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An Open Letter to the Next President
by John Mauldin of Mauldin Economics,
As the entire world is painfully aware, it is election year in the United States. I realize the images my non-American friends see may not inspire confidence. Our process is messy in the best of circumstances, and this year we are not at our best.
Did Oil Prices Just Find a Bottom?
On a global scale, oil production is finally dropping—and that’s constructive for prices. In a report released today, the International Energy Agency (IEA) writes that “prices might have bottomed out,” citing a February decline in both OPEC and non-OPEC output and hopes of U.S. dollar weakness.Although I’m cautious, the current recovery is in line with oil’s seasonality trends for the five- and 15-year periods, which show that prices have risen between March and the beginning of the busy summer travel season.
Which is Best-Investing For Income or Total Return: Part 2
by Chuck Carnevale of F.A.S.T. Graphs,
There is a long running feud between investors who believe in investing for total return versus those who believe in investing for current income. Both camps are fervent advocates of their respective beliefs, and there seems to be no feasible middle ground or compromise. Unfortunately, I believe that the dogmatic positions of both groups create a roadblock to investing enlightenment. In truth, there are valid arguments supporting both sides of these hotly-debated subjects. On the other hand, there are also valid arguments supporting investing for income over total return, and vice versa.
NIRP -- No Need to Go There
by Paul Kasriel of The Econtrarian,
Despite the success of QE by the Fed in stimulating growth in US nominal domestic demand, many a talking twerp is discussing the necessity of NIRP to bring the US economy out of its next recession. First, why worry about the next US recession when there is none on the horizon? Second, if QE worked to help get the US economy out of its worst recession since the early 1930s, why don’t you think it will work in producing a recovery from the next US recession, whenever it may come?
It’s Time to Rethink Your Social Security Claiming Strategy
by Robert Dietz of AllianceBernstein,
Retirees in the US can control when they begin to receive Social Security benefits, but a recent rule change has narrowed the options for married couples. Now is the time to reevaluate your plan. You may be among the lucky few who can still claim benefits under the old rules, if you act before April 29.
Weekly Market Summary
by Urban Carmel of The Fat Pitch,
Equities rose the fourth week in a row, led by continued strength in oil. SPY has now rallied 11% and is back above a key support level and its 200-dma. Breadth momentum during this rebound has been stronger than nearly every bear market rally in the past 16 years. Moreover, despite the large gains, investors remain mostly skeptical. Turbulence during the upcoming March OpX week would be normal, but this week is seasonally bullish. Below, we outline what to look for before assuming the rally has come to an end.
The ECB’s Race Against Time
by Carl Tannenbaum of Northern Trust,
Buffeted first by the Global Financial Crisis (GFC) and then by the sovereign debt crisis two years later, the eurozone has struggled to restore prosperity. Real gross domestic product (GDP) has still not recovered to the level recorded eight years ago, and growth has been uneven.
What Goes UP in EMEA as ECB Assets Rise?
by Jennifer Thomson of GaveKal Capital,
Ahead of tomorrow’s monetary policy meeting at the ECB, a majority of respondents expect both a cut in interest rates and an increase in the amount of monthly purchases in the Public Sector Purchase Program (PSPP) that began about a year ago. Speculation that markets may be disappointed should not come as a surprise, however.
ECB Stimulus: A Desperate Move?
I wrote the other day about the next crisis and why it might well come from Europe. The news from the European Central Bank this morning reinforces my convictions. Although markets seem to be cheering the announcement of more stimulus, to me it looks like one more sign of increasing systemic stress.
No You Don't Need $20 Million to Retire
by Roger Nusbaum of AdvisorShares,
Americans are facing serious problems accumulating reasonably sized nest eggs for their retirements. Depending on which articles you read, Americans might be having trouble accumulating any nest egg for the future. There are so many stats from so many sources lacking consistency in terms of groups studied and data collection methods that I think they lack value in terms of trying to understand specific numbers. But there can be no doubt that collectively we are horribly under saved for the future.
On My Radar: Stick With the Drill – Stay Wary, Alert and Very, Very Nimble
I was in Florida this week attending the 32nd Annual Chicago Board of Options Exchange (CBOE) Risk Management Conference. Attendees were mostly asset managers and larger pension and endowment managers. Several comments stood out to me; particularly the one above from Paul R.T. Johnson, Jr., Board Member of the State University Retirement System. “42% funded?” He added that the good news is that his is the most funded of all the states. Yikes.
