ACTIONABLE ADVICE FOR FINANCIAL ADVISORS: Newsletters and Commentaries Focused on Investment Strategy

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2014-05-09 00:00:00 Weak Stock Market Closes Are On the Rise by Team of GaveKal Capital

We've taken note of an increasing number of weak-ish stock market closes and decided to build an indicator to measure the number of weak closes and compare it to stock prices.

2014-04-08 00:00:00 Predatory Trading ? Just How Big an Issue is High-Speed Trading? by Matt Waldner of Columbia Management

High-frequency trading (HFT) is a topic institutional investors and traders have been battling for years. A new book titled Flash Boys by author Michael Lewis of Moneyball fame, investigations out of U.S. regulators and a 60 Minutes spot on a recently developed exchange, IEX, brought this topic from Wall Street to Main Street. In this article, we?ll take a walk around the issue, educate our investors, and hopefully, quell any concerns.

2014-04-05 00:00:00 The Lions in the Grass, Revisited by John Mauldin of Millennium Wave Advisors

Today we explore a few things we can see and then try to foresee a few things that are not quite so obvious. The simple premise is that it is not the lions we can see lounging in plain view that are the most insidious threat, but rather that in trying to avoid those we may stumble upon lions hidden in the grass.

2014-04-02 00:00:00 Reforming China?s State-Market Balance by Joseph Stiglitz of Project Syndicate

Many of China?s problems today stem from too much market and too little government. Or, to put it another way, while the government is clearly doing some things that it should not, it is also not doing some things that it should.

2014-03-16 00:00:00 Inequality and Opportunity by John Mauldin of Millennium Wave Advisors

Today we will continue our thinking about income inequality, and I will respond to some of your letters, as they make good launching points for further discussion of the topic.

2014-03-14 00:00:00 Dangerous Assumptions for Retirees by Rob Isbitts of Sungarden Investment Research

One of the main difficulties with MPT, is that by focusing on historical data to calculate asset allocation, it completely ignores extreme risk (2007-2008).

2014-03-09 00:00:00 The Problem with Keynesianism by John Mauldin of Millennium Wave Advisors

Keynes himself would appreciate the irony that he has become the defunct economist under whose influence the academic and bureaucratic classes now toil, slaves to what has become as much a religious belief system as it is an economic theory. Men and women who display an appropriate amount of skepticism on all manner of other topics indiscriminately funnel a wide assortment of facts and data through the filter of Keynesianism without ever questioning its basic assumptions. And then some of them go on to prescribe government policies that have profound effects upon the citizens of their nations.

2014-02-15 00:00:00 The Economic Singularity by John Mauldin of Millennium Wave Advisors

Today, let’s think about central banks and liquidity traps and see if we agree that central bankers are driving the car from the back seat based upon a fundamentally flawed theory of how the world works. That theory helped produce the wreck that was the Great Recession and will have its fingerprints all over the next one.

2014-02-01 00:00:00 Central Banker Throwdown by John Mauldin of Millennium Wave Advisors

The Federal Reserve is signaling that it is going to end quantitative easing at some point in the future; therefore, investors are trying to find the exits before the end actually comes.

2014-01-18 00:00:00 Forecast 2014: 'Mark Twain!' by John Mauldin of Millennium Wave Advisors

The surface of the market waters looks smooth, but the data above suggest caution as we proceed. Perhaps slowing the engine and taking more frequent soundings (or putting in closer stops!) might be in order. The cry should be "Mark twain!" Let’s steam ahead but take more frequent readings and know that a course correction may soon be necessary.

2014-01-04 00:00:00 Forecast 2014: The Human Transformation Revolution by John Mauldin of Millennium Wave Advisors

It is that time of the year when we peer into our darkened crystal balls in hopes of seeing portents of the future in the shadowy mists. This year I see three distinct wisps of vapor coalescing in the coming years. Each deserves its own treatment, so this year the annual forecast issue will in fact be three separate weekly pieces.

2013-12-07 00:00:00 Interview with Steve Forbes by John Mauldin of Millennium Wave Advisors

For whatever reason, Steve Forbes seems to bring out the passion in me. When I think about what central bank policies are doing to savers and investors, how we are screwing around with the pension system, circumventing rational market expectations because of an untested economic theory held by a relatively small number of academics, I get a little exercised. And Steve gives me the freedom to do it.

