weather Conditions
Presented by Herb Geissler, Managing Director of St.Clair Group
May 2014
Rising Federal Debt
Continues
Stifling Economic Growth
US Economy Is Sliding
Downhill, Eking-out only a
0.1% Gain in 1Q
Obamacare mandates increased healthcare
spending from average of $5 bn/Q to $45 bn,
flipping GDP from 1% loss to 0.1% gain
Diminishing, But Still
Expanding, Production of
Goods and Service
Yet Stock Market Advances
Fearlessly,
Sucking In Money As It Did During Roaring 90s
As QE Provides Excess
Liquidity
And Tapering continues adding fuel for further “melt-up”
Resulting in Only Two Corrections
During Past Five Years
Market Gains Primarily
From
Expanding PE Multiple
Index ETFs Are Flat, ytd, and
R2k Turned Bearish for May
“sell in May and go away” obviated by FED liquidity
Intermediate-Term NetOut
 Economic uncertainties churn markets and
sectors into short, choppy trends
 Excessive liquidity raised aggregate, causing
Index Funds to perform well as stock market
“melted upward” with shallow dips
 Risk and size of correction increases daily
 Knowing “How big and how long” is less important
than “when to get out and when to get back in”
What To Do?
 Keep drinking, as long as bartender
keeps pouring cheap drinks
 Benny’s Bar is now pouring smaller shots
 $45 Billion/month may be “inflection point”
 Remain sober and watchful to jump out
of harm’s way, before “last call”
 Use disciplined decision-making tools to
know when to shift positions
Now,
Let’s focus on how to determine
market direction to guide your
profitable actions