More on Related Themes
2015-09-10 00:00:00 Consulting Our Technical Playbook by Burt White of LPL Financial
When markets are tough, emotions can take over. The natural emotional response to sharp stock market declines is to sell. In periods like these, especially when the media sensationalize every gloomy angle as they tend to do, an objective look at the data can be reassuring and help us make better investment decisions.
2015-09-09 00:00:00 Technically Speaking: A Sucker's Rally? by Lance Roberts of Streettalk Live
In last week's technical review "The Mark Of A Bear," I stated: "The Bulls have remained firmly in charge of the markets as the reach for returns exceeded the grasp of the underlying risk. It now seems that has changed. For the first time since 2007, as we see initial markings of a potential bear market cycle." The problem in stating that we MAY be seeing the initial markings of a potential bear market cycle is that individuals assume this means the markets will crash immediately. When such an outcome does not occur, the analysis is presumed wrong.
2015-08-13 00:00:00 What We Can Learn by Going Back to School by Burt White of LPL Financial
The summer has flown by and some children are already going back to school this week. The back to school shopping session is considered the second most important selling season for retailers (after the Christmas/winter holidays), which we think is a good reason to check in on the health of the U.S. consumer and provide our latest thoughts on the consumer discretionary sector. Expectations for this season are low, but several consumer spending tailwinds suggest the sector may be poised to outperform over the rest of the 2015.
2015-07-07 00:00:00 Weighing the Week Ahead: Will FedSpeak Interrupt the Lazy, Hazy, Crazy Days of Summer? by Jeff Miller of NewArc Investments, Inc.
In one sense, the week ahead should be a quiet, dull semi-vacation. As Nat King Cole explained, the Lazy-Hazy-Crazy days of summer – pretzels, beer, and bikinis that never got wet. It is the lull before earnings and includes a light economic calendar. Will the A-Team need to return from the beach because of Greece? Or will it be a quiet week, disturbed only by an avalanche of FedSpeak and consequent punditry? One way or another, I think we will (finally) put the Greek drama behind us and resume the familiar debate about the Fed.
2015-06-03 00:00:00 Global Tactical Asset Allocation: Just the Facts (Part 1) by Adam Butler, Michael Philbrick, Rodrigo Gordillo of BPG & Associates
We recently came across a couple of articles making the sensational claim that TAA is nothing more than a repackaged and dressed-up version of market timing. Both articles – and others, we’ve subsequently learned – point to a Morningstar study showing that TAA has underperformed the Vanguard U.S. 60/40 balanced fund over the past few years.
2015-05-28 00:00:00 The Importance of Liquidity by Byron Wien of Blackstone
Since the axiom “Don’t fight the Fed” came into common parlance, we have all been aware that central bank policy is an important component of market performance. Most of us started out as security or business analysts and believed that fundamental factors like the pace of the economy, earnings growth and interest rates were the drivers of equity values.
2015-05-11 00:00:00 Tracking the Market with Social Media by Blair Jensen of Trade Followers
I’ve posted warnings of a short term top for the S&P 500 Index (SPX) over the past couple of weeks and since that time the market has been choppy. I’m now seeing evidence of sentiment from the Twitter stream that indicates SPX is due for a move higher. The evidence suggests that SPX should break out of its recent range. The first clue comes from 7 day momentum which has moved down into oversold territory.
2015-05-07 00:00:00 For trading, not eating! by Jeffrey Saut of Raymond James
Trading sardines indeed, except I have seen a lot of folks attempting to trade this market over the past few months all to no avail. What has typically happened is that one day they are able to make some money, but the next day they give that profit back.
2015-05-07 00:00:00 Emerging Markets May Make a Good Draft Pick to Add to Portfolios by Burt White of LPL Financial
The evaluation process NFL football teams go through to prepare for the NFL draft, which took place this past weekend, is not unlike the investment decision-making process.
2015-04-23 00:00:00 Tax Receipts Flash Economic Warning Sign by Lance Roberts of STA Wealth Management
With "tax day" now firmly behind us, it is expected that 2015 will show a record level of tax collections. This is a good thing, right? Maybe not.
2015-04-22 00:00:00 Sizing Up Small Caps by Burt White of LPL Financial
The Russell 2000 Index hit a fresh all-time high last week (on tax day, April 15, 2015) and has outpaced large caps by 205 basis points (2.05%) year to date. Although valuations are on the high side, the factors that have driven recent small cap strength, in our view, remain largely intact. Small cap technicals appear bullish, with positive relative strength and an upward sloping 40-week moving average.
2015-04-20 00:00:00 Market Rules to Remember by Mark Ungewitter of Charter Trust Company
A few years ago, I participated in a panel discussion at the 50th Annual Contrary Opinion Forum in Vermont. One of my fellow panelists, Walter Deemer of Deemer Technical Research Inc., has been a cornerstone of institutional market strategy since the early 1960’s and is this year’s recipient of the MTA’s prestigious annual award.
2015-04-06 00:00:00 Weighing the Week Ahead: Correction Looming? by Jeff Miller of New Arc Investments
After a week loaded with economic data there are plenty of fresh economic worries. In addition, the Fed seems ready to act in spite of some weak data. This means that good news is (finally) good news, and bad news will be bad. For economic and market skeptics, it signals a market shift that they see as long overdue.
