Against the Wind
There is an old tongue-in-cheek market adage that says that portfolio managers are “never wrong, but sometimes they are early.” Well, in our case, that expression was flipped -- We were exactly right, but late.
Summer in the City
The “dog days” of summer are upon us, and the “out of office” email bounce backs have increased accordingly. But while many Northern Hemisphere workers may be taking their summer breaks, the global economy continues to grind along.
All Along the Watchtower
As we review the general state of the global economy and investment markets, the word that keeps running through our mind is “asymmetrical”. We believe that the underlying fundamentals remain generally positive, but the market increasingly is “priced for perfection” and subject to downside shocks if what’s being priced in turns out differently than expected.
“Sell in May and go away” is, perhaps, our least favorite market cliché. It strikes us as simplistic and slightly juvenile. Except for the fact that it often proves true – the summer months do tend to exhibit less trading volume and, therefore (perhaps counterintuitively), the markets often react more violently to transitory news.
Trade Wars, Volatility, and Fear, Oh My!
In the current environment, we believe the market had once again become overly complacent and so is reacting to noise. Perhaps it would be more accurate to suggest that the market is once again appropriately pricing risk back into the market.
Monthly Market Commentary: April 2019
All of the “signals” we’ve been focusing on in the past several months remain solidly “in the green”. So why are we apprehensive? Perhaps we shouldn’t be, and simply are falling prey to our inner “Chicken Little” who always thinks the sky is falling. We’ve been guilty of that before.
March 2019: "Whataya Want From Me?
We find the global economy and market at an interesting crossroad. Continuing our “noise” versus “signal” theme of the past 2-3 months, here is our take on the current environment.
Always Look on the Bright Side of Life
Given the generally positive trends on both market signals and noise, is it any real surprise that the markets have rallied as they have so far this year?
Are We Having Fun Yet?
So let’s summarize how we see the world in terms of noise – those things that may introduce short-term volatility and anxiety, but which are unlikely to dramatically affect longer-term performance – and signals – those things that may actually affect longer-term market performance.
The Point of Know Return?
We believe that investors “overbought” good news through the first three quarters of 2018, and now are “overselling” bad news.
Whole Lotta Shakin’ Goin’ On
Last month, we referenced the phrase “October Surprise” in its usual political context. Well, we certainly had a surprise, but it was markets-related rather than political. After months of investor complacency and a sky-rocketing technology sector, the markets suddenly got spooked on the backs of global trade tensions...
The Elections Are (Finally) Over – Now What?
There is not much to say about the mid-term elections beyond what has already been said ad naseum. The bottom line is that the outcome was largely as anticipated – the Democrats regained control of the House (though by a smaller margin than expected by those hoping for a “Blue Wave”)...
Will You Still Love Me Tomorrow?
This year, there very well may be a political “October Surprise”, though as we write this we are running out of days in which one may occur (perhaps the recent spate of “pipe bomb” deliveries to prominent Democrats qualifies, though the actual sender of those bombs remains highly questionable).
Everything’s Gonna Be Alright (?)
The consensus view is that the US will not head into recession until later in 2019, perhaps not even until 2020. But it is important to remember that fiscal stimulus simply pulls consumption forward. We currently are benefiting from that phenomenon, as the economy is strong and consumer and small business owner sentiment is as high as it has been in years. But while fiscal stimulus can elongate economic expansion, it does not negate the business cycle. The piper always gets paid.
Everybody Wants Some…I Want Some Too!
The “dog days” of summer are ending, and September and October frequently have “re-introduced” investors to volatility. This may prove especially true as we head into what looks to be a divisive and brutal mid-term election cycle.