Is there a bear market lurking in the shadows?
Is it still a “bear market rally?”
The “wisdom of the crowd” isn’t always wise to follow. A recent article by Scott Nations via MarketWatch made an excellent point.
Did Goldman Sachs destroy a persistent myth about investing in stocks? Sam Ro recently suggested such was the case for the “sacred CAPE ratio.”
“Anatomy of a Bear Market” by Russell Napier is a “must-read” manuscript. Given current market dynamics, a review seems timely.
Yield curve inversion conversations are dominating the media to the point it almost sounds like the start of a bad joke.
The surge in bond yields suggests that we are nearing the ideal entry point to buy longer-duration bonds for capital appreciation and portfolio protection.
Bailouts are the root cause of the dysfunction of capitalism and the demise of free markets.
“Cash Is Trash” is a common theme as of late as inflation rages from the massive monetary interventions of 2020 and 2021.
Recession risk is rising rapidly. In fact, it is possible that we may already be in one.
The Fed’s QE is officially over.
An earnings reversion is coming.
Hiking rates into a wildly overvalued market is potentially a mistake. So says Bank of America in a recent article.
Greedy corporations are not causing inflation.
“Geopolitical Risk” could well be a reason for the Fed to slow-roll tightening monetary policy in March.
A March stock market rally is likely, but does that mean the risk of a bear market is over?
Market pullback or bear market? Such seems to be the question on everyone’s mind as of late, given the rough start to 2022 so far.
Earnings estimates are more deviated from long-term growth trends than at any point in history.
Economic stagnation arrives as expected as the “Sugar Rush" of liquidity continues to fade from the system.
A 50-percent decline will only be a correction and not a bear market.
Disinflation, and ultimately deflation, is a more significant threat than inflation over the next two years.
A Potemkin economy has lured the Fed, economists, and Wall Street analysts into a potentially dangerous assumption of economic normalcy.
Jeremy Grantham recently made headlines with his latest market outlook titled “Let The Wild Rumpus Begin.”
What if the Fed can’t hike rates? It’s an interesting question and one we delved into in Part 1 – “Fed Won’t Hike Rates As Much As Expected.”
Rate hikes will be far fewer than the markets currently expect.
“Don’t Fight The Fed.” But, unfortunately, that mantra has remained a “call to arms” of the financial markets and media “bullish tribes” over the last decade.
Passive ETFs are hiding a bear market in stocks.
“Speculative” is a word that aptly sums up the year 2021.
Here are my New Year “investor” resolutions for 2022.
The reality is that despite media commentary to the contrary, debt-driven government spending programs have a dismal history of providing the economic growth promised. As a result, the disappointment of economic and earnings growth over the next year is almost a guarantee.
During bull markets, investors have a concise memory of previous bear markets. Such is why, throughout history, cycles repeat as lessons must get learned and relearned.
When the Fed initially starts hiking rates, it is usually during a strongly trending bull market. Much like a car rolling downhill in neutral, tapping the brakes initially doesn’t do much to curb the momentum. However, keep pushing on the brake pedal long enough, and the car will slow to stop. There are two things to take away from the chart below.
“Wipe Out” is an appropriate description of what is happening beneath the calm surface of the bull market.
Going to all cash in your portfolio to avoid a crash can be just as costly as the crash itself. A recent CNBC article quoted a $200 billion money manager suggesting “every stock market investor should be ready to go to cash.”
Financial history is littered with the remains of ideas that marked the peaks and troughs of markets over time. From magazine covers to the world’s tallest skyscrapers to new investment products and strategies. Most proved to be the result of the psychology at that time, whether it was excessive bullishness or overwhelming fear.
The market is disconnected from everything. Throughout history, there are correlations you would expect to hold constant between the market, consumer confidence, and the economy.
The Fed’s monetary policy has screwed Americans. Such is the basic premise of a recent Washington Times article discussing inflation.
Inflation vs. deflation – while headlines get filled with “inflation” concerns, historical data shows “deflation” remains a threat.
Could the Fed trigger the next “financial crisis” as they begin to hike interest rates? Such is certainly a question worth asking as we look back at the Fed’s history of previous monetary actions.
Do rising interest rates matter to the stock market? Many in the financial media and advisory community are scrambling to locate periods where rates rose along with stocks. Has it happened? Absolutely. However, it was only a function of timing until it mattered.
While the Fed notes valuations are elevated, the crucial message to investors gets obfuscated. From current valuation levels, the expected rate of return for investors over the next decade will be low.
“Is cash a good hedge?” It’s a focus of a recent article discussing “fast” versus “slow” risk which examined the financial impact on equities and cash over long-term periods.
Charting the stock market “melt-up” in prices, and the Fed’s naivety of the laws of physics may be of benefit to younger investors. After more than a decade of rising prices, accelerating markets seem entirely normal, detached from underlying fundamentals. As a result, new acronyms like “TINA” and “BTFD” get developed to rationalize surging prices.
Fundamentally speaking, there are more than a few indications that 2022 earnings estimates are still overly exuberant. However, the bullish optimism currently supports rising stock prices.
What If I told you that 40% of the bull market rally over the last decade was from buybacks alone? That may not be as crazy as it sounds.
While the promise of a continued bull market is very enticing, it is essential to remember that all markets ultimately complete a “full cycle.” Therefore, if your portfolio, and eventually your retirement, depends on the thesis of an indefinite bull market, you should at least consider the following charts.
Like all rules on Wall Street, Bob Farrell’s rules are not hard and fast. There are always exceptions to every rule, and while history never repeats exactly, it often “rhymes” closely.
We dig into the bullish and bearish case for the market as we head into the end of the year. Currently, investors face a conundrum between year-end seasonality and the Fed starting to taper its bond-buying program.
Is the risk of a more significant correction over now that the expected 5% decline is complete? That was a hotly debated question after this past weekend’s newsletter supporting the idea of a reflexive rally into year-end.
No. We are not repeating the “Roaring 20’s” analog. Ben Carlson had a recent post asking if the “Roaring 20’s” are already here?