2015-04-05 00:00:00 Weighing the Week Ahead: Correction Looming? by Jeff Miller of New Arc Investments
No one has a good, verifiable, real-time track record at predicting small corrections. Meanwhile, many investors get sidelined because they read an article or saw a chart suggesting that “the big one” was right ahead. Some people have been waiting for years for the correction so that they can get back in the stock market. Even when the correction finally comes they will be losers – and that assumes the ability to pull the trigger when things look bad!
2015-04-03 00:00:00 The Four Questions by Rob Isbitts of Sungarden Investment Research
So with a nod to that annual Passover ritual, we present the financial markets’ current “Four Questions.” That is, why is this market different from all other markets?
2015-04-02 00:00:00 Market's March Madness by Burt White of LPL Financial
With the NCAA Final Four set, we share our own Final Four for stock market investing: economy, earnings, technicals, and valuations. With valuations above average and the economy slowing during first quarter of 2015, our championship game comes down to earnings and technicals. Based on our assessment of these four factors, we expect stock market investors will be “cutting down the nets” due to potential mid- to-high-single-digit stock market gains in 2015.
2015-03-25 00:00:00 The Dollar's Ripple Effect by Burt White of LPL Financial
In technical analysis, “intermarket analysis” looks at the way in which various markets interact. Intermarket analysis primarily looks at four market sectors: currencies, commodities, bonds, and stocks. From a technical analyst’s perspective, focusing our attention on only one market without considering what’s happening in the others leaves us in danger of missing vital directional clues and potential profits. The dollar, which has appreciated 24.4% since June 30, 2014 (as of March 19, 2015), has had an unusually strong intermarket effect of late.
2015-03-05 00:00:00 Another Bubble? by Burt White of LPL Financial
The Nasdaq Composite just hit 5000 today as this report was going to press and is nearing its all-time record closing high of 5048. Even with the Nasdaq at 5000, we do not believe stocks have reached bubble territory. The Nasdaq has a much stronger foundation today of valuations, profits, and sentiment.
2015-02-19 00:00:00 Energy Sector Outlook: What We Are Watching by Burt White of LPL Financial
No sector is getting more attention right now than energy. Market participants are attracted to the potential upside after both oil and the energy sector suffered substantial declines in recent months. Many see the sector as cheap, something that is not easy to find these days in the U.S. equity market. We drive by gas stations every day where we see prices have been cut in half, serving as a constant reminder of how cheap oil is. In this commentary, we discuss what we are watching to assess the opportunity in energy.
2015-02-04 00:00:00 The Absolute Return Letter - January 2015 by Team of Absolute Return Partners
In large parts of the financial community there is a strongly held belief that the problems which caused the credit crisis back in 2008-09 have never been properly addressed, causing many to suspect that it is only a matter of time before the ‘end game’ is upon us – the credit crisis Mk. II so to speak. I will in the following pages look at various ways the end game might unfold but, before I do so, I shall return to one of the subjects I discussed in the January letter – the end of cheap oil – which caused a flurry of comments and questions.
2015-01-29 00:00:00 Momentum X 2: Unleashing the True Power of Momentum by Gordon Nelson of Keystone Wealth Advisors
Momentum is one of the most researched market anomalies and has become widely accepted and used in a variety of ways for investment management. When used in practice is it most commonly referred to as relative strength or relative momentum. What happens if we combine the power of relative momentum with absolute momentum?
2015-01-27 00:00:00 The Warren Buffett Way: High Quality Stocks in Emerging Markets by Baijnath Ramraika, CFA® and Prashant Trivedi, CFA® (Article)
A simple three-factor quantitative process for selecting emerging-market high-quality stocks outperforms the publicly traded benchmarks and does so with lower risk.
2015-01-09 00:00:00 Pie in the Sky? by Team of Absolute Return Partners
January each year brings with it a host of forecasts, many of which are 'pie in the sky' - silly predictions on equity markets, interest rates and currency movements. We are not in that game, but this is the first time we have written a letter in January. Why? Because we think investors should be focusing on longer term structural trends when analysing the future.
2015-01-07 00:00:00 Action and Reaction by Team of Heartland Advisors
A summary of Newton?s third law may best describe the effects of the macro events that surrounded 2014 and brought it to a close: Nothing happens in a vacuum. The trick is to anticipate what the consequence of any action might be.
2015-01-04 00:00:00 Why the World Needs the US Economy to Struggle by John Mauldin of Mauldin Economics
In this weeks letter, my associate Worth Wray explores what a rising dollar means for emerging markets and what central banks are likely to do in response. Can they smooth the ride, or will it be the worlds scariest roller coaster? This letter will print long because of the number of fabulous charts Worth provides. I might make a brief comment or two at the end. Heres Worth.
2014-12-22 00:00:00 The US Dollar and the Cone of Uncertainty by John Mauldin of Mauldin Economics
For the past two letters weve been looking at the global scene and trying to figure out which issues will help us outline scenarios for 2015. We finish the series today by looking at the impact of the dollar bull market on the probabilities for various 2015 developments.
2014-12-07 00:00:00 Macroeconomics Finally Gets Interesting by John Mauldin of Mauldin Economics
2015 may be the year that macroeconomics really becomes interesting again, if it hasnt already. After a long period of relatively coordinated central bank policies and remarkably low volatility, the macro scene is becoming more dynamic. Thats great for those who live and die by dramatic long-term shifts in global markets, but it should be terrifying for emerging-market policymakers, currency carry traders, Texas oil men, and, frankly, the average investor. King Volatility is back on his throne.
