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

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2014-10-31 00:00:00 Financial Markets Review Third Quarter 2014 by Team of AMG Funds

Similar to earlier this year, the third quarter featured further evidence of a multi-speed economic recovery across the globe. Central banks reacted in a less-than-coordinated fashion compared to years prior, with the European Central Bank (ECB) and the Bank of Japan (BOJ) loosening monetary policy while the U.S. Federal Reserve (the Fed) retained more of its status quo as detailed further here.

2014-10-28 00:00:00 Under the Magnifying Glass by Brian Andrew of Cleary Gull

Recent market volatility has investors trying to sort through the little things to determine what is most important to the future of asset prices. Securities markets move up and down on a daily basis based on many different factors, some more relevant than others. The markets during October have proven that little things can lead to greater volatility as investors attempt to sort out the most relevant facts from those with less meaning. Our objective, and that of our investment managers, is to sift through these details to discern what has relevance and what is noise during the trading day.

2014-10-09 00:00:00 The Fed's Invisible Hand, and Other Things to Think About by Lance Roberts of Streettalk Live

I have not been a huge advocate of the Federal Reserve's QE programs for the simple reason that outside of inflating asset prices, it has done nothing for the broad swath of the American economy.

2014-10-01 00:00:00 Markets’ Rational Complacency by Nouriel Roubini of Project Syndicate

A century ago, financial markets priced in a very low probability that a major conflict would occur, blissfully ignoring the risks that led to World War I until late in the summer of 1914. Back then, markets were poor at correctly pricing low-probability, high-impact tail risks; they still are.

2014-09-22 00:00:00 A Lack of Surprises Helps Equity Markets Make Gains by Robert Doll of Nuveen Asset Management

Equity markets rose again last week, with the S&P 500 Index climbing 1.3% and reaching another record high. Bond yields and the U.S. dollar drifted higher, while emerging market equities and commodities struggled. Two major events that resulted in a continuation of the status quo helped market sentiment.

2014-09-19 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The choice for Europe: coming together or breaking apart; Scotland votes nay; The dollar has been the beneficiary of global uncertainty

2014-09-03 00:00:00 International Developed and Emerging Markets by Riad Younes of R Squared Capital Management

This commentary explores what the author believes to be the best opportunities in international investing along with challenges facing investors in developed and emerging markets.

2014-05-16 00:00:00 Old Turkey by Jeffrey Saut of Raymond James

I revisit the Old Turkey story this morning, which I first read in the classic book Reminiscences of a Stock Operator, about the escapades of Jesse the boy plunger Livermore, because of the reference I made to him last week that drew so many questions. The wisdom of Old Turkey is as good today as it was when first published in 1923. The problem with most investors today is that they have never experienced the 1923 1929, the 1946 1964, or the 1982 2000 secular bull markets.

2014-04-15 00:00:00 Equity Market Insight by Thomas Faust, Jr. of Eaton Vance

After a powerful rally in 2013, the first quarter of 2014 saw the bull market demonstrate a measure of resilience in the face of several headwinds. In the latter half of January, stocks fell sharply on emerging-market concerns, with volatility spiking to more "normal" post-financial crisis levels. The market bounced back strongly in February and went on to record a new all-time closing high on March 7. Performance was choppy in the final few weeks of the quarter, as investors digested mixed economic reports, geopolitical issues and the latest U.S. Federal Reserve (Fed) meeting.

2014-01-23 00:00:00 Economic Growth is Likely to Improve in 2014 by Derek Hamilton of Ivy Investment Management Company

We believe a global economic upturn is likely in 2014, although the overall growth rate will remain sluggish. We think developed countries will show the largest improvement, which in turn will help support growth rates in emerging markets.

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.

2013-10-30 00:00:00 Getting Back into Value Equities by Kevin Simms of AllianceBernstein

It finally feels like a great time to be a value investor again. After several challenging years, market conditions have become much more conducive to finding undervalued, controversial stocks with long-term payoff potential. Even after this years equity-market rally, we think the value rebound is just beginning.

