The Mutual Funds Channel

ECRI Weekly Leading Index Update

This morning's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 148.7, down 0.6 from the previous week. Year-over-year the four-week moving average of the indicator is now at 3.80%, down from 3.87% last week. The WLI Growth indicator is now at 4.3, down from the previous week.

Is Passive Investing Destroying the Markets?

Passive investing has been ridiculed by Wall Street for decades. The common theme is that indexing has become such a force that the market’s price discovery function is no longer working properly. Given the number of questions I get about this issue, one would think that passive investing is now dominating markets.

A More Demanding Powell Put to Test EM’s Strengthened Mettle

The Fed chairman makes clear the bar for slowing monetary tightening is higher nowadays, and argues emerging markets are much better positioned to handle higher U.S. yields than they were before.

Military Preparedness

Today, we revisit the military preparedness question following President Trump’s nearly $700 billion military budget to attempt to make our military readiness better. We think the recent weakness in the defense sector stocks provides an interesting entry spot for investors.

Credit-Driven Train Crash, Part 1

I’ve been saying for some time that the next financial crisis will bring a major debt crisis. But as you’ll see today, it is a small part, maybe the opening event, of a rapidly-approaching train wreck. We’ll need several weeks to tease out all the causes and consequences, so this letter will be the first in a series.

In Search of Teenage Mutant Ninja Turtles

So we headed to NYC early Thursday morning in search of the “Teenage Mutant Ninja Turtles.” After touching down at LaGuardia we climbed into a yellow taxi held together by duct tape, rode over potholed streets with our cell phone cutting in and out (gosh I love New York City), and arrived at Grand Central Terminal around 11:00 a.m.

Will Real Change Result from New Regs? That’s Up to Investors

On May 14, new MSRB regulations will require the disclosure of the often dramatic markups that retail investors are subject to when buying individual municipal bonds. Will this accelerate the shift into active municipal bond management?

The Characteristics of Winning Bond Funds

The U.S. bond market is one of the largest in the world, with managers controlling more than $2 trillion in assets. Given its size, an important question is identifying active bond fund managers that add value.

Gundlach – Don’t Fear the 3% Yield on the 10-Year

Fear that the multi-decade bull market in bonds will end has centered on the benchmark 10-year Treasury yield breaching 3%. But Jeffrey Gundlach said that is the wrong focus.

Gold Love Trade Looks Promising in India and China

Gold was up half a percent year-to-date through last Friday. This doesn’t sound very exciting, but over the same period, the S&P 500 Index was in the red—the first time in nearly a decade that stocks have been negative for the year through the beginning of May.

Jekyll and Hyde Quarter

The first quarter of 2018 was remarkable in several ways. We saw record highs in equity markets, but also a fierce resurgence in volatility. To some degree, the first quarter was a Jekyll and Hyde type of period. The first half of the quarter was characterized by a low volatility, momentum driven, continuation of the themes that carried 2017.

Berkshire Hathaway Annual Meeting 2018: A Mirage of Feelings

Much like the 1975 Billboard top ten hit song, Feelings, Warren Buffett and Charlie Munger laid out their feelings on a variety of issues in Omaha at the Berkshire Hathaway (BRKB) Annual Meeting. We believe even the greatest investors of all time are being influenced by a mirage.

The Upside of Munis’ Down Market

Bond supply is plummeting, but so is demand. And rates are rising. Where are the silver linings?

Weighing the Week Ahead: Why Are Stocks Stuck in Neutral?

The economic calendar is normal, with an emphasis on inflation data. The week will begin with analysis of the annual Berkshire Hathaway meeting, the wisdom of Buffett and Munger, and a multi-hour CNBC program including Warren Buffett, Charlie Munger, and Bill Gates.

How to Diversify Beyond the 60/40 Portfolio

The traditional 60/40 model no longer can be expected to deliver the same type of results. A new model is for investors to move toward more of a risk-parity portfolio, with assets more equally divided among stocks, bonds and these new alternatives.