2014-12-06 00:00:00 Dont Let Market Motion Sickness Keep You From Missing the Boat by Frank Holmes of U.S. Global Investors
Despite all of the good news, the recent threat of market volatility, which weve seen plenty of in commodities and emerging markets, seems to have pushed close-to-retirement folks away from equity securities. The August and October downturns, not to mention the decline in gold and oil prices, have understandably heightened consumer fears.
2014-12-06 00:00:00 Five Things To Ponder: Unstoppable Force Paradox by Lance Roberts of Streettalk Live
As we enter the final month of the year, the markets advance got me thinking about something known as the "Unstoppable Force Paradox." While you may not be familiar with the name, you will certainly know the definition which questions "What happens when an unstoppable force meets an immovable object?"
2014-11-21 00:00:00 Emerging Markets Opportunity Still Emerging by Burt White of LPL Financial
We believe emerging markets (EM) fundamental conditions are set for improvement in 2015, based on our outlooks for economic growth, earnings, and policy. Valuations are compelling and EM may be situated to recapture some of their relative losses from a technical perspective, particularly in Asian markets. However, somewhat mixed fundamental and technical pictures suggest a better opportunity may be forthcoming
2014-11-10 00:00:00 Dollar, China and Brazil In The Short Or Medium Term by Sebastiao Buck Tocalino of SBTCapital Clube de Investimento
The Dollar Index is approaching two important and converging barriers for its recent uptrend. The Shanghai Composite Index is also bordering the top of its channel. Brazil lost a good chance at recent elections to recycle its unsuccessful policies and government. But technical analysis may show some relief for optimism in Brazilian stocks and the EWZ ETF.
2014-11-06 00:00:00 3 Things Worth Thinking About, Including the Odds of a Suckers Rally by Lance Roberts of Streettalk Live
Each week in my weekly newsletter I do a complete overview on major markets, sectors and other market areas such as interest rates, gold and oil. I bring this up because the recent melt-down in oil and energy related stocks is something that I warned about in early August of this year.
2014-10-13 00:00:00 Inconceivable by Lance Roberts of Streettalk Live
The point is that there are many risks investors should not ignore. Making up losses is much harder than reinvesting stored capital once a clearer picture emerges. While the current belief that a correction of magnitude in the markets is "inconceivable," I am not sure that word means what they think it means.
2014-09-25 00:00:00 Dont Fight the ECB? Part 2 by Burt White of LPL Financial
Last week we discussed why buying European stocks now, following the recent stimulus announced by the ECB, is very different from buying U.S. stocks during periods of Fed stimulus in recent years. This week we take a deeper dive into the investment opportunity in Europe and evaluate fundamentals, valuations, and technicals. We recommend that investors fight the ECB. We do not believe the additional stimulus is enough for us to recommend European equities over U.S. equities at this time.
2014-07-30 00:00:00 Trains and Boats and Planes? by Jeffrey Saut of Raymond James
hose of you who know me know that I have had a love affair with boats ever since I was a kid. In my youth it was speedboats on various lakes in Michigan. In my teens, and into my forties, it was sailboats combined with an occasional trawler. In later life, however, it has been strictly powerboats.
2014-07-28 00:00:00 Are Interest Rates Too Low? by Scott Brown of Raymond James
In her monetary policy testimony to Congress, Federal Reserve Chair Janet Yellen offered no new clues regarding when the central bank will begin raising short-term interest rates. The Fed has been criticized for being behind the curve on inflation and for fueling bubbles. Neither criticism is right.
2014-07-19 00:00:00 The Municipal Bond World, According to John Derrick by Frank Holmes of U.S. Global Investors
I sat down with Director of Research John Derrick, who also manages our Near-Term Tax Free Fund (NEARX), to get his thoughts on interest rates, the bond market and what investors should pay attention to as we move into the second quarter of 2014.
2014-06-05 00:00:00 The Investor Screwtape Letters by William Smead of Smead Capital Management
We at Smead Capital Management have been discussing some of the follies common to human nature and what we see as some pervasive trends in the investing world. These conversations got us imagining what C.S. Lewiss, The Screwtape Letters, might sound like if they were applied to todays investment environment. The satirical letters are written by an advice-giving bureaucrat in Hell named Screwtape, to his nephew Wormwood, a young demon who is learning how to lead humans astray. Taking some liberty with Lewiss work, we present what we believe Screwtape might say if he were tr
2014-05-27 00:00:00 Defensive Position Rotation: Achieving Financial Goals with Less Volatility by Dale W. Van Metre, Ph.D., CRPC®, APMASM (Article)
Defensive position rotation is an alternative to MPT. It is a portfolio-construction philosophy that adapts to changing market conditions and can increase risk-adjusted returns over time.
2014-04-02 00:00:00 The Treasury Yield Curve Starts its Tightening Process by Martin Pring of AdvisorShares
Martin is the Investment Strategist to the AdvisorShares Pring Turner Business Cycle ETF (DBIZ)?and since 1984, he has published the ?Intermarket Review,? a monthly global market report revered among analysts and market technicians. Here, Martin shares his latest technical analysis.
