2014...and they're OFF

Most stock market pros were looking for a pullback in early 2014....and we got one. It was easy to push gains into 2014. While many are positive on a full year cycle....we think caution is better rewarded given the current valuations of many stocks...

What catches our attention::
-CO2 emissions are back to 1995 levels...a positive....China and India's envy.
-Stock repurchase activity accounts for 6.4% of daily trading volume...a record...the stock market continues to shrink in size. This forces buyers to pay more for stocks.
- The average audit for a public company takes 17,000 man hours and costs $4.5 million...growing 5% per year....faster than the economy....this is just one aspect of dealing with all the new rules and regulations...
-100,000,000 people did not vote in the last election cycle...more will this autumn!
-Of the 20 billion barrels of oil equivalent or BOE that were discovered in 2013...we consumed 50 billion BOE. And many think oil prices are going lower?
-"The smartest man in the room" running the largest hedge fund believes cash will return 1%, bonds 3% and stocks 4% in 2014......we agree. He also said, "longer-term debt and liabilities are eating money."
-If you own gold in Brazil, Turkey, Argentina, Venezuela and other emerging markets your holdings were at or near record high prices...why is China buying every available ounce for sale on the global market today?
-Banks are tightening again....they are concerned over new regulations and ones yet being proposed in additional to all the pending lawsuits...a major negative to the economy.
-Cash inside corporate America is at record levels....at least not seen since the 1950's...will it go back to work or stay ultra conservative? We think the conservative...another three years....
-Yes, the consumer debt service ratio is now at the lowest level since records have been kept....this too will stay ultra conservative....people are afraid of their future..

Why is raising the minimum wage a negative? Many will lose jobs as a result of higher costs to the employers, many will work few hours as a result of higher costs, and the worst is that many of those jobs will be eliminated by automation...this type of thinking is so counter productive.....this is why we have the worst "jobs recovery" in American history.....ever!

Danny Boy seen here resting patiently.