Beware Trade-Recession Scare Story
Friday’s robust report on job growth ought to put the nail in the coffin on recent fears about a recession. Payrolls rose 242,000 and civilian employment, an alternative measure of jobs that includes small business start-ups, increased 530,000. In the past year, these two measures are both up approximately 2.7 million. Obviously, we’re not in a recession.
Economic Risk Factor Update: March 2016
Once again, it’s time for our monthly update on risk factors that have proven to be good indicators of economic trouble ahead. After flashing a yellow light for the last several months, the change in consumer confidence indicator has declined even further, moving closer to the worry zone. Some signs of weakness are also appearing in other areas, such as the yield curve indicator.
Schwab Market Perspective: Neutral Does Not Mean Boring
There are two ways to get to a neutral color: 1) just pick the boring beige that we’re all familiar with, or 2) mix a bunch of wild colors together and end up with an altogether bland sort of color—vastly different inputs but relatively the same result. Recently, stocks have resembled the latter scenario as stock indexes have moved out of correction territory but have remained quite volatile, with triple-digit Dow moves more common than not.
There’s Been An “Anti-Dollar” Movement In The Market Recently
by Eric Bush of GaveKal Capital,
Part of our investment work is understanding what has or hasn’t been driving the market recently. We quantify this by regressing various valuation, fundamental, estimate, and correlation factors against the market over 1-day, 1-week, 1-month, 3-month and 1-year time periods. Over the past year, North American stocks that have had the lowest correlation to the USD have had terrible performance. The decile of stocks with the lowest correlation to the dollar are down nearly 22% over the past year. What’s interesting is we have seen this relationship completely reverse over the past month.
Dividends Don’t Drive Total Return They Contribute To It: Part 1
by Chuck Carnevale of F.A.S.T. Graphs,
I believe there is a critical piece of investment wisdom that all investors in common stocks should possess. Every common stock investor should have a clear understanding of where and how long-term common stock returns are generated or come from. When an investor does not possess this knowledge, they can be easily led towards drawing erroneous conclusions about their portfolios and/or the individual stocks that they own. Knowledge is power, and the knowledge of where and how long-term stock returns are generated is incredibly enlightening.
Look Beyond the Headlines: China's Services Sectors Continue to Grow
China’s economic health is one of the key questions facing investors. The country’s economic growth rate has indeed slowed, edging beneath 7% in 2015 for the first time since the first quarter of 2009. However, investors should note that China’s growth rate remains higher than most other major economies, and its consumer and service sectors are rising drivers of its GDP. Three emerging markets portfolio managers—Dale Winner, Anthony Cragg, and Jerry Zhang—offer their views on investing in China.
Brexit
Despite the EU’s founding premise that members should seek an ever closer union, the U.K. is questioning the net benefits of its membership. Following a recent increase in public opinion asking to separate from the EU, U.K. Prime Minister David Cameron set a referendum on membership for June 23. Cameron supports remaining in the EU; however, several other highly visible members of the Conservative Party have stepped out in support of leaving the EU. In this week’s report, we will take a look at the main factors leading to the call for Brexit and their impact on the economy and the markets.
Four Big Mistakes Hurting Your Firm’s Growth
by Damian Ornani,
Growth for an RIA usually means boosting assets under management and/or client count. However, this presents a problem for the diligent RIA: How do you responsibly grow your firm without jeopardizing quality – and, with it, the existing client relationships you cherish? The answers could fill volumes. Avoiding these four big mistakes is a crucial start to grow while maintaining quality.
Is Facebook a Screaming Buy Or Sell?
by Chuck Carnevale of F.A.S.T. Graphs,
This article is directed to the individual investor concerned with achieving the highest possible total return. The highest total return will typically come from a true growth stock simply because a faster growing company is worth more than a slower growing company past, present and future. On the other hand, for that statement to be true, a high rate of earnings growth must be consistently achieved. Generating and sustaining a high rate of earnings growth is the tricky part, because although there are a few companies capable of generating higher earnings growth rates, they are rare.