2014-02-20 00:00:00 Peer Group Analytics and Valuation, an Abstraction by David Kleinberg of Universal Orbit
Peer group analytics and valuation are essential components when assessing the optimal risk-return equation. As opposed to an efficient frontier populated with the regressed correlated expected future returns of conventional securities or asset classes perhaps one determined by business segment operations is more advantageous.
2014-02-12 00:00:00 Grey Owl Capital?s Third Quarter Letter by of Grey Owl Capital Management
2013 was a banner year for the US stock market. Despite equities? meager fourteen-year record of accomplishment, investors, broadly speaking, are limited to short-term memory. Last year?s performance was enough to generate significant enthusiasm for stocks. We continue to believe, the current environment warrants a more balanced approach.
2014-01-23 00:00:00 EPV: Establishing Predictive Value (i.e., Demand Characteristics) by David Kleinberg of Universal Orbit
EPV: Establishing Predictive Value (i.e., Demand Characteristics) is designed as a complement to quantitative portfolio strategies and fundamental research. Continuing the thread from EPV:RO, tested is the premise of structural bias in performance benchmarks as determined by third party data vendors with implied effects on peer group analytics and valuation.
2014-01-03 00:00:00 Is it Lift off Time for Commodity Prices? by Martin Pring of AdvisorShares
Martin is the Investment Strategist to the AdvisorShares Pring Turner Business Cycle ETF (DBIZ) - and since 1984, he has published the "Intermarket Review," a monthly global market report revered among analysts and market technicians. Martin shares his technical analysis on short and long term market momentum and the potential effect for commodity prices.
2013-12-16 00:00:00 Absolute Return Letter: Squeaky Bum Time by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners
QE has led to asset price inflation. That much we established in the November Absolute Return Letter. In this months letter we go one step further and look at whether we are now in bubble territory. Considering the strong bull-run we have experienced in 2012-13 it is perhaps surprising to learn that, in a historical context, it is not an outsized rally, nor are equity markets - with the possible exception of the United States - particularly expensive.
2013-12-13 00:00:00 Will Apple Follow the Microsoft Script? by Mark Ungewitter of Charter Trust Company
Back in July, we used technical analysis to anticipate a "head & shoulders" bottom in AAPL. Now that the minimum price objective of $550 has been achieved, we ask a deeper question: What does market behavior have to say about AAPLs longer-term prospects?
2013-12-03 00:00:00 Secular Bull or Secular Bear? by Leo Cesna of Relevant Investments
Applying statistical control limits to Dr. Shillers CAPE Index reveals where the S&P 500 is likely headed.
2013-11-07 00:00:00 Putting Macro Trends in Context: What do They Mean to a Bottom-Up Investor? by Will Nasgovitz of Heartland Advisors
For some time now, weve had a generally positive economic outlook. The occasional setback is assured, but on the whole we believe that the U.S. economy is still in the early stages of a multi-year recovery.
2013-10-22 00:00:00 The Boys Are Back in Town by Jeffrey Saut of Raymond James
The boys are indeed back in town as Washington D.C. opened its doors for business as usual last week following a contentious debt ceiling debate and a 16-day shutdown of the government. This outcome had been anticipated in these letters for often-stated reasons, and just like when the fiscal cliff was averted, I now expect the media to turn its focus to the next Armageddon.
2013-10-04 00:00:00 The Fire Fueling Gold by Frank Holmes of U.S. Global Investors
For patient, long-term investors looking for a great portfolio diversifier, a moderate weighting in gold and gold stocks may be just the answer. And, today, when looking across the gold mining industry, you?ll find plenty of companies that have paid attractive dividends, many higher than the 5-year government yield.
2013-07-18 00:00:00 The Death of Disasterism by Steven Vincent of BullBear Trading
From late 2012 I have been gradually layering and developing the thesis that a secular bull market started in November of 2012 (with a possible revised start date of June 2012), ending the sideways secular bear market that started in 2000. Here are the basic components of that thesis through the last report.
2013-06-10 00:00:00 Dad's Rules: Timeless Wisdom From a Fallen Investment Hero by Robert Isbitts of Sungarden Investment Research
Once I publish a blog post, I immediately start thinking of a topic for the next one. At this time last week, I decided to focus todays blog on the concept of trading turnover that is, how long you hold something you bought, until you sell it. It seems that with the stock market on a four-year tear and the bond market threatening to fall apart at any moment, it is a great time for investors to prioritize the most basic investment rule: buy low / sell high.
2013-05-30 00:00:00 Understanding Gold Market Dynamics by John Browne of Euro Pacific Capital
To an extent that reveals a thorough misunderstanding of the market forces, the financial media has failed to consider the different motivations and beliefs that drive the different types of investors who are active in the gold market. By treating the gold market as if it were comprised of just one type of investor, analysts have drawn false conclusions about the recent volatility.
2013-05-29 00:00:00 What To Sell, If Selling In May by Doug Ramsey of Leuthold Weeden Capital Management
While the Sell In May market anomaly is well-known, theres little recognition of the impact this seasonal anomaly has historically had on stock market leadership. Theres one effect in particular I found so eye-popping that I broke ranks with Rogoff/Reinhart and rechecked my numbers.
2013-04-26 00:00:00 A Playbook for Investors: How to Shoot, Score, Win by Frank Holmes of U.S. Global Investors
So, in the competitive spirit of the NBA playoff season, I?ve gathered a series of plays that investors can use to shoot, score and win during this year?s market. I?m happy to say they include all the elements of an exciting game, including a comeback kid, an upset and an underdog.
