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Money Managers Aren't Paid to Forecast; They're Paid to Adapt
by Chris Puplava of PFS Group,
It seems we can't go a week without someone predicting the end of the world and stirring up everyone's fears of a market meltdown. These apocalyptic warnings are becoming routine and the sad thing is that it does cause the squeamish individual investor to run for the hills and liquidate their investment portfolio.
Why I Sold - Part 2
by Jim Whiddon,
When considering whether to sell my firm in 2012, I embarked on a six-month war-game exercise to decide whether to join forces with a similarly positioned ally within our industry. With the help of my team, I performed a detailed analysis of how well-prepared the firm was for the challenges facing it. Several key threats emerged.
A Century of Policy Mistakes
A century ago Argentina ranked as one of the wealthiest countries in world. Today it is a shadow of its former self. A long string of policy errors explain the long slide from riches to rags. Europe, like Argentina 100 years ago, is facing enormous challenges - as well as potential pitfalls - and the management of those challenges will define the welfare path for many years to come. Unfortunately, the early signs are not good. Our political leaders, afraid to face public condemnation, have so far chosen to ignore them.
Secular Bull Or Bear?
by Doug Ramsey of The Leuthold Group,
At the January highs, the S&P 500 had gained almost 175% in just 58 months, while secondary stocks and equal-weighted market measures have gained considerably more. If it?s already over (and we don?t think it is), this cyclical bull will go down as a memorable one. But is this move the first leg of a new secular bull market? ? We think the next cyclical bear market will drive the market to levels low enough that debate will rage over the true date of the secular bear market low: was it 2009, or 201X?
Why Emerging Market Fears are Overblown
by Robert Huebscher,
Conditions in the emerging markets bear little resemblance to those in 1997 leading up to the Asian crisis, according to Simon Derrick, a leading market strategist with BNY Mellon. In this interview, he also explains why the euro is overvalued and picks the winners and losers in todays currency wars.
Grey Owl Capital?s Third Quarter Letter
2013 was a banner year for the US stock market. Despite equities? meager fourteen-year record of accomplishment, investors, broadly speaking, are limited to short-term memory. Last year?s performance was enough to generate significant enthusiasm for stocks. We continue to believe, the current environment warrants a more balanced approach.
Why Quantitative Easing Didn?t Work
IN THIS ISSUE: 1. Why Fed?s Quantitative Easing (QE) Didn?t Work 2. Velocity of Money Plunged During Financial Crisis 3. Should Bernanke & Company Have Done More? 4. QE Was a Huge, Dangerous Experiment That Failed 5. Fed Begins to ?Taper? QE Purchases in January 6. Conclusions ? What Happens Next?
Leveraged Finance Outlook: Riding the Low Default Wave
Following strong performance in 2013, we expect low (1%-3%) defaults in leveraged finance markets this year. Issuance should remain healthy, and continued slow but steady growth in the U.S. economy should offer further stability to these companies. However, careful credit selection and monitoring of sector trends remain imperative. Investors with low tolerance for volatility and more interest rate sensitivity may emphasize loans, while investors with greater risk tolerance and a more benign outlook for rates may look to high yield.
What's the Game Changer for Gold?
What will break gold of its losing streak? Will inflation, which is a lagging indicator, be stronger than expected? In one of my most popular posts last year, I said that based on the jobs market, the limited housing recovery and regulations slowing down the flow of money, the Fed would have no choice but to start tapering and raising rates very gradually to keep stimulating the economy.
Year-End Odds and Ends
by Jeremy Grantham of GMO,
In a new quarterly letter to GMOs institutional clients, chief investment strategist Jeremy Grantham offers "Year-End Odds and Ends": Fossil Fuels: Is Tesla a Tease or a Triumph?, Fracking and Yet More Technical Stuff on Fracking, Update on Metals, Fertilizers, and Food, Problems in Forecasting Short-term Prices for Resources, Another Look at U.S. GDP Growth, Investment Lessons Learned: Mistakes Made Over 47 Years
Thrift, Thrift, Burning Bright
Does the title sound familiar? Think feral instead of frugal, and William Blakes "Tyger, Tyger, burning bright" may start to flicker between the synapses of memory and an English lit class you once soldiered through. But even if you havent read "The Tyger", its theme is aptly captured in the opening line and its image of a big flaming kitty cat. Essentially, Blake saw reality in duality: To appreciate the ferocious feline in all its glory is to come face to face with the same force that created "The Lamb", another entry in the poets Songs of Innocence and of Experience.
