Page 20 - Boca Club News - September '21

Page 20, Boca Club News
Film Review: “Poms”

By Nils A. Shapiro cheering for?” the reply Bruce McGill as the community’s bluff but kind-hearted Chief
is, “Ourselves!” of Security...and, perhaps most delightful of all, a perky Helen
You owe it to yourself To watch Martha and (Phyllis Sommerville), the oldest on the squad, who spends
to watch this film Sheryl attempt to put much of the time performing her cheerleading routines in a
just for the fun of it! together the required eight- wheelchair.
member Cheerleading Helen had wanted to join the club at the outset, but her
This is one of those movies that audiences appreciated club—the tryouts by husband refused to allow her, stating, “Over my dead body!”
more than did the professional critics when it was released far-from-limber bodies, That scene cuts quickly to a funeral, with a teary-eyed Helen
in mid-2019. The media reviewers averaged a 36% approval the practices, then the accepting sympathies from mourners...then glancing over to
rating, calling the story line a bit of a cliché...but audiences competitions that include Martha and silently mouthing, “See you at practice.”
gave it a B+ on an A to F scale, and women over the age of 25 a face-off against the You get the picture by now: Eight women “of a certain
rated it at 81%! My wife, Linda, who admits to being over 25, local high school students’ age” who won’t take “No” for an answer. A fun film for all of
absolutely loved it, and so did I when we watched it streaming Cheerleading Squad, when us old enough to understand, and not too uptight to laugh at
the other night on Netflix. the term “seniors” takes on ourselves.
At a time when too few of today’s films are able to take a whole new meaning—is
our minds off the constant reminders of our pandemic- and a joy to behold, thanks to a cast that includes (in addition to *****
politically divisive environment, Poms offers a lively, fast- Keaton and Weaver): Rhea Pearlman; Pam Grier; a wonderful
paced comedy about people with whom many of this column’s teen-age actress, Alisha Boe, as a high school cheerleader who The Boca Raton Public Library has a DVD of this film
readers will either be able to relate to themselves, or will feels sorry for the old folks and becomes their choreographer; available for cardholders.
recognize in others—and featuring a stellar cast you can’t
help but adore!
The film actually starts out on a rather different kind of
note, as we see Martha (Diane Keaton), a woman having a
Yard Sale outside her home, with a sign stating “Everything
Must Go.” After 40 years in the same New York house, she is
leaving it all behind and moving to a retirement community– The Bull Is Back... Will Raymond James Financial Services, Inc.
Sun Springs, in Georgia. When a customer stops by to inspect
an item and asks, “When did the owner die?”—since that is Arthur Rottenstein
often the reason for this type of sale—we are first tempted It Keep Charging? Registered Securities Principal
to laugh at the question...until Martha makes a phone call to
On August 18, 2020, the S&P 500 set a record high for the first time
cancel the rest of her chemotherapy appointments, and we since COVID-19 ushered in a bear market on February 19. The cycle 561-241-6616
realize why she has given up her home. from peak to peak was just 126 trading days, the fastest recovery in ArthurRottenstein@
RaymondJames.com
Martha’s arrival at Sun Springs is presented as a typical the history of the index, erasing losses from an equally historic plunge bocaratonfinancialplanner.com
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of almost 34% in February and March.
retirement community send-up: golf carts scuttling in all Based on the traditional definition of market cycles, the new record
directions, filled with people waving friendly greetings to one confirms that a bull market began on March 23 when the index closed
at its official low point. This also confirms that the February-March
another, and a cheerful sign out front reminding everyone to bear market was the shortest on record, lasting just 33 days. 2
Although the strong comeback is good news for investors, there
have a good time. When she is asked by the greeter at the gate is a striking disconnect between the buoyant market and an economy
why she has come to Sun Springs, Martha casually replies, still struggling with high unemployment and a public health crisis. Joseph Carpenito
“To die.” Of course, the comment is taken as a joke. The market is not the economy, but the economy certainly affects the Financial Advisor
market. So it may seem puzzling that the market could reach a record
At the registration office, Vicki, the Community Supervisor, high not long after the largest quarterly decline in gross domestic 561-241-6616
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(who clearly takes herself and her job too seriously, played by product (GDP) in U.S. history. Joseph.Carpenito@
an appropriately obnoxious Celia Weston) welcomes Martha raymondjames.com.
and fills her in on the general routine, including the fact that 301 Yamato Road, Suite 3160
every resident is obligated to join one of Sun Springs’s many Boca Raton, FL 33431
clubs. Of course, that is the last thing in the plans of a woman
who just wants to be left alone for whatever time is left to her.
But that is just the beginning. As Martha begins to examine Optimism vs. exuberance
and settle into her new home within the community, a lively, Whereas GDP measures current economic activity, the stock market is forward looking. The rapid bounceback suggests that investors believe
bubbly woman, Sheryl (Jacki Weaver) announces herself as the the pandemic will be controlled in the not-too-distant future and that business activity will return to normal. Whether this optimism is warranted
remains to be seen. The current economic situation remains tenuous, but there are hopeful signs.
next-door neighbor and invites Martha to a card game she is A vaccine could be available in early 2021, later than anticipated but offering light at the end of the tunnel. In the meantime, the virus
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hosting that night. Martha begs off, using the excuse of being continues to suppress business activity. The 10.2% July unemployment rate represented a big improvement over the previous three months, but
it was still higher than at any time during the Great Recession. Recent projections of corporate earnings suggest they will not contract as much as
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tired, having just arrived after traveling. expected, but they will still contract. GDP is projected to make up ground in the third and fourth quarters but remain negative for the year. 7
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The extreme of market optimism is irrational exuberance, and there may be some of that at work in the current situation. The proliferation of
What happens next is a riotous scene, but I won’t spoil low-cost trading apps has encouraged less-experienced investors to trade aggressively, which might be driving some of the market surge. 8
it for you here—except to say that Martha ends up with that
all-night gambling card game taking place at her own home! Economic stimulus
The single, most important factor behind the market recovery is the deep commitment from the Federal Reserve to provide unlimited support

