Victory, Despite the Terror in War and in the Stock Market

Charles Payne
Posted: Mar 06, 2014 12:01 AM
Victory, Despite the Terror in War and in the Stock Market

"Victory at all costs, victory in spite of all the terror, victory however long and hard the road may be; for without victory there is no survival."
-Winston Churchill

Okay, we'll call it a win-win, even as mainstream media states Putin "blinked," and John Kerry talked about revolution and the global community. President Obama bristled at the idea Putin was tough or won, and that his actions were not "a sign of Russian strength." The fact of the matter is, Russian troops are in control of Crimea, and they didn't have to fire a shot. While it's true, nations should be leery of breaking up because of regional differences and allegiances (otherwise, Texas would be an independent country and Austin, too.)

These open-ended events are all too commonplace these days, to the point we can cheer retreat from Middle Eastern wars, and still claim -though, without a straight face - victory. While there is no doubt that public opinion is firmly against war in general, and the idea that America won in Iraq or Afghanistan is a folly, there are no variations of victories these days. Somehow, we've allowed politicians and the media to frame success in a way that enables indecisiveness, and in a sense make the next battle that much more difficult to win.

On the geopolitical front, there have been fewer victories, save the death Osama bin Laden. North Korea is belligerent, China is imperialistic, Japan is ready to rearm itself, Iran is playing cat-and-mouse in plain sight, and Syria simply signed an agreement knowing that it would never follow. We can demand that tyrants fork over weapons of mass destruction then allow them to skirt natural rules of humanity by dropping barrels of gasoline from helicopters, all the while not living up to their agreement after all.

The fact of the matter is for all the bluster, anger and frustration, and threats of economic sanctions, getting our "partners" on board against Russia is easier said than done since Europe relies so heavily on Russian oil, natural gas and coal. You say, Russia would be killing itself too...and I say, "What's your point?" Vladimir Putin is old school, and for him a victory could mean millions of his own people will die, along with the millions of acres of farmland burned to the ground and trench warfare.
Putin doesn't want it to come down to this I am sure, but 'if push comes to shove,' his definition of victory is a long and hard road.

President Obama can let the media shield him yet again on a decisive geopolitical loss, and hope the news cycle moves on to higher taxes and the plight of the poor being held back by the rich.

The stock market cut to the chase early in the session and decided Putin got what he wanted, that's the de facto annexation of Crimea, which means oil and natural gas flow and bullets will not fly. Keep in mind, market trading is driven at any given moment by emotions, but it's not the place to seek any sympathy from the ills of the world. The market eventually identifies winners, losers, and yesterday's actions underscore a Putin win, without firing a shot.

The Market

Much has been made of investor dilemmas throughout the years with several interpretations and remedies.

The dilemma these days is that the market is breaking out to new all-time highs in a cloud of doubt, with a chorus of doom-and-gloom in the background. The market has always "climbed a wall of worry" and these days, there is a plethora of things about which to be worried. Consequently, while the market has been moving higher, too many people have watched from afar occasionally pressing their nose against the glass to see what all the fuss is about, but staying outside, snake-bitten and afraid.

The problem now is many have taken the plunge, and are looking to make up for lost time and opportunity.

The basic principles apply, however: you want to have a portfolio of stocks that haven't realized their value, and you want to focus on great companies, rather than oversold also-rans. This is tough. Who wants to chase a stock already up big? In some cases, even triple digits in the past year or two and yet, if a stock is not at or near the high, we should wonder why. Yes, you may have to do some chasing, but remember the measure of value is not the share price, but the fundamentals will change as business improves or wanes.

Then there is the lingering issue of the long overdue correction and the big crash.

From a historic perspective the market is ahead of itself slightly, but nowhere near the point of being oversold; it's ridiculous. In fact, the masses have not suspended disbelief, even if the experts have. I am actually poking fun at the so-called experts that seem to get it wrong more and more each day. Yesterday, nine or ten of our open ideas got stock rating upgrades by the Street, a couple already up more than 100%. I love it! On that note, now is the time to ditch all losers in order to catch the wave. If the jobs numbers beat Friday's estimate, I think stocks will go parabolic.
That means straight up, even more than they already have. It would be great, but also my signal to cash in more positions, and this would raise cash.

As you can see, the dilemma is complicated, but there is one dilemma tougher than them all, and that is not being in the market at all. It has been a huge mistake and always will, even when the doom-and-gloom crowd eventually takes their victory dance. Note: being in the market doesn't mean being 100% vested, it means owning stocks and paying attention, pulling your head and fears out of the sand because without victory, there can be no survival and you can't be the victor if you never get into the fight.

ADP Employment Changes

According to ADP, non-farm private sector jobs increased during February by 139,000, worse than economists' average forecast calling for a 150,000 increase. Construction numbers were strong despite the feared effects that the 'polar vortex' would have on employment figures. Ultimately, this underscores our 'rebuilding' investment theme for 2014.