Hi Again,

Over the last 2 months, our portfolio gained about 35%. Current chart of the Dow 30 show the

“double bottom” or the “W” sign and that is very positive for the immediate future. However

technicians are warning that it is not going to stay rosy for long.

The Chairman of the Federal Reserve made it official that there would be no interest rate increases

In 2019. Wall Street loved this news. Our central bank was the only central bank that increased rates;

And we did it 9 times while all other central banks were lowering rates which made the dollar rise-

that is till our Feds stopped raising rates. There is an 18 month time lag between implementation of

monetary policy and its effect on the economy. Even though the Feds stopped increasing rates. It is

widely believed that we can expect very low rates of economic growth in the months to come and

some expect a growth rate of about 1.5% for 2019. During Obama’s time we had a growth rate of

over 4% and Trump promised a rate of 5%. Fed Chair addressing the Congress stated that due to the

aging of the population and the decline in the labor participation rate, 5% is impossible. This is why

Europe relies on immigration. However the rate of economic growth rate is mostly due to monetary

policy and it has very little to do with fiscal policies.

Already there are signs that indicate that we might be heading for a recession. The most important

signal we have received is the inverted yield curve. An inverted yield curve is an interest rate

environment in which long-term debt instruments have a lower yield than short-term debt instruments

of the same credit quality. This type of yield curve is considered to be a predictor of economic recession.

Another major signal we got was the decline in the Dow Jones Transportation Index. In fact, only the rails

Are doing well in that index. Fed Ex joined the club by announcing lower expected revenue in the future

due to the global economic slowdown and US led trade wars with increased tariffs.

Even though I felt that Ford could become a good buy in the future, I thought the start “nibbling” at

Ford should come at a time much later than now-may be in a year or two. However what got my

attention was the very high dividend yield of 7%(on 3/24/19) ! We can analyze this in many ways.

If money managers believed that Ford will not decrease their dividend (per share amount), billions

would have poured in to Ford and that would have lowered the dividend yield by now. This is clear

evidence that most believe that in the coming months or years, Ford will decrease the dividend. Let

us assume that everything remaining the same, Ford cuts their dividend per share by 50%, and if

nothing else changes, it is still yield of 3.5%.GM is a better stock than Ford right now but as of now

the dividend yield on GM is 4.07% (on 3/24/19). There is a high probability that Ford will continue

to fall for another 2 to 3 years but we are investing for the long run and we buy when a stock is out

of favor. Our Twitter had a loss for years and over the past 6 months, it had a gain of 22% to 38%.If

Ford does not cut the dividend and if the stock falls, the yield will continue to rise and make it even

more attractive.Ford chart is a classic technical analysis chart. By end of 2018, the chart had a “head

and shoulders” prior to moving sharply lower and at the end of December Ford made a “double

bottom” at about $7.65. That us a clear sign that Ford was headed higher. On 1/14/19, Ford hit a top

of $8.99 before falling to $8.54 on 3/22/19 with a dividend yield of 7%.If you bought Ford,& sold on 1/14/19m you would have made an 18% profit. Imagine what you would have done with call options.

On 3/24/19, Ford at $8.54, call options expiring 1/15/2021, with a strike price of $7 is trading around

$2 (or $200 for 1 contract that controls 100 shares). In other words, you are paying $9 for an option

Expiring in about 21 months and you are only paying a premium of 50cents per share for such a long period. That is a great bargain.

Ford- Even though I felt that Ford could become a good buy in the future, I thought the start “nibbling” at