2013-10-29 00:00:00 Defining the EM Corporate Bond Opportunity by Sponsored Content from Loomis Sayles (Article)

Finance is a numbers business. Investors study prices, yields, rates of return. However, when it comes to sizing up emerging markets, we think they should also pay attention to semantics. In the past, terming a country “emerging” made it synonymous with low credit quality and higher risk. But today, many emerging markets boast strong credit profiles while parts of the developed world buckle under heavy debt loads.

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.

2013-10-02 00:00:00 And That's The Week That Was by Rob Brounes of Brounes & Associates

Move over Ben BernankeTed Cruz has the floor. (Somehow investors seem more interested when Dr. B speaks.) With politicos facing debates on debt ceilings and budget funding, few have confidence that they can act reasonably and with compromise (and the Cruz debacle did not help matters). Stocks fell over five consecutive days as portfolio managers set up positions for the next quarter. Labor and manufacturing releases highlight a hectic week on the economic calendar, but shenanigans from DC may steal the headlines.

2013-09-13 00:00:00 Waiting for Clarity From the Fed and Congress by Team of Northern Trust

U.S. economic growth averaged roughly 2.0% in the first half of the year and the average gain of real gross domestic product (GDP) during the entire 16-quarter economic recovery is 2.2%. Real GDP is projected to grow close to this trend in the second half of the year.

2013-07-10 00:00:00 3 Risks that Could Derail the Market Rally by Russ Koesterich of iShares Blog

Stocks can withstand moderate rate increases, as we saw last Friday when they rallied despite a sell-off in bonds. But Russ K warns that they may not withstand these three other scenarios.

2013-04-30 00:00:00 Beyond Gold: 4 Reasons to Think Energy by Russ Koesterich of iShares Blog

While the sell-off in gold has dominated headlines lately, another commodity oil has also experienced price declines in recent months. But despite crudes drop, Russ is still a fan of energy stocks for four reasons.

2013-02-05 00:00:00 The 2030 Outlook by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

Over the next several weeks we will look into the more distant future, to the year 2030. We will explore the long-term strategic alternative world development scenarios as laid out by the National Intelligence Council (NIC) and present our views regarding the developments. The NIC forecasts the likely paths that are either currently underway or are forecast to occur in the future. The NIC projects four possible global political and economic states based on these expected trends.

2013-01-31 00:00:00 Signs of a Solid 2013 for Stocks by Milton Ezrati of Lord Abbett

Yield spreads versus bonds indicate that stock valuations have considerable upside.

2013-01-28 00:00:00 Economic Insights: Signs of a Solid 2013 for Stocks by Milton Ezrati of Lord Abbett

Yield spreads versus bonds indicate that stock valuations have considerable upside. Earlier in this recovery, when earnings were growing very strongly, consensus concerns about equities cited the danger of an earnings slowdown. Those expressing this concern pointed out, that such a slowdown would occur inevitably as the recovery matured, especially with economic growth proceeding at such a subpar rate. What seems to have escaped notice is that the slowdown already occurred in 2012 and that the stock market offered good returns despite it.

2012-12-18 00:00:00 Jeremy Siegel on 'Dow 15,000' by Robert Huebscher (Article)

Jeremy Siegel was one of very few individuals to have correctly predicted the strong performance of the equity markets over the last year. The Wharton professor and author of the renowned book, Stocks for the Long Run, forecasts continued strong performance for the year ahead.

2012-12-18 00:00:00 Pulling Back the Lens in Emerging Markets by Western Asset Management (Article)

Emerging markets remain resilient, according to Western Asset Portfolio Manager Rob Abad. But in the face of so much global uncertainty, investors would be wise to consider the latest trends and dynamics impacting this maturing asset class.

2012-11-27 00:00:00 Ten (Near?) Certainties to Invest Around by David Rosenberg (Article)

The ten key trends that should guide your investment decisions.

2012-11-13 00:00:00 Emerging Markets: Maintaining Perspective by Robert O. Abad (Article)

In this Q&A, Western Asset Portfolio Manager Robert Abad discusses the latest dynamics and trends within emerging markets (EM). Although EM continue to demonstrate resiliency, Mr. Abad believes that given the amount of global uncertainty today, it is important that investors evaluate opportunities alongside a manager equipped to guide them through the risks and rewards of this evolving asset class.