2013-03-04 00:00:00 Reminiscences of Marty Zweig: What I Learned From a Market Great by Liz Ann Sonders of Charles Schwab
Wall Street loses one of its greats. Remembering Marty's contributions to my career... and investors everywhere. Marty epitomized humility and civilityboth in short order today.
2013-02-19 00:00:00 Asset Class Allocation and Portfolios by Adam Jared Apt (Article)
Asset class allocation has been so thoroughly absorbed into the culture of investing that today, most investment guidance is built around it, and you may even have heard that it is the foundation of an investment plan. And like nearly all respectable investment ideas, it is misunderstood and abused. One misconception is that asset class allocation and portfolio management are the same thing. I'll explain why they aren't later, but let's start by considering another misconception.
2013-01-23 00:00:00 Gun Control & How To Play Upcoming Debt Battles by Gary Halbert of Halbert Wealth Management
Ever since the tragedy on December 14 at Sandy Hook Elementary School in Newtown, Connecticut occurred when Adam Lanza senselessly murdered 26 people (20 children and six staff) and then himself there has been a growing cry from millions of Americans for some kind of new gun controls. And the current occupant of the White House is all too happy to oblige. Last week, the president unveiled the most sweeping new gun control laws since the so-called Brady Bill was passed in 1993, requiring background checks on firearm purchasers in the US. Obama's proposals go much further as I will discuss.
2012-12-10 00:00:00 13 for '13 by Richard Bernstein of Richard Bernstein Advisors
Each December we publish a list of investment themes that we feel are critical to the coming year. We continue to believe that US equities are in the midst of a major bull market that could ultimately rival 1982's bull market. It is hard to be bearish when one considers the following.
2012-08-17 00:00:00 Love Trade Cools as Central Banks Gold Demand Heats Up by Frank Holmes of U.S. Global Investors
Although the Love Trade (purchasing gold for coins or jewelry) is on ice for now, a relatively new gold buyer has been warming up to gold. Central bank purchases hit a record high since the official sector became gold buyers three years ago. If this trend continues over the remainder of 2012, central banks will be entering a new territory of gold buying that has not been seen since the early 1960s and since the end of the Bretton Woods System in 1971.
2012-08-13 00:00:00 Invest with the Best?! by Jeffrey Saut of Raymond James
I have been a "fan" of the astute Claude Rosenberg ever since hearing him speak. Some will remember him as the author of Investing with the Best, which deals with the daunting task of selecting an investment manager. Given the plethora of investment managers, picking a manager is difficult. That's why many individuals' selection process consists of nothing more than looking at a portfolio manager's track record for the past few years. We think such a simplistic approach is a mistake.
2012-07-24 00:00:00 The Ultimate Death Cross - False Harbinger of Doom by Georg Vrba, P.E. (Article)
Skeptics and devotees of technical analysis took notice last week when Albert Edwards, the closely followed investment strategist at Societe Generale, warned the S&P 500 was 'on the verge of an ultimate death cross,' foretelling imminent major losses for the stock market. Edwards' sense of doom is misguided. An ultimate death cross is mathematically impossible unless the S&P were to suffer an immediate and precipitous decline. Moreover, the signal would provide a positive outlook, if it were to occur.
2012-07-03 00:00:00 Gleanings by Jeffrey Saut, Art Huprich, Scott Brown of Raymond James Equity Research
With this Gleanings report, we begin a monthly chart presentation and discussion, which attempts to pull together the separate disciplines of Economics, Fundamentals, Technical analysis, and Quantitative analysis. The report contains what we think are currently some of the most important charts. We will have an overview and then highlight some of the key near-term variables that we believe could have a measurable effect on where the various markets are going.
2012-06-19 00:00:00 U.S. High Yield: A Closer Look at Junk Spreads by Hozef Arif of PIMCO
Investors are cautious about high yield bonds which have become more volatile following strong performance and inflows earlier this year. We believe the cyclical bottom in default rates is behind us, and based on a tightening in lending standards compared to last year, we expect a gradual increase toward the mean in default rates and credit losses in 2012.
2012-05-23 00:00:00 Is Quantitative Easing the Silver Bullet to Economic Recovery? by Joseph Giulitto of Trust Company of America
I saw this quote recently while researching another topic. I found it to be appropriate to capture the challenge that professional money managers have in finding investments appropriate for the current domestic economic and geopolitical environment. The rules (that apply to what makes an investment good or bad) that have been established over the previous 40 years of investing are no longer relevant, and those investments that typically would struggle during a massive global recession have been successful in achieving a rising valuation.
2012-05-04 00:00:00 Trading Volumes in Perspective by Team of Neuberger Berman
NYSE Euronext recently reported a 44% decline in quarterly earnings, due largely to a 23% drop in the exchange operators trading volumes from a year earlier. The development confirmed something already known to many in the investment communitythat equity trading volumes have been depressed, which is traditionally a technical indicator of bearish sentiment. Curiously, this light volume has come in the midst of a 29% advance by S&P 500 since its October 4, 2011 market low. In this edition of Strategic Spotlight, we discuss the reasons for the meager volume and what it could mean for investors.
