The Leveraged and Inverse Funds Channel

Cash-Out Refinancing During Bubble Years Will Lead to Disaster

Nearly all analysts who write about the housing bubble have focused on the purchasing madness that occurred. While this is important, it overlooks the refinancing insanity of 2004-2007. This refinancing lunacy will devastate mortgage and housing markets for years to come.

Gold Gets a Shot in the Arm from Inflation and China

Inflation just got another jolt, rising as much as 2.5 percent year-over-year in January, the highest such rate since March 2012. Led by higher gasoline, rent and health care costs, consumer prices have now advanced for the sixth straight month. In addition, January is the second straight month for rates to be above the Federal Reserve’s target of 2 percent.

Weekly Market Summary

US equities continue to make new all-time highs each week, supported by strong equity fund inflows and macro data that has exceeded expectations. Surprisingly, equities outside the US are actually outperforming the S&P. The current trend is very extended and there are four notable headwinds that may impact equities in the weeks ahead. There is, conversely, a favorable set up in the bond market.

Big Winners in the Neglected Frontier Universe

Frontier markets were mixed in 2016, with most of the Middle East and Africa lagging the rest of the universe and a few mar­kets surging ahead 30-40% on the year.

Forecasting Factor and Smart Beta Returns (Hint: History Is Worse than Useless)

In a series of articles we published in 2016, we show that relative valuations predict subsequent returns for both factors and smart beta strategies in exactly the same way price matters in stock selection and asset allocation.

Sales and Earnings Back At Highs, But So Are Valuations

In the past year, S&P profits have grown 46% yoy. Sales are 4.5% higher. By some measures, profit margins are back at their prior highs. This is a remarkable turnaround from a year ago, when profits had declined by 15% and most investors interpreted this as a sure sign that a recession and a new bear market were underway.

Better Days: Earnings Growth Picks Up Sharply in 2017

Much ink spilled these days—including by yours truly—tends to be of the macro variety. This is for good reason as studies have shown that macro forces have been greater determinants of asset class performance than traditional underlying fundamentals.

Staying Even-Keeled in Equity Market Crosswinds

Stable stocks are out. Riskier reflation plays are in. But who knows which way fickle market winds will blow tomorrow? That’s why strategies that harness stability and good judgement never go out of style.

The Latest News in Alternative Investing – Finding Pockets of Opportunity

With a diversified portfolio, alternative investments can complement more conservative investments and produce higher returns. This week’s news focuses on pockets of opportunities, such as in multi-asset absolute-return funds, smaller hedge funds and real estate.

Structural Differences

Due to structural differences, some closed-end funds may have longer durations than their open-end fund peers, says Alaina Bompeidi of Morningstar.

Tax Reform: The Good, the Bad, and the Ugly, Part Two

We will look more closely at the rest of the tax proposals. Then next week we will go much deeper into the BAT and then into what I think the tax system should actually look like, which will be far different from anything I’ve suggested in the past. That discussion will make more sense if we have placed the ideas in full context.

Time-Stamp of Speculative Euphoria

If there’s any point in U.S. stock market history, next to the market peaks of 1929 and 2000, that has deserved a time-stamp of speculative euphoria that will be bewildering in hindsight, now is that moment.

Financials and Energy: Have Value Investors Missed the Boat?

Being a deep value investor can be a lonely endeavor. We crunch the numbers to find unloved companies that we believe have bright futures ahead — years ahead, in many cases. But if you wait long enough, market sentiment can shift and your previously unloved holdings may suddenly appear on everyone’s radar screen.

More Senior Than What? Potential Risks in Senior Bank Loans

Floating rate bank loans, which are typically the most senior debt in an issuer’s capital structure, have traditionally been considered more resilient than high yield bonds in the event of default.

Hoisington Quarterly Review and Outlook – 4Q 2016

The 2016 presidential election has brought about widely anticipated changes in fiscal policy actions.