2013-11-24 00:00:00 Game of Thrones - European Style by John Mauldin of Millennium Wave Advisors

The Eurozone crisis is not over, and it will not end quickly or soon. Even if it seems to unfold in slow motion - like the slow build-up in a Game of Thrones storyline to violent internecine clashes followed by more slow plot developments but never any resolution, the Eurozone debacle has never really gone away. The structural imbalances have still not been fixed; politicians and central bankers have still not agreed to solve major fiscal problems; the overall economy still disintegrates; unemployment is staggeringly high in some countries and still rising; and the people are growing restless.

2013-11-13 00:00:00 GameStop and Our Long-Term, Contrarian Investment Approach by Jay Kaplan of The Royce Funds

Because our contrarian approach emphasizes a long-term time horizon, we tend to invest in companies that we believe have the financial wherewithal to withstand out of favor periods. GameStop used trying times to build conviction and expand its core business rather than abandoning its discipline to meet outside expectations.

2013-10-26 00:00:00 A Code Red World by John Mauldin of Millennium Wave Advisors

The heart of this week’s letter is the introduction of my just-released new book, Code Red. It is my own take (along with co-author Jonathan Tepper) on the problems that have grown out of an unrelenting assault on monetary norms by central banks around the world.

2013-10-20 00:00:00 The Damage to the US Brand by John Mauldin of Millennium Wave Advisors

There is no doubt that the image what I will refer to in this letter as the "brand" of the United States has been damaged in the past month. But what are the actual costs? And what does it matter to the average citizen? Can the US recover its tarnished image and go on about business as usual? Is the recent dysfunction in Washington DC now behind us, or is it destined to become part of a bleaker landscape?

2013-10-12 00:00:00 Sometimes They Ring a Bell by John Mauldin of Millennium Wave Advisors

Three items have come across my screen in the past month that, taken together, truly do signal a major turning point in how energy is discovered, transported, and transformed. And while we’ll start with a story that most of us are somewhat aware of, there is an even larger transformation happening that I think argues against the negative research that has come out in the last few years about the reduced potential for growth in the world economy.

2013-09-28 00:00:00 The Renminbi: Soon to Be a Reserve Currency? by John Mauldin of Millennium Wave Advisors

Contrary to the thinking of fretful dollar skeptics, my firm belief is that the US dollar is going to become even stronger and will at some point actually deserve to be the reserve currency of choice rather than merely the prettiest girl in the ugly contest the last currency standing, so to speak. But whether the Chinese RMB will become a reserve currency is an entirely different question.

2013-09-21 00:00:00 Rich City, Poor City by John Mauldin of Millennium Wave Advisors

This week we will conclude our look at pension plans for the nonce with a 30,000-foot overview of the states and then take a deeper dive into one city: mine. This will give you at least one version of how to do your own homework about your own hometown. But fair warning, depending on your locale, you may need medical help or significant quantities of an adult beverage after you finish your research.

2013-09-07 00:00:00 Unrealistic Expectations by John Mauldin of Millennium Wave Advisors

Two well-respected analysts of pension funds have produced reports this summer suggesting that pensions are now underfunded by more than $4 trillion and possibly more than $5 trillion. I would like to tell you that the underfunding is all the bad news, but when you probe deeper into the problems facing pension funds, it just gets worse.

2013-08-31 00:00:00 How Do I Hate Thee? by John Mauldin of Millennium Wave Advisors

I will list a number of reasons why I hate this market and then suggest a few reasons why that should get you excited. We will look at some charts, and I’ll briefly comment on them. No deep dives this week, just a survey of the general landscape.

2013-08-30 00:00:00 Survey Says... What? by Robert Isbitts of Sungarden Investment Research

During the past week, a survey caught my eye and dropped my jaw. It was published in Investment News, a leading online and print publication for the investment advisory industry last weekend. It covered a survey of individual investors by brokerage firm Edward Jones about the potential impact of rising interest rates on their investment portfolios. According to the article, written by award-winning columnist Jeff Benjamin, “two-thirds of the respondents don’t understand how rising rates will affect their investment portfolios.”

2013-08-25 00:00:00 France: On the Edge of the Periphery by John Mauldin of Millennium Wave Advisors

Charles de Gaulle said that "France cannot be France without greatness." The current path that France is on will not take it to renewed greatness but rather to insolvency and turmoil. Is France destined to be grouped with its Mediterranean peripheral cousins, or to be seen as part of the solid North Atlantic core? The world is far better off with a great France, but France can achieve greatness only by its own actions.

