Date: June 28, 2024

“You’re the Worst Ever.” “No. You’re the Worst Ever.”

Sorry for the delay. I returned from a quick trip to Pittsburgh with a possible rotator cuff tear so typing is a bit more challenged than usual. I am fine, but going about my business a little slower.

As you know I have said and I continue to strongly opine that the election is basically a non-factor for the markets and economy this year. Let all the media and pundits parse words and create hysteria that we can take advantage of.

I watched last night’s debate naively hoping for a glimpse into any fiscal and economic policy clue for 2025. What I saw what an utter embarrassment from two grown men acting like children on a playground. “You’re the worst ever.” “No. You’re the worst ever.” When they argued about golf handicaps, I turned to my wife and said, “Well, I could beat them both. Maybe I should be president.” All I could do for 90 minutes was shake my head in disbelief that this is the best America can offer. People like Thomas Jefferson, JFK and Ronald Reagan must have rolled over in their graves. Heck, even Walter Mondale would be a superstar on that stage.

I learned nothing about what’s going to happen after the 2017 tax cuts expire next year. Trump kinda, sorta thinks he is going to extend them and maybe cut more. Republicans are not on board. Biden seems like he wants to extend some but hike on others and then add a wealth tax. Frankly, I don’t think either really know what’s best for the U.S. Neither one understands that a $35 trillion nation debt cannot be fixed conventionally. And neither one has even a scintilla of a plan to address this.

My guess is that for the next few months we are not going to hear anything new on tax nor economic policy. And you know what? It doesn’t matter. The markets are fine. The economy is fine. That’s for now. A pullback is coming in stocks, but it should be mild to modest. Most stocks have been correcting beneath the surface for months as I look at our Unloved Gems portfolio.

Today is a huge day. We have end of week, month, quarter and first half. Don’t be surprised to see some of the usual portfolio games and mark ups as a lot of folks get paid based on today’s close. Present company included for full disclosure although I don’t see us doing much in the markets today. It is also the annual Russell Indexes rebalancing. Many portfolio managers no longer wait until late in the day to do this.

Between my son’s injured elbow and my shoulder, two in the Schatz house won’t be pitching nor playing golf this weekend. Like a border collie without work, I don’t do well sitting around. Some would say I get into trouble or get fat. I sense more office time on Saturday and Sunday mornings.

On Monday we bought EWT and PCY. We sold EPOL. On Tuesday we bought more FUTY. We sold PMPIX, RYPMX and levered S&P 500. On Wednesday we sold PCY. On Thursday we sold EMB.


Paul Schatz, President, Heritage Capital