2012-10-30 00:00:00 The Yield Hunt by Michael Lewitt (Article)

The high-yield market is not in danger of imminent collapse as some have argued. As long as defaults remain relatively low, and interest rates remain invisible, investors will continue to chase yield. But a few things could cause a sharp sell-off in the near future.

2012-09-18 00:00:00 Campaign Rhetoric and Our Energy Future by Michael Edesess (Article)

At their respective conventions, both President Obama and Mitt Romney spoke to a centrally important topic for America and the world: energy. Their positions ? political posturing aside ? are broadly similar. But rather than a coherent, sustainable vision for the energy future of the United States, both men's rhetoric reflected the usual exercise in political base-touching, apple pie-polishing, and third-rail avoidance. And two important, perhaps crucial, pieces of the energy puzzle were hardly mentioned at all.

2012-07-17 00:00:00 Breaking Bad by Michael Lewitt (Article)

With our largest business and government institutions committing every conceivable act of legal or moral anomie, we have every right to ask who is going to protect the rest of us from those who have been entrusted with so much power and influence. The institutions that were supposed to be the lifeblood of our economy are the same institutions that inflicted the greatest harm on society. When the family has to be protected from the man who is supposed to protect the family, the family is in serious trouble.

2012-06-26 00:00:00 A Top Analyst: North America Heading to Energy Independence by Robert Huebscher (Article)

Ed Morse, a managing director of Citigroup Global Markets, said last week that by the end of this decade the US and Canada will have a surplus of oil, leaving it with 'no room for imports.' But the longer-term picture is far less certain, as extraction moves from conventional wells to newer sources, such as deepwater fields and shale-based oil.

2012-04-03 00:00:00 Fewer, Richer, Greener: Why Jeremy Grantham is (Partly) Wrong by Laurence B. Siegel (Article)

Is the human experience getting better or worse? This is a big question investors are rarely asked to confront, yet its answer has profound consequences for market returns.

2012-03-27 00:00:00 Questions of Character by Michael Lewitt (Article)

As a long-time investor in leveraged companies, the character of management has long informed my decisions of where to direct capital. There is no margin of safety when you invest in a company managed by dishonest or reckless managers, or a management team that has a history of placing its own interests before those of its shareholders or creditors. The same is true of choosing an investment manager.

2012-01-24 00:00:00 Beyond Reinhart and Rogoff by Robert Huebscher (Article)

My article two weeks ago, The Misreading of Reinhart and Rogoff, elicited a number of challenges, both from those who argued that excessive debt imperils our economic growth and from those who claimed that my proposed solution was unworkable. Among those challengers was Lacy Hunt, who raised several valid concerns. I will explain why I disagree with Hunt and others, and why the dollar's position as the reserve currency increases our borrowing capacity. But our ability to borrow cannot be a license to spend unwisely, and I will conclude by expanding on the policy choices the US must pursue.

2011-11-29 00:00:00 The Investment Case for Israel by Jamia Jasper (Article)

What country went into the 2008-2009 recession in a stronger position and exited sooner than any western nation? Whose stock market has outperformed the MSCI EAFE over the past 10 years?

2011-11-29 00:00:00 Sometimes We Lose Perspective by Scott A. MacKillop (Article)

It's been a rough ride lately for investors. Looking back over the course of my lifetime, however, what has been particularly exceptional is not recent market swings - these come and go - but rather the return one would have earned if they had been continuously invested in the stock market over the past 60-plus years.

2011-11-01 00:00:00 What, Me Worry? by Scott A. MacKillop (Article)

As we gnash our teeth over the latest crisis du jour let's remember that difficulties do not, ultimately, prevent progress. On the contrary, over my lifetime progress has continued unimpeded despite a more or less constant stream of difficulties.