Weekly Market Summary
by Urban Carmel of The Fat Pitch,
Equities gained nearly 2% for the second week in a row. SPY has now rallied to 197, the lower end of the target range we set in early February. If this is just a countertrend rally within a bear market, then risk/reward is now marginal. Despite the steep gains in recent weeks, investor pessimism persists: it would be remarkable if the rally ended without even a hint of FOMO (fear of missing out). Breadth also suggests further upside in the weeks ahead. Meanwhile, recent macro data strongly refutes the notion that economic weakness is the root cause for the fall in equities.
Analyzing Despair; Restoring Hope
by Byron Wien of Blackstone,
While I began this year with a cautious view of the financial markets, I did not expect the swift market declines that we have all experienced. At one point, the Standard & Poor’s 500 was down 10% year-to-date. The recent weakness is clearly supported by some serious economic problems which I will explore. My conclusion, however, is that we will not endure either a bear market or a recession this year, and I will try to defend that position in the course of this essay.
An Escalating War on Cash
by John Browne of Euro Pacific Capital,
On February 16th, The Washington Post printed the article, "It's time to kill the $100 bill." This came on the heels of a CNNMoney item, the day before, entitled "Death of the 500 euro bill getting closer." The former cited a recent Harvard Kennedy School working paper, No. 52 by Senior Fellow Peter Sands, concluding that the abolition of high denomination notes would help deter "tax evasion, financial crime, terrorist finance and corruption."
Constructing a Balanced Portfolio
We often write about how our tactical asset allocation investment process seeks to use shorter-term market price volatility to our long-term advantage. Of course, while it is easy enough to say volatility creates opportunity, the reality is that volatility can be stressful and painful when you are actually experiencing it in your portfolio.
The Fed's Nightmare Scenario
by Peter Schiff of Euro Pacific Capital,
Operating under the mistaken belief that a modest dose of inflation is either a prerequisite for, or a by-product of, economic growth, the nation’s top economists have been assuring us for quite some time that inflation will stay very low until the currently mediocre economy finally catches fire. As a result, they believe that the low inflation of the past few months has frustrated Federal Reserve policy makers, who have been supposedly chomping at the bit to keep hiking rates in order to restore confidence in the present and to build the ability to cut rates in the future if the nation were
Less Than Zero
In the 1985 novel Less Than Zero, the characters seem intent on a race to the bottom. So too is the current predicament of the world’s central banks, according to US Investment Strategist Kristina Hooper. Some have adopted negative interest rates with others set to follow down below zero.
Margin of Safety
by Kendall Anderson of Anderson Griggs,
Benjamin Graham, Warren Buffett, Seth Klarman, John Templeton, Howard Marks, John Neff, Walter Schloss, Max Heine, Michael Price, Peter Lynch, Wilbur Ross, and many other investment managers created wealth for themselves and their clients based on the belief that the market price for an investment will, at times, vary substantially from the intrinsic value of the investment.
Monopoly Is Going Cashless. Could We Be Next?
Nearly everyone can recall playing Monopoly as a child, and for many, the game served as their first exposure to handling different denominations of cash. It was exhilarating to have someone land on your Park Place property, complete with hotel, and in turn receive a fistful of $50s and $100s.
The Direct Credits Society?
by Jeffrey Saut of Raymond James,
Come with me, and Mr. Peabody, in the “Wabac Machine” (Wabac) to a place from a time long ago and galaxy far, far away. It was during the Great Depression in this country (1929 – 1939) when Lawsonomy was proposed by Alfred Lawson. I recalled Lawsonomy while listening to Bernie Sanders over the weekend, who sounds amazingly like Alfred Lawson. Lawson (1869 – 1954) was a man who believed in giving everything in the world to everybody.
Will HELOCs Trigger a Banking Crisis?
by Keith Jurow,
After disregarding the looming home equity line of credit (HELOC) disaster for several years, Wall Street and media pundits have finally taken notice. Homeowners with HELOCs will soon see them convert to fully amortizing loans and will face a huge increase in their monthly payment. Banks have not set aside adequate reserves to cover a HELOC-driven crisis, which would impact even those investors in broadly diversified index funds.
Results 7,251–7,300
of 10,166 found.