Fed Responsible for EM Crisis?
by Axel Merk of Merk Investments,
From the bully pulpits in Sao Paulo to the blogosphere in cyberspace, the Fed is blamed for the turmoil in Emerging Markets (EM). Thats a bit like blaming McDonalds for obesity. Blaming others wont fix the problems in EM economies, it wont fix investors portfolios and it is an unlikely way to lose weight. Investors and policy makers need to wake up and realize that they are in charge of their own destiny. Let us explain.
The Three Drivers of Exceptional Success
by Dan Richards,
Any suggestion that theres only one path to success is fatally flawed. As I look back at my 30 years working with extremely successful advisors, what strikes me is the variation in the approaches taken by advisors. That said, there are three categories of behavior that extremely successful advisors share.
Surviving Austerity
With the Standard & Poors 500 Index having posted a 30% gain, its easy to assume that U.S. stocks easily led the world in 2013. (There is more on what is behind this rally in the latest version of the Euro Pacific Capital Newsletter). But as it turns out, the stimulus-loving U.S. markets had plenty of company. Surprisingly, this includes countries supposedly saddled by the scourge of austerity.
Broadleaf's 2014 Investment Playbook
Most sell side firms publish their outlook for the economy and stock market at the end of December and in early January. As a buy side firm, we really arent under any expectation to share our outlook for the coming year and, as funny as it might sound, some of our clients dont even care to know what we think, only that we handle what they hired us to do, which is to outperform the market indices over a full market cycle and help them attain their financial goals over time.
Can Equities Continue Their Rise? Equity Investment Outlook: January 2014
2013 marked the fifth year of recovery following the near-death experience of the 2008 global financial system meltdown. From a low of 677 in 2009, the S&P 500 Index (S&P 500) finished 2013 at 1,848, delivering a stunning 203% total return from the low. Over the same period, the total return for the Dow Jones Industrial Average was 188%. The tech-heavy and arguably more speculative NASDAQ logged a 249% total return. These very large equity returns reflect both a strong recovery in corporate profits and a dramatic clean-up of our financial system.
Ordem e Progresso
by Michael Gomez of PIMCO,
Amid stagnant growth and high inflation in 2013, Brazils equity market was one of the worst performers, the real was a chronic underperformer and the corporate sector struggled. Brazil needs to anchor economic policy around a stringent and credible primary surplus target rather than run the current mix of loose fiscal policy, subsidized public credit and ever tighter monetary policy. Valuations are attractive, but unless an effective policy mix is restored, the outlook for order in Brazils financial markets is less certain.
Stocks for 2014: Something for Everyone: Part 1
by Chuck Carnevale of F.A.S.T. Graphs,
My biggest pet peeve regarding common stock investing is how so many people have a tendency to over-generalize this asset class. Commonly held beliefs such as investing in stocks is risky, or that the stock market is overvalued, or that the fed is driving stock prices, etc., are just a few examples illustrating my point. In truth, common stocks are as individually different as people are individually different. When dealing with human beings, most reasonable thinking people would reject prejudicial statements. Personally, I believe we should have the same attitude about common stocks.
Michael Porter on the Fundamental Problem for Investors
by John Heins,
Harvard Business School Professor Michael Porter’s seminal work on competitive dynamics and the strategies companies can employ to positively impact their competitive positions revolutionized managerial thinking. In this recent interview in Value Investor Insight, however, he’s even more interested in speaking about investing - not all of which is particularly flattering to investors.