2011-09-13 00:00:00 A Response to 'A Winning Endgame' by Guy Cumbie (Article)

A Winning Endgame, Robert Huebscher's review of John Mauldin's book Endgame, made some highly problematic claims about our energy usage. Moreover, Huebscher's claim is unfounded that an energy policy, such as the cap-and-trade policy he recommended, is the right step toward solving our economic crisis.

2011-07-12 00:00:00 The Titanic Has Sailed by Michael Lewitt (Article)

It was entirely predictable that the U.S. equity market would rally on the news that Greek would not default this month, but it does little to convince me that the long-term outlook for European sovereign debt or the global economy has improved. Markets - particularly the equity markets - are trying to pretend that the global economy is experiencing a self-sustaining recovery. A hard look at the economic numbers would tell an objective observer that no such recovery is occurring.

2011-05-17 00:00:00 The Smooth Illusion by Michael Lewitt (Article)

In retrospect, the Federal Reserve's interminable zero-interest policy and its quantitative easing programs are likely to be seen not only as ineffective but damaging to the prospects for sustainable long-term economic growth. A number of asset classes are beginning to exhibit bubble-like behavior, something that would be far less likely to occur were interest rates normalized.

2011-05-03 00:00:00 Gary Shilling - Five Things that can Derail the Recovery by Robert Huebscher (Article)

Die-hard deflationists - those who foresee a continued bull market in bonds - are so few in number these days they could all share an elevator, according to Gary Shilling. One is Gluskin Sheff's David Rosenberg, whose views are considered elsewhere in this issue. But the loudest such voice belongs to Shilling himself, who has advocated for a long position in Treasury bonds continuously since 1980, a stance that has always proved prescient so far.

2011-05-03 00:00:00 Martin Barnes - How Safe is the Equity Market? by Robert Huebscher (Article)

When members of the Federal Reserve Board seek counsel on tough issues, one of the economists to whom they turn first is Martin Barnes. Speaking publicly last week, Barnes addressed two themes in the US economy and markets: the potential for a sustained bear market in equities and the likelihood of higher taxes. These two distinct questions are both critically important to investors.

2011-04-12 00:00:00 Been Down So Long It Looks Like Up To Me by Michael Lewitt (Article)

"The budget crisis is a crisis of leadership," writes Michael Lewitt in the latest issue of the HCM Market letter. "There is no intellectual mystery involved in cutting the budget - entitlement spending must be reduced through the adoption of tighter eligibility standards... The markets will also have to evaluate whether Congress and the Obama administration can make any meaningful progress on budget reform, which will mean tackling the entitlement issue. The failure to rein in federal deficits remains a profound threat to the dollar and interest rates."

2011-04-05 00:00:00 The Future of Investment Manager Due Diligence (and a Look Back at Q1 Performance) by Ron Surz (Article)

Despite the continuing global financial crisis, the uprisings in the Middle East and the Japanese disaster, global stock markets delivered positive results in the first quarter of 2011, as described in this capital market review. In the second part of the article, you'll discover what due diligence procedures need to change and why.

2011-03-15 00:00:00 Mason Hawkins and Staley Cates on Today?s Opportunities for Value Investors by Robert Huebscher (Article)

Southeastern Asset Management's Mason Hawkins and Staley Cates, two of today's most respected value investors, discuss their portfolio and the principles behind their Graham and Dodd methodology. They explain why they like certain commodity-based companies and why they disagree with Bruce Berkowitz on the opportunities in the financial sector.

2011-03-15 00:00:00 Running on Empty by Michael Lewitt (Article)

Despite the increasing undercurrent of negative news creeping into the financial markets, the stock market remains strong. HCM expects equities to continue to perform well for the foreseeable future (i.e. through the end of June) although most of this letter will discuss the reasons why it shouldn't. In some ways, this market is a lot like Charlie Sheen. It pretends to have tiger blood and the powers of a warlock, but deep inside it is suffering from an addiction to a substance (i.e. debt) that will ultimately kill it.

2011-03-08 00:00:00 Ed Hyman: The Key Threat to Economy Recovery by Robert Huebscher (Article)

Ed Hyman is not worried about China, quantitative easing or fiscal deficits. Equity market performance this year will be strong, he predicts, and the US economic recovery will proceed. But there is a caveat in his outlook ? and it is an immense one.