2012-05-03 00:00:00 How Big is Almost? by Andrew J. Redleaf, Blaise Morton, an Richard Vigilante of Whitebox Advisors
For decades the fondest wish of the finance professoriate has been to prove that money managers who believe they earn alpha are kidding themselves and their customers. The latest attempt, titled Active Portfolio Management and Positive Alphas: Fact or Fantasy? is the work of Cornells Robert A. Jarrow, a prestigious name in mathematical finance. Jarrow, based on some previous work with Philip Protter, sets out to prove that the source of all (or nearly all) alpha must be a true arbitrage. Since true arbitrage is vanishingly rare, he then argues alpha must be as well.
2012-02-28 00:00:00 Fun, Fun, Fun by Jeffrey Saut of Raymond James Equity Research
There have now been 37 trading sessions in 2012 and so far the S&P 500 has yet to experience a 1% Downside Day. This 37-session skein has occurred 11 other times in the past 84 years and has on every occasion except one seen the equity markets higher by the end of the year. Still, the rise since the buying stampede ended, which stopped on January 26, 2012 at Dow 12841.95, has felt unnatural to me. Surprisingly, the Industrials reside only 141 points above their intraday high of January 26th, causing one market maven to exclaim, no wonder I feel like were in the Trading Twilight Zone.
2012-02-27 00:00:00 Don't Bet on a Correction by Brian S. Wesbury and Robert Stein of First Trust Advisors
There may be a trader who can capture all of this, but in the end, the history of America is clear. Bears make money every once in a while, but its the long-term bulls, who believe in the steady progress of technology and wealth creation, that make money most consistently. Dont bet on a correction.
2011-12-29 00:00:00 What IPOs and Buybacks are Telling Us Today About Tomorrow! by Kendall J. Anderson of Anderson Griggs
Supply and demand is the basis for technical analysis and for just about every other short-term trading method. The past years volatility of market prices is pretty good evidence on how quickly demand for shares can change. When the call of the day is risk on the market rises. When the call of the day is risk off, the market falls. The rapid change in price also tells us that in the short-term, the supply of shares is fixed. In the long term, the supply of shares will dominate market pricing. Unlike the demand for shares, which can change instantly, supply of shares changes slowly.
2011-12-24 00:00:00 Your Three Investing Opponents by John Mauldin of Millennium Wave Advisors
Recently I have been having a running conversation with Barry Ritholtz on the psychology of investing (something we both enjoy discussing and writing about). Since I am busily researching my annual forecast issue (and taking the day off), I asked Barry to share a few of his thoughts on why we do the things we do. He gives us even more, exploring the three main opponents we face when we enter the arena of investing.
2011-09-16 00:00:00 The Bottom Line #5 by Paul Azeff and Kory Bobrow of Euro Pacific Capital
Today marks the third anniversary of the death of Lehman Brothers, not the first, nor the last, bank or broker-dealer to require emergency meetings of exalted officials to take place over a weekend, but it is the only one that resulted in a complete loss for shareholders and significant losses for bondholders. Whether you see this as the example of the officials getting it right or stunningly wrong really depends on where you sit, and it should color your perspective on everything that has occurred since.
2011-08-09 00:00:00 New Insights on the Role of Alternative Investments in High-Net-Worth Portfolios by Scott Welch, CIMA (Article)
Trends and developments over the past five years allow greater access to alternative strategies and dictate a different conversation with investors about the purpose and trade-offs of such strategies, as well as appropriate ways to incorporate them into well-diversified portfolios.
2011-07-23 00:00:00 Worried About the Future? by Kendall J. Anderson of Anderson Griggs
If you are worried about the current economic state of affairs you may be relieved by what research analysts are telling portfolio managers. First, they seem to be in agreement that businesses are doing fine, especially those that have a global market. Second, interest rates will be higher at some point in the future, and the majority of government debt is safe as far as the ability to pay interest on their borrowing. And most importantly, the earnings you should expect from your investments will be driven over time by the ability of companies to pay you with a little left over to reinvest.
2011-07-06 00:00:00 Sparks: Are Stocks Telling a Better Story For the Second Half? by Liz Ann Sonders of Charles Schwab
Investors continue to focus on the macro ? but the micro is telling a much better story. There was lots of good micro and macro news last week. Is the market's rally sending a signal that the second half of the year is looking up?
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.
2011-04-26 00:00:00 Beware the 3-Minute Trader by Bill Barker of Motley Fool
It is widely reported that 70% of all trades on the New York Stock Exchange are owned for less than three minutes. As in 180 seconds. Max. There are many reasons to take affront at such trading strategies, not least of which is that rapid-fire trading incurs significant tax consequences. As you read this, many of you will have just gone through the always enlightening and delightful gift from our government -the process of filing your own taxes. While that isnt something we'd normally remind you about, we do hope youve taken notice that trading stocks isnt given a free ride by Uncle Sam.
2011-04-22 00:00:00 Silver Set to Soar as Paper Folds? by John Browne of Euro Pacific Capital
As a result of active ?demonetization? efforts by the IMF and its member central banks, gold and silver have experienced the type of volatility that has given conservative investors reasons not to perceive the metals as dependable cash alternatives. Instead gold and silver have become known as the asset class to hold as a hedge against inflation. However, during the 1990?s, when inflation was in general much higher than it has been since the turn of the millennium, gold and silver prices drifted lower and stagnated.