And that mix-up launches a friendship between the two women through low interest rates and bondbuying programs. For some investors, the fact that the economy is still struggling has a strangely positive effect
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that leads to the film’s main story line: their decision to start a in guaranteeing that the Fed will keep the money flowing.
Further support from the federal government is more uncertain, but the strong market suggests that investors may be counting on a second

new club—a Cheerleading Squad made up of eight “55-plus” stimulus package. 10
women—actually in their 60s, 70s and 80s—determined to Nowhere else to go
show that they still have what it takes. And when the uptight Low interest rates make it easier for businesses and individuals to borrow, but they have reduced bond yields to the point that many investors
Community Supervisor tries to prevent them from starting the are willing to take on greater risk in equities in order to generate income. Money that might normally be invested in the bond market has poured
into stocks, driving prices higher. This situation has its own acronym: TINA, There Is No Alternative to Stocks.
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club in order not to embarrass themselves and Sun Springs,
noting there are no sports teams, asks, “Who will you be Big tech at the wheel

While the S&P 500 is generally considered representative of the U.S. stock market as a whole, the recovery has centered around technology
companies, which have helped provide goods and services throughout the pandemic. The Big Six tech stocks — Apple, Facebook, Amazon, Netflix,
Microsoft, and Alphabet (Google’s parent) — were up collectively by more than 43% for the year through August 18. By contrast, the rest of the
companies in the S&P 500 were down collectively by about 4%. The Big Six tech companies now represent more than one-fourth of the total
market capitalization of the S&P 500 and thus have an outsized effect on index performance. 12
One question facing investors is whether to chase the winners or look to stocks and sectors that still lag their previous highs and may have
greater growth potential. Chasing performance is seldom a good idea, but there are solid reasons why certain stocks have been so successful in
the current environment.
Are stocks overvalued?
The most common measure of stock value is price/earnings (P/E) ratio, which represents the stock price divided by corporate earnings over the
previous 12 months or by projected earnings over the next 12 months. The projected P/E ratio for the S&P 500 on August 18 was 22.6, the highest
since March 2000 at the peak of the dot-com bubble. Big tech stocks were even higher, trading at 26 times their projected earnings, and the Big
Six were higher still at more than 40 times projected earnings. 13-14
A different measure of stock value compares the total market capitalization of all U.S. stocks with GDP. By this measure, the market was 77.6%
overvalued on August 18, by far the highest valuation ever recorded. The previous highs were 49.3% in January 2018 and 49.0% in March 2000.
This extreme ratio illustrates the current disconnect between the stock market and GDP, but a significant GDP increase during the third quarter
could bring it down. 15
In considering these valuations, keep in mind that these are extraordinary times, and traditional expectations and measures of value may
not tell the whole story. If nothing else, the extreme volatility and rapid market cycles of 2020 have illustrated the importance of maintaining a
diversified all-weather portfolio and the danger of overreacting to market movements. While new records are exciting, they are only signposts
along the road to achieving your long-term goals.
The return and principal value of stocks and bonds fluctuate with changes in market conditions. Shares, when sold, and bonds redeemed
prior to maturity may be worth more or less than their original cost. Investments seeking to achieve higher yields also involve a higher degree
of risk. Diversification is a method used to help manage investment risk; it does not guarantee a profit or protect against investment loss. The
performance of an unmanaged index such as the S&P 500 is not indicative of the performance of any specific investment. Individuals cannot invest
directly in an index. Past performance is not a guarantee of future results. Actual results will vary.
1, 3, 6, 8, 11, 13) The Wall Street Journal, August 18, 2020
2) CNBC, August 18, 2020
4, 9) The New York Times, August 18, 2020
5) U.S. Bureau of Labor Statistics, 2020
7) The Wall Street Journal Economic Forecasting Survey, August 2020
10) CNBC, August 14, 2020
12, 14) The Washington Post, August 20, 2020
15) Forbes, August 18, 2020
Arthur Rottenstein is a Registered Securities Principal and Branch Manager with Raymond James Financial Services, Inc. in Boca
Raton and founder of Portfoliorepair.com. He has been managing the financial affairs of a number of select families in South Florida
since 1982. Please feel free to call for an appointment at (561) 241-6616 or email him at arthur.rottenstein@raymondjames.
com. Please feel free to visit his website at bocaratonfinancialplanner.com. Securities offered through Raymond James Financial
Services, Inc., member FINRA/SIPC. Investment Advisory services offered through Raymond James Financial Services Advisors, Inc.