Hiring by registered investment advisors (RIA's) has stepped up and profits have decreased.
With all that is going on in the markets, I think it is pointing to a relative economic peak. While not a perfect measure, economically we are very much closer to the top than the bottom.
Econ 101 - Classic signs of an economic peak
- Yield curve has steadily shifted up. The short end has been moving up for some time now.
- M&A activity is robust. ATT and Time Warner; Comcast, Disney and Fox
- Unemployment is at an all-time low. Hiring peaks at the end of the cycle.
- Inflation is moving up
- Profit margins in general have peaked and are the downside. Different businesses have different cycles but, on average, margins are contracting.
- The market always leads the economy and it is down since the January peak
- The average consumer is on the high end of their debt capacity. 75% of GNP is driven by the consumer segment.
- Car sales have peaked and are tailing off.
Being an equity guy, I am always invested. But, I am only adding very limited positions which I think pose significant LT value. And.....I am mentally preparing for the downside of the probability curve. In up markets, many forget that there are two sides of the probability curve.
I am also growing my cash position and keeping a shopping list.
I would rather watch someone else do the "high wire act". Me, I like to stay on the ground and live for another day.
