Royals Rumblings - News for October 25, 2018
Colby Wilson of BP KC looks at building a non-contender
Keep Hill, Peralta, Kennedy and McCarthy, non-tender Flynn in hopes of bringing him back on a minor league deal with a spring training invite (he had moments, but not that many) and then go for high-end reclamation projects (Delgado, Storen, Venters) at reduced cost but with potential for a high yield. Wilson, Perez and Ottavino should have offers from contenders, based on recent success. Loup is a guy, albeit one who has gotten major-league hitters out for a number of years in a row. Delgado, Storen and Venters could actually help.
Ryan O’Hearn had a debut to remember (I’ve been telling you all this)
The current Royals players are motivated by playoff baseball, even despite not being a part of it
“I’ve been pulling for Milwaukee the whole time,” Gordon said. “With Lo-Cain, Soria, and Moustakas on that team. It was fun to see them in the playoffs and make a good run for it.”
Watching this year’s postseason drama brings back vivid memories for Gordon.
“It kind of gives you motivation to work hard in the offseason and try to get back to where we were in 14 and 15,” Gordon said.
Cubs trading for Merrifield?
FanGraphs continues their contract crowdsourcing
The openers are coming, but the starters will be fine
Who could have predicted the Eduardo Nunez 3-run home run in Game One?
The nine moments that made Game One a thriller
How much Sporting KC players are making this year
The Champions League is back!
Keith Law’s World Series Travel Guide
Twitter is testing some new features, which look...okay
My market/finance thoughts: Our President continues to bash the fed and try to squeeze China with tariffs. It seems somewhat clear - not to get too political here - that the leaders in the White House must not understand what tariffs are. While they do help (in theory) bring production into the US (companies stop buying from the country with tariffs placed on them), it also raises supply costs (spoiler: large companies can’t just overnight change their entire supply chain; Apple can’t just start making all their iPhones in the US tomorrow) which gets passed off to consumers. Hurting profits through higher expenses can lead to business slowdowns in spending, capex, and hiring, while potentially ultimately ending in job losses.
While China was undoubtedly not playing that nice, these tariffs seem to be more of a fear-monger tactic and seemingly are hurting the united states more than China. The stock market, something we know Trump keeps a heavy eye on, has not taken kindly to the expectation of tariffs and their impacts. As of this writing, the S&P 500 is now down year to date. A year where we’ve had record profits, strong earnings growth, near-record unemployment, low interest rates, and incredibly strong economic data.
I’m hesitant to blame it all on tariffs, but listening to earnings calls, they are a popular topic of discussion and a going concern for companies.
It seemed fairly easy for Trump to check off a positive point box for his early tenure in the White House. He basically had to just sit back and watch synchronized global growth build strong economic data, lead the markets to new highs, and say “look how good the economy is doing under me.” Instead, he decided to grease the wheels of a hot economy with a tax cut aimed to help the middle class (*narrator voice* it didn’t), complained about interest rates, and slapped possibly 25% tariffs on the second largest economy in the world that a large source of US companies revenue and supply chain.
While the market continues to drop based on these fears, Main Street continues to buy any and all dips but the big money (Wall Street) is staying put.
Aswath Damodaran (the father of valuation) tries to put a value on the marijuana market
The stock sell-off is a bit worse now than it was in the prior corrections (typically a 10% decline from an all-time high). The length of this correction/dip is worse than the priors.
Some say BTFD while others are more cautious to let things settle down a bit. Yours truly BTFD two weeks ago, and last week, and the other day...
This all isn’t too bad in the grand scheme of things if you have shares in companies that aren’t wildly overvalued. Stocks typically rise over time, and even at the lows of the credit crisis in 2008, if you held, you would be well in the green by now. For those of us who have bullish options, it looks like those are going to expire worthless.
If there is a semi-positive, there isn’t any real new headlines causing this sell-off. There is nothing that exists today that didn’t really exist a month or two ago. You could argue rates are higher now than they were two months ago, but we all knew that would be the case.
Meanwhile the VIX (a proxy for “fear gauge”) has been making lower highs.
Song of the day