2011-02-22 00:00:00 Are You Ready to Lose Control? by Justin Locke (Article)

We view control the same way we view pregnancy - it's an all-or-nothing condition. Either you are in control, or everything is out of control. We would all be wise to rethink this - to look at how to handle and even embrace some lack of control.

2011-02-15 00:00:00 The Stuxnet Paradigm by Michael Lewitt (Article)

Michael Lewitt discusses the situation in Egypt, the economy, rising risk appetites in the market, sovereign debt and municipal bonds. 'It might be very easy,' he writes, 'to be impressed by the 'two years and thousands of man hours' that Ms. Whitney spent researching the fiscal condition of the 15 largest states. What in the world required so much time and effort? It shouldn't have taken nearly so long to determine that these states are in severe financial trouble and that their options for dealing with it are limited.

2010-09-28 00:00:00 A Better Alternative - Natural Resource Equities by RS Investments (Article)

Investors look to the commodity market to provide three primary benefits: portfolio diversification, inflation protection, and equity-like returns. However, empirical data shows that over the last decade, shifts in underlying fundamentals have undermined the role which commodities are expected to play in a diversified portfolio, particularly relative to natural resource equities. RS Investments reviews the return streams generated by both commodities and natural resource equities in the context of the benefits expected from each investment option. We thank them for their sponsorship.

2010-07-13 00:00:00 Deficits Monetary and Moral by Michael Lewitt (Article)

"The word 'deficit' has come to epitomize not only our economic dilemmas but also our moral and intellectual failures to address them in an era that should be boasting of new breakthroughs in the social and physical sciences," writes Michael Lewitt in the latest installment of his HCM Market Letter, Deficits Monetary and Moral. "Instead, our ability to solve complex problems is weighed down by flawed and corrupted government processes and the lack of courage to forthrightly change them."

2010-06-01 00:00:00 Europe: Value or Value Trap? by Dan Trosch, CFA (Article)

European equities seem much cheaper than in the US, says Dan Trosch of Fortigent in this guest contribution. Europe trades at a 26% Price to Book discount and a 20% Price to Cash Earnings discount to the US. Some European industries and stocks are deservedly cheap and value traps; other industries and stocks are attractive and will benefit from global growth in exports and other macro trends.

2010-04-13 00:00:00 Shameless by Michael Lewitt (Article)

The fiscal train wreck in the United States has not been set back on the tracks, and the global imbalances that led to the financial crisis have not gone away. Quite to the contrary, writes Michael Lewittin Shameless, the latest edition of his HCM newsletter. In fact, if progress isn't made with respect to these issues, and if intelligent financial reform is not enacted, future instability is guaranteed.

2010-01-05 00:00:00 A Lesson from Lawrence of Arabia by Dan Richards (Article)

Everyone has a favorite movie scene, and Dan Richards' comes from his all-time favorite movie, Lawrence of Arabia. Dan explains how the lessons from that classic movie apply to the advisory profession.

2009-12-08 00:00:00 Dubai?s Moon Shot by Vitaliy Katsenelson (Article)

Dubai is like NASA; both have proven that anything is possible when you ignore economic costs. As Vitaliy Katsenelson writes, many technological discoveries were made in the process of putting a man on the moon; but the project did have, and was expected to have, a negative return on capital.

2009-12-01 00:00:00 Allen Sinai: Jobless Recovery and the Failure of Current Economic Policies by Robert Huebscher (Article)

As the Democratic leadership in Congress has looked for ways to simultaneously create jobs and reduce the deficit, a key person they have turned to and continue to rely on is Allen Sinai. Sinai now fears the US is in the "mother of all jobless recoveries" and that the economic policies of the Obama administration are not working.

2009-10-20 00:00:00 Finance After Auschwitz by Michael Lewitt (Article)

We are again privileged to provide an excerpt from Michael Lewitt's HCM Market Letter. In this installment, Finance After Auschwitz, Lewitt examines the dangers posed by Iran, whether the market is overvalued, the future of securitization, and what should be done about the private equity industry.


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