The Price Action of Stocks Trumps Fundamentals
Perhaps the best argument that one can make for stocks is that many hold doubts about the continuing bull market. The reasons for these doubts are understandable, as the economic recovery has been anemic and growth has slowed significantly - likely leading to lower profits in the future. As a result, corporations have aggressively cut costs, increased productivity and preserved cash - pushing profit margins to historically high levels.
When the QE Tide Recedes, Focus on What is Revealed
While there is fierce debate on the ultimate effectiveness of monetary stimulus surging from the central banks, one cannot dispute the boost that it has given to asset prices. While we may be seeing some "green shoots" of overall growth pick-up in the developed world, the post-crisis recovery in asset values has not been primarily driven by economic or earnings growth. Instead, we have been in a high correlation environment where the rising tide lifted most diversified investor boats as repressed "risk-free" rates pushed money out into riskier asset classes.
Reflections on 2013: What's Important, What's Not, and What's Ahead
A tale of 2 halves with lingering questions characterizes what we can say was the story for housing for 2013. In the first half of the year, rates were low as the 10 year note was well under 2%. People were still refinancing, as home prices rocketed. Multiple bids were common, and pundits like Ivy Zelman cheered the improving market with praise like "Housing is in Nirvana".
Too Big to Pop
by Peter Schiff of Euro Pacific Capital,
Most economic observers are predicting that 2014 will be the year in which the United States finally shrugs off the persistent malaise of the Great Recession. As we embark on this sunny new chapter, we may ask what wisdom the five-year trauma has delivered.
Slow Growth and Short Tails
by Nouriel Roubini of Project Syndicate,
The global economy will grow faster in 2014 than it did in 2013, while tail risks will be lower. But, with the possible exception of the US, growth will remain anemic in advanced economies, and emerging-market fragility - including Chinas uncertain efforts at economic rebalancing - could become a drag on global growth.
Bitcoin Takes on Gold
by John Browne of Euro Pacific Capital,
Ever since President Nixon broke the US dollars last link to gold, the world has been set adrift on a sea of fiat currencies that have been increasingly debased, serving the interests of governments and financial elites. For the last five years, central banks have imposed near-zero rates of interest that have helped push up stock, bond, and real estate prices, but have made it nearly impossible for savers to receive meaningful returns on bank deposits.
China's Consumer Stocks: Opportunities Despite Slower Growth
by Richard Flax of PIMCO,
A weaker macro environment and curbs on spending by government bureaucrats have hit a range of consumer businesses and, in some cases, forced a reassessment of expansion plans. While Chinese consumption may be challenged in the near term, we think the impact will be felt most in the retail sector where slowing demand is compounded by oversupply. We see opportunity in other sectors that benefit from secular demand growth and constrained supply or strong brands, notably casinos and luxury sectors.
PIMCO Cyclical Outlook for the Americas: Riding the Cross-Currents of Higher U.S. Growth and the Fed
In the U.S., lower fiscal drag and the possibility of higher consumer and corporate spending should drive growth higher in 2014. Supported by higher U.S. growth and stabilization in Europe and China, Latin America is set to grow 3%-4% on average, but with a large dispersion across countries. Canada should benefit from the U.S. recovery but will likely lag U.S. growth due to lower consumption and residential investment.
Five Strategies for a Rising-Rate Environment Revisited
In June 2010, we recommended five strategies for a rising-rate environment, acknowledging that we had no idea when or how abruptly rates would rise. Indeed, rates fell since we wrote that article. But they are on the rise again. After reviewing how our original five strategies performed, we’ll now present our revised recommendations for investing as rates increase.
The Monster That Is Europe
This week, Geert Wilders and his Party for Freedom in the Netherlands and Marine Le Pen of the Front National (FN) of France held a press conference in The Hague to announce that they will be cooperating in the elections for the European Parliament next spring and hope to form a new eurosceptic bloc.
The Power of the Platform: The Promise and Peril of Technology Investing
by Ryan Jacob of Jacob Asset Management,
Without question, technologys rapid development during the past 20 years has played an incredibly powerful and largely positive role in furthering the progress and productivity of modern economies throughout the world. Technologys track record as a profitable investment theme, however, is a bit cloudier.
