Today I want to start off with a word about a certain technical indicator you’ve probably heard a lot about this week. It’s a prediction that gets made every year at this time by Punxsutawney Phil, a Pennsylvania groundhog, who sticks his head out of the ground on February 2 to predict whether winter is here to stay or if spring will come early.
As you’ve probably heard, the resident rodent saw his shadow, meaning that we’re in for six more weeks of winter.
In Massachusetts, where Cabot is located, this comes as no surprise. Truth be told, whether or not the furry creature saw his shadow, we’d be in for six more weeks of cold, snow and wool sweaters. Heck, it even snowed on my birthday (which is in May) once in the Northeast and that is far more than six weeks from now.
As a child, I really believed in the power of the groundhog to forecast the weather. I waited each year as we were told whether to expect flowers in March or May. But soon I caught on to the false hope being doled out by old Phil and realized that no matter what this furry forecaster predicted, it would probably be winter here for at least six more weeks.
But I was still curious about how or why we started relying on a groundhog to play soothsayer so I did a little research. Here’s what I found …
German settler tradition says that if a hibernating animal casts a shadow on February 2–the Christian holiday of Candlemas–winter would last another six weeks. If no shadow was seen, legend said spring would come early.
Since 1887, the Pennsylvania groundhog has seen his shadow 97 times, hasn’t seen it 15 times and there are no records for nine years, according to the Punxsutawney Groundhog Club.
There’s even been a movie, starring Bill Murray as a reporter covering this riveting event, which apparently helped to boost the hype around Groundhog Day festivities.
In any event, I’m not putting much stock in old Phil to forecast the seasons or anything else. We don’t do predictions here at Cabot, we watch the market and use our disciplined market timing indicators to stay on the right side of the trends.
Government handouts are based on votes and “campaign contributions”, not on need. In Washington, D.C., the creed is “When you rob Peter to pay Paul, you can count on Paul’s support”; an example is Medicare — paying the biggest lobby, Seniors, who have the most wealth and the least lifetime to “leverage” better medical care, instead of lobby-less children.
By the way, the federal government has no legal authority to handout charity.
Regarding the “rant” on the ineffectiveness of various forms of “stimulus” payouts, remember that government handouts are often based on votes and campaign contributions, rather than need. Washington is ever mindful of “If you rob Peter to pay Paul, you can count on Paul’s support”. For example, Medicare pays the biggest “interest group”, seniors, even though they are the least-needy age cohort and represent the lowest “value” in terms of years to enjoy better health. Children, who have no lobby, are the highest pay-off investment in healthcare, but they get nothing but the debt.