2013-07-26 00:00:00 Investing In Bonds When Rates Are Rising by Tom Dalpiaz of Advisors Asset Management

How can investors “stay in the bond game” during these difficult rising rate environments? Here are some suggestions.

2013-07-16 00:00:00 Deficit? What Deficit? by Brian Wesbury, Bob Stein of First Trust Advisors

Hope that title caught your attention, but, you should know, we are only half joking. In June, the federal government recorded a $116.5 billion surplus! Yep, you read that right surplus! the largest surplus for any June ever. Government spending fell to $170 billion for June, 47% below last year.

2013-07-13 00:00:00 The Bang! Moment Shock by John Mauldin of Millennium Wave Advisors

This week we resume our musings about Cyprus, to see what that tiny island can teach us about our own personal need to engage in ongoing critical analysis of our lives and investment portfolios. Cyprus is not Greece or France or Spain or Japan or the US or (pick a country). I get that. No two situations are the same, but there may be a rhyme or two here that is instructive.

2013-07-01 00:00:00 "This Country is Different" by John Mauldin of Millennium Wave Advisors

Cyprus is a very small country, some 800,000 people. Among the leadership, everyone knows everyone. There is much to admire, as we will see. But Cyprus has had a gut-wrenching crisis, proportionately more dire than any in other European countries recently; and precedents are being established here for how future problems will be dealt with in the Eurozone and elsewhere.

2013-06-15 00:00:00 Economists Are (Still) Clueless by John Mauldin of Millennium Wave Advisors

The economic forecasts of mainstream economists are quite positive, if not enirely optimistic, reflecting the current data. Should we not take heart from that? Alas, no. This week we look at some of our recent musings on that topic, triggered by a letter from a very serious economist who took umbrage when I wrote disparagingly about economists and forecasting a couple months ago.

2013-06-08 00:00:00 Banzai! Banzai! Banzai! by John Mauldin of Millennium Wave Advisors

In practice it may be harder for Japan to grow and generate inflation than it might be for other major nations. Today we’ll focus on Japanese demographics. While the letter is full of graphs and charts, it does not paint a pretty picture. The forces of deflation will not go gently into that good night.

2013-04-20 00:00:00 Austerity is a Consequence, not a Punishment by John Mauldin of Millennium Wave Advisors

Austerity is a consequence, not a punishment. A country loses access to cheap borrowed money as a consequence of running up too much debt and losing the confidence of lenders that the debt can be repaid. Lenders don’t sit around in clubs and discuss how to “punish” a country by requiring austerity; they simply decide not to lend. Austerity is a result of a country’s trying to entice lenders into believing that the country will change and make an effort to restore confidence.

2013-03-21 00:00:00 PMI What Does It Really Tell Us? by Adam Peck of Heartland Advisors

Recently we’ve been seeing positive readings from the Purchasing Managers’ Index (PMI), news that may seem as though it would be good for all stocks. In fact, though, a look at the performance of the S&P 500 and the PMI since 1995 shows that this is not necessarily the case.

2011-10-13 00:00:00 Why Is Financial Market Volatility Increasing? by Alan A. Fustey of Index Wealth Management

While price movements in financial markets are largely unpredictable, there are periods where volatility tends to cluster. The flash crash shows that high frequency trading does have the potential to heighten volatility given the right circumstances, however knowing when these circumstances are present can only be detected in hindsight. There are structural changes that are occurring in the global economy, technology and securities trading that have the potential to make the recent increase in market volatility a new permanent standard.

2010-03-26 00:00:00 narrative power by tom brakke of the research puzzle

The investment world illustrates the power of narrative. People up and down the informational food chain use stories to enlighten and deceive. For stock investors, many stories originate with companies and their officers, who learn that crafting a narrative that puts everything in the best light is part of their leadership role. Sell side analysts sometimes reinforce those messages by making the telling of certain stories part of their brands. Investors must therefore read widely and read well, and realize that understanding comes from taking nothing for granted and questioning everything.

2010-01-25 00:00:00 What Husbands and Wives Search for on Google by Dan Ariely of Predictably Irrational

?A few days ago we looked at some telling search suggestions by Google when it came to what boyfriends and girlfriends searched for in their relationships. On the heels of this insight, I wanted to se


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