Paul Schatz, President, Heritage Capital

Fireworks at the State of the Union

My thesis has been to buy any and all mild or modest pullbacks in stocks, bonds, gold and Bitcoin. Another opportunity presented itself on Tuesday morning after a small pullback. It certainly looked like Fed Chair Jay Powell’s remarks were going to be taken well and not the start of a more pronounced decline. And I was glad to not be sitting watching when stocks surged and then plunged on the release of his speech. During that time I shared […]   Read More
Date: February 8, 2023

Inexplicably Strong Employment – Good News is Bad News

On Friday, the government announced that 517,000 new jobs were created in January. That’s about what I would expect. If the economy had just troughed and a new expansion was beginning. 500,000 new jobs almost two years into a recovery is almost unheard of. I thought it was a typo when I saw it. 187,000 was expected. I am still shaking my head, not fully believing the number. Of course, the conspiracy theorists are out in full force that Biden […]   Read More
Date: February 6, 2023

Stock Market Has Done Nothing Wrong

Sorry for the late post. My flight home from Florida was delayed yesterday and it screwed up my schedule. It was 84 when I left and I saw it is supposed to be -25 in Vermont without the wind. The Fed did exactly what 99% of the country thought they were going to do, raise rates by 0.25%. They did a little wordsmithing with their statement. Jay Powell pretty much towed the line in his presser although in such a […]   Read More
Date: February 3, 2023

Bulls Relentless – February Not So Bad – Fed to Hike Rates

I could not have been any more positive as 2023 began against the backdrop of Wall Street looking for a poor Q1 and first half. The stock market continues to behave very well, much to the dismay of the bears which are the majority. And I continue to laugh at their rationale as they hold tightly on to the notion that this is just another bear market rally that is doomed to fail. The market has strong leadership in the […]   Read More
Date: February 1, 2023

***Q4 Client Update***

Many people like to read my very “brief” quarterly client update which I select excerpts. If you’re one of them, please read on. If not, feel free to stop now. Always happy to hear comments and questions. With the clock striking midnight on December 31st, the single worst year in diversified investing of the modern era ended. While it was a very challenging year for stocks with most of the larger indices down -20% to -30%, it was not a […]   Read More
Date: January 30, 2023

Market Passes Another Test

On Wednesday I wrote about The Important Test that the stock market faced with Microsoft, MMM and Boeing all reporting either weaker than expected numbers or guided lower for at least Q1. Remember, if my bullish case was to be proven wrong for Q1, it would be because the market wasn’t prepared for even more corporate weakness. Look at the far right of the chart. Microsoft opened down about 5% and closed yesterday at new highs for 2023. MMM opened […]   Read More
Date: January 27, 2023

The Important Test Begins

You would have to have been asleep for the past month to have missed my 2023 Fearless Forecast. It has been posted so many times along with a myriad of media interviews. In that I said one of the key tests for my bullish thesis would be market reaction to what would be a slew of pre-announcements and lower guidance for Q1. I wasn’t arrogant enough nor stupid enough to believe the news could possibly be rosy throughout earnings season. […]   Read More
Date: January 25, 2023

When Markets Don’t Accommodate You Pivot Quickly

Friday was a large options expiration, a day when exaggerated moves can be seen, especially when what is supposed to happen doesn’t. The stock market had another strong day on Friday after two down days. In the best of bull markets a two-day decline is a universal time to buy. However, I am not saying this is one of those times, just that it’s something to keep in mind. And I wanted to share some super short-term thoughts from Friday […]   Read More
Date: January 23, 2023

How a Roth Conversion Could Lower Your Tax Costs

Now more than ever, even high-net-worth individuals should be looking for ways to reduce taxes. Inflation, like market volatility, affects everyone: Having a million dollars in a savings account today may buy more goods and services than it could tomorrow. With this in mind, a Roth conversion could be an option worth exploring if you want to reap the benefits of reduced taxes and greater financial flexibility.  In a sense, this allows you to have a little cake and eat […]   Read More
Date: January 23, 2023

Fed Should Stop Right Now

As I mentioned the other day, a pause to refresh or a mild pullback would be good for the stock market after running hot and heavy this year so far. On Wednesday we saw weaker economic data in retail sales and before that, Empire Manufacturing. Unlike previous soft data the stock market fell with bad news being bad news. At the same time, the Fed heads were out in full force reiterating their stance for higher interest rates for longer. […]   Read More
Date: January 19, 2023