2011-03-18 00:00:00 Has the Game Changed? by David A. Rosenberg of Gluskin Sheff
An object at rest will remain at rest unless acted on by an unbalanced force. An object in motion continues in motion with the same speed and in the same direction unless acted upon by an unbalanced force. This is otherwise known as Newton?s first law of motion. In market parlance, this implies that a trend remains in force until such time as an exogenous shock causes it to either stall or reverse. Economic, geopolitical, and natural disaster events aside, equity markets around the world have definitely broken their intermediate-term uptrend.
2011-03-03 00:00:00 Driving Without Restrictor Plates by Cliff W. Draughn of Excelsia Investment Advisors
Since mid-January we have found ourselves in a quandary over ?jumping in? or ?diving in? to the strongly flowing bullish current of the developed markets. The warning signs have been the Mideast riots, unemployment, commodity inflation, and the US percentage of debt relative to GDP. The positives are corporate earnings, an accommodative Fed, cash-rich balance sheets, and no new taxes for now. Therefore we wanted to share with you a number of charts and statistics that are part of our process.
2011-02-11 00:00:00 A Primer on Valuation (part 2) by Chuck Carnevale of EDMP
To us, the evidence is crystal clear, fundamentals provide a critical perspective that investors should be aware of. Possessing a clear and accurate picture of how well a business has performed on an operating basis is a vital component towards making sound and prudent investment decisions. Contrary to what some might argue, the fundamental operating results of the business tend to persist. The nature of a company's business and the industry it operates in can be reliably evaluated and understood.
2011-01-24 00:00:00 Weapons of Mass Poverty by Mark Elliott of Elliott Asset Management
Modern financial management dogmas may be fundamentally, terminally, and irreparably flawed ? and may be key ingredients in modern asset bubbles. I believe what could be the most serious catastrophe to face retirees and other investors since The Great Depression may be currently underway and, as in past recent financial catastrophes, most investors and financial ?professionals? will fail to act ? despite what appears to be clear writing on the wall.
2011-01-22 00:00:00 The Unsustainable Meets the Irresistible by John Mauldin of Millennium Wave Advisors
States are the largest component of US GDP, and states' revenues have declined 10% from their peak. On top of that, federal stimulus support for states is running out. Congress should allow states to declare bankruptcy and force unions to come to the bargaining table. The US is on an unsustainable path. Absent very serious fiscal remedies, long before we get to 2019 the bond markets will have taken away our ability to finance our debt at low rates.
2011-01-09 00:00:00 2011 Outlook: U.S. Equities Cyclical and Seasonal Trends (Part 2) by Martin J. Pring of Pring Turner Capital Group
Part II addresses the cyclical and seasonal factors that will be in force during 2011. An analysis of the seasonal aspects will give us a better feel for the expected pattern of price behavior as the year unfolds. Since we do not know when the peak will actually materialize well discuss some indicators that should be monitored from the point of view of confirming when they have taken place. First though, lets take a closer look at some of the seasonal/cyclical patterns and how they might affect 2011.
2011-01-04 00:00:00 2011 Outlook: U.S. Equities Secular Trend (Part 1) by Martin J. Pring of Pring Turner Capital Group
In December 2009 we published an article entitled Are You Prepared for Another Lost Decade that argued the U.S. stock market has been in a secular bear market since 2000. Our objective now is to bring you up- to-date on our current views. Lets begin by outlining the characteristics of secular trends and recapping the case for a secular bear. In Part II we will examine the cyclical and seasonal outlook for 2011 and how this might dovetail into the secular picture.
2011-01-04 00:00:00 The White Hurricane by Jeffrey Saut of Raymond James Equity Research
I believe that in the short-term, the odds are not tipped decidedly in investors? favor. The Volatility Index is down to ?complacency levels? last seen in April. Ditto, Investors Intelligence data shows advisory sentiment approaching the bullish extremes of October 07. Meanwhile, stock market leadership is narrowing, internal momentum is waning, and every macro sector except Utilities is overbought. Correlations between various asset classes are decreasing, implying that investors are becoming increasingly selective. All of this suggests more caution is warranted as we enter the new year.
2010-11-30 00:00:00 Why Bubbles Inflate and How to Avoid Them by Robert Huebscher (Article)
In this interview, Meir Statman discusses the psychological underpinnings behind the creation of bubbles in the financial markets, why some bubbles are good and others are not, and how investors should frame their decisions when facing a potential bubble.
2010-11-09 00:00:00 How Modern Is Your Portfolio Theory? by Direxion Funds (Article)
After 58 Years, is there Another Way to Conquer the Efficient Frontier? In the past, active or "tactical" investment management referred to jumping in and out of stocks and bonds - market timing. With the introduction of sophisticated funds that help the masses harness the power of institutional managers and alternative asset classes and strategies, today, tactical management may help to renovate your portfolios - and help you retain and attract assets.
2010-08-10 00:00:00 Is the Market Efficient? by Adam Jared Apt (Article)
After Marxism, no economic theory today may be as derided and despised as the hypothesis of market efficiency. The idea is often misunderstood, sometimes willfully. So what does "market efficiency" mean? In the latest installment of his series for the educated layman, Adam Jared Apt provides some answers.