Viewpoints from AAM - Navigating the New High Landscape
December, historically the best month to own equities, has begun with a whimper with the S&P 500 closing at a loss each of the first four days of the month. If you include the last trading day of November, that makes five days in a row of red-filled screens for a total loss of 1.23% for the S&P 500. In the grand scheme of things that is a pretty small loss but it already has pundits dismissing the chances of a "Santa Claus Rally" and others saying the recent new market high of 1807.23 for the S&P 500 reached on November 27 might be its last.
One of the Most Notable Stories of the Year: Energy Renaissance in the U.S.A.
Only a few years ago, we were contemplating the supply constraints facing the petroleum industry, as many major oil fields around the world were facing a decline in production. Now, with the disruptive technology in shale oil and gas, we may be looking forward to decades of drilling.
PIMCO Cyclical Outlook: Synchronized Optimism
by Saumil Parikh of PIMCO,
In the U.S., the abatement of fiscal policy tightening combined with steady improvements in labor market demand and higher asset valuations is likely to drive an increase in real growth. The eurozone should finally emerge from recession in 2014, and Japan is likely to continue to grow with the continued assistance of extraordinarily expansive policies. In China, external demand will likely improve, but domestic demand will likely slow somewhat.
Muddling Through: The 'Realpolitik' of the Eurozone Crisis
by Andrew Bosomworth of PIMCO,
The long-term cost of Europes economic recovery is likely to challenge social tolerance and political will to achieve a fully integrated fiscal and political union. Although able to exploit the untapped potential of European treaties, the soon-to-be-elected 8th European Parliament looks more likely to continue to muddle through. We see low medium-term risk for government and corporate bonds with maturities of up to three years, but caution may be required for securities with longer maturities and lower down in the capital structure.
Fed Creating More Financial Market Uncertainty
by John Browne of Euro Pacific Capital,
Although the U.S. stock market continues to hit new nominal highs on a nearly daily basis, the U.S. economy bumps along at a lackluster pace. This disconnect has been achieved by a massive Fed experiment in monetary stimulation.
Did the Government Shutdown Help the Economy?
Take the government shutdown in October, when the House and Senate fought over the debt ceiling. Economic data wasn?t released, services were halted, national parks were closed, and "non-essential government workers were told to stay home. As a result, GDP was expected to collapse. Yet, data released this week reveal a different, stronger image of the U.S. economy. I think Shakespeare would deem the media?s fear mongering tactics as Much Ado About Nothing.
No Silver Bullets in Investing
by James Montier of GMO,
In a new white paper today, James Montier of GMOs asset allocation team reviews recent "innovation in our industry." He argues, "one of the myths perpetuated by our industry is that there are lots of ways to generate good long-run real returns, but we believe there is really only one: buying cheap assets."
The Eastern Lust for Gold
Having replaced savings with debt on both the national and individual levels, I think its well past time for Westerners to take a few lessons from our creditors in the East. Many Americans consider gold a "barbarous relic," but in Asia, the yellow metal remains the bedrock of individual savings plans. This means that either greater than half of the worlds population are barbarians, or theyve held onto an important tradition that our culture has forgotten.
Patience in Asia
Investing in a multitude of markets and companies as we do within the Templeton Emerging Markets Group means that at any given point in time it may appear to some that they are underperforming or outperforming any particular benchmark index or market. Such is the nature of global financial markets. Of course, wed like all of our investments to go straight up, but at the same time continually like to find new bargains for investors.
Arsonists Running the Fire Brigade
In the old days, central banks raised or lowered interest rates if they wanted to tighten or loosen monetary policy. In a Code Red world everything is more difficult. Policies like ZIRP, QE, LSAPs, and currency wars are immensely more complicated. Knowing how much money to print and when to undo Code Red policies will require wisdom and foresight. Putting such policies into practice is easy, almost like squeezing toothpaste. But unwinding them will be like putting the toothpaste back in the tube.
Results 2,251–2,300
of 2,772 found.