2010-07-31 00:00:00 Bull/Bear Standoff by Liz Ann Sonders of Charles Schwab
Bulls and bears both have strong cases. With earnings results and economic data indicating continued growth, we lean toward the bullish side?although risks to the bullish case are elevated. Uncertainty and concern regarding government actions continue to weigh on sentiment, while the Federal Reserve leaves all options on the table. Some questioned the credibility of European stress tests, but the market responded favorably. Meanwhile, China's growth appears to be moderating but remains relatively robust.
2010-06-09 00:00:00 i see levels by tom brakke of the research puzzle
Much of technical analysis involves seeing 'levels' of one kind or another and making decisions in response. For avowed technicians, there are levels everywhere. Sometimes they are clearly and cleanly represented in graphic form, but often these days they are to be found in the midst of a chart with so many lines that it looks like a picture of multi-colored spaghetti noodles. Once electronic delivery of charts became ubiquitous, the technicals crept into the consciousness of fundamentalists too. But what of the levels in general? Do the old rules still apply? Can you rely on them?
2010-05-04 00:00:00 How Much is that Investment Worth in Real Money? by Adam Jared Apt (Article)
In the latest installment of his series of articles geared to the educated layman, Adam Apt looks at the topic of the time value of money, and how discount rates can be used to determine the value of a security. He shows the practical applications of present value calculations and its limitations.
2010-04-21 00:00:00 The Bernanke Put: Creating Tetrodotoxin Investors by Cliff W. Draughn of Excelsia Investment Advisors
The 'Bernanke Put' of low interest rates over an extended period of time has effectively lured investors to pursue greater and greater levels of risk without critically thinking about the ramifications of upcoming mortgage resets, consumer spending versus income, credit contraction, valuations, and unemployment. Our country has never experienced leverage of this magnitude. In this environment, we must remember the lesson from Benjamin Graham: 'The margin of safety takes priority over all other investment considerations.'
2010-03-23 00:00:00 The Best Books on Passive Investing by Indudeep Chhachhi & Edward R. Wolfe (Article)
Two finance professors, Edward Wolfe and Indu Chhachhi, survey the literature on passive investing and offer their recommendations for authors and books. Whichever side of the active-passive debate you take, these books should be required reading. The evolution through which the literature on passive investing has gone is striking. Early writers started out with a point to prove: that passive investing is the only way to invest that makes sense. Today, the writing in this area has moved beyond "proving a point" to expanding on what is a settled issue.
2010-02-24 00:00:00 What is 'Growth' Investing? by Alexander M.V. Motola of Thornburg Investment Management
Growth investing focuses on stock purchases in companies that are growing either in excess of GDP growth or fast-er than the "average." Some growth investors feel that valuation matters little or not at all, and that the rapid growth and success of the company insures good investment return. Growth investing, however, is joined at the hip with value investing, and must be combined with valuation, intensive research, modeling, company visits and common sense.
2010-02-16 00:00:00 How Professionals Select Investments by Adam Jared Apt (Article)
In this guest contribution intended for the educated layman, advisor Adam Apt discusses the process by which investment managers select individual securities, contrasting the disciplines of fundamental and technical analysis.
2010-01-26 00:00:00 Using Alternative Investments to Build a Stronger Portfolio by Robert M. Hussey (Article)
Traditional asset classes may no longer provide sufficient portfolio diversification, but there's a new wave of mutual funds that offer alternatives strategies previously available only to large institutions. Robert Hussey of Natixis Global Associates describes how alternative strategies can be used in a mutual fund package. We thank them for their sponsorship.
2009-12-30 00:00:00 Stock Market Double Dip Probability - Leverage, the US, & China by Michael J. Schussele of Michael J. Schussele, CPA
2009-12-15 00:00:00 Investing in Range-bound Markets by Vitaliy Katsenelson (Article)
Vitaliy Katsenelson, a frequent contributor to these pages, reviews his thesis for secular market cycles, why the US markets remain locked in a range-bound state, and what it will take for them to exit from that state.
2009-08-04 00:00:00 Letters to the Editor by Various (Article)
In our letters to the Editor, readers respond to last week's article, How Long is the Long Run?, Geoff Considine's article, The Retirement Portfolio Showdown: Jeremy Siegel v. Zvi Bodie , and Ted Wong's article, Moving Average: Holy Grail or Fairy Tale - Part 3.
2009-07-07 00:00:00 Burton Malkiel Talks the Random Walk by Robert Huebscher (Article)
Passive investing has no more outspoken advocate than Burton Malkiel. At age 72, Malkiel remains every bit as committed to the efficient market hypothesis as when he wrote A Random Walk Down Wall Street in 1973. Malkiel, who has taught finance at Princeton for the last 20 years, was a featured speaker at the Forbes Advisor Conference last week. He insists that investors should buy and hold index funds and defended his position against a series of challenges put to him.
2009-06-30 00:00:00 Letters to the Editor: Moving Average: Holy Grail or Fairy Tale, Part I by Various (Article)
We have two sections of letters to the Editor. The first set features responses to Ted Wong's article, Moving Average: Holy Grail or Fairy Tale - Part 1.
2009-05-19 00:00:00 Waiting for the Fifth Wave by Robert Huebscher (Article)
In response to skepticism we've expressed in the past about technical analysis, one of our readers invited us to attend the Market Technicians Association symposium in New York last week. Our skepticism remains, but it was an enjoyable event and we report on the forecasts of Elliot Wave theorist Robert Prechter.