Thursday , April 2 2020
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Lance Roberts

Lance Roberts

Lance Roberts has sharpened that lens with 30 years in the investing world from private banking and investment management to private and venture capital. Lance Roberts’ perspective and common sense analysis is sought after by media outlets such as Fox 26 News in Houston, CNBC, CNN and Fox Business News along with numerous publications including the Wall Street Journal, USA Today, Reuters and the Washington Post. Roberts is the Editor of the X-Factor report and publishes the blog Daily X-change.

Articles by Lance Roberts

Technically Speaking: 5-Questions Bulls Need To Answer Now.

2 days ago

In last Tuesday’s Technically Speaking post, I stated:
“From a purely technical basis, the extreme downside extension, and potential selling exhaustion, has set the markets up for a fairly strong reflexive bounce. This is where fun with math comes in.
As shown in the chart below, after a 35% decline in the markets from the previous highs, a rally to the 38.2% Fibonacci retracement would encompass a 20% advance.
Such an advance will ‘lure’ investors back into the market, thinking the ‘bear market’ is over.”
Chart Updated Through Monday

Not surprisingly, as we noted in this weekend’s newsletter, the headlines from the mainstream media aligned with our expectations:

So, is the bear market over? 
Are the bulls now back in charge?
Honestly, no one knows for certain. However, there are

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Where “I Bought It For The Dividend” Went Wrong

3 days ago

[unable to retrieve full-text content]"I bought it for the dividend," is not an investment strategy, it is a rationalization for not having properly managed portfolio risk during declines. While the idea of buying dividend stocks is correct, there is a better way to do it over the long-run.

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Bull Market? No, The Bear Still Rules For Now (Full Report)

5 days ago

Bull Market? No, The Bear Still Rules
MacroView: The Fed Can’t Fix What’s Broken
Sector & Market Analysis
401k Plan Manager
Follow Us On: Twitter, Facebook, Linked-In, Sound Cloud, Seeking Alpha
2020 Investment Summit – April 2nd.
The “2020 SOCIALLY DISTANT INVESTMENT SUMMIT” is coming on Thursday, April 2nd.
Click the link below to receive an email with a special “invitation only” link when the summit goes “live.” (Current newsletter subscribers are already registered.)

Catch Up On What You Missed Last Week

NOTE: During these tumultuous times, we are unlocking our full newsletter to help you navigate the markets safely. Make sure you subscribe to RIAPRO.NET (Free 30-Day Trial) if you want to keep receiving the full report after the storm passes.
Bull Market? No, The Bear Still

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#MacroView: The Fed Can’t Fix What’s Broken

6 days ago

“The Federal Reserve is poised to spray trillions of dollars into the U.S. economy once a massive aid package to fight the coronavirus and its aftershocks is signed into law. These actions are unprecedented, going beyond anything it did during the 2008 financial crisis in a sign of the extraordinary challenge facing the nation.” – Bloomberg
Currently, the Federal Reserve is in a fight to offset an economic shock bigger than the financial crisis, and they are engaging every possible monetary tool within their arsenal to achieve that goal. The Fed is no longer just a “last resort” for the financial institutions, but now are the lender for the broader economy.
There is just one problem.
The Fed continues to try and stave off an event that is a necessary part of the economic cycle, a debt

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#WhatYouMissed On RIA This Week: 03-27-20

6 days ago

[unable to retrieve full-text content]Here is what you might have missed from the RIA Crew last week. A compilation of our best blogs, newsletter, podcasts, the daily radio show and commentary from RIAPRO.NET.

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Seth Levine: COVID-19 Is Not The Last War

6 days ago

These are truly remarkable times in the investment markets. The speed, intensity, and ubiquity of this selloff brings just one word to mind: violence. It would be remarkable if it wasn’t so destructive. Sadly, the reactions from our politicians and the public were predictable. The Federal Reserve (Fed) faithfully and forcefully responded. Despite its unprecedented actions, it seems like they’re “fighting the last war.”
Caveat Emptor
My intention here is to discuss some observations from the course of my career as an investor and try to relate them to the current market. I won’t provide charts or data; I’m just spit-balling here. My goal is twofold: 1) to better organize my own thoughts, and; 2) foster constructive discussions as we all try to navigate these turbulent markets. I realize

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Fed Trying To Inflate A 4th Bubble To Fix The Third

7 days ago

Over the last couple of years, we have often discussed the impact of the Federal Reserve’s ongoing liquidity injections, which was causing distortions in financial markets, mal-investment, and the expansion of the “wealth gap.” 
Our concerns were readily dismissed as bearish as asset prices were rising. The excuse:

“Don’t fight the Fed”

However, after years of zero interest rates, never-ending support of accommodative monetary policy, and a lack of regulatory oversight, the consequences of excess have come home to roost. 
This is not an “I Told You So,” but rather the realization of the inevitable outcome to which investors turned a blind-eye too in the quest for “easy money” in the stock market. 
It’s a reminder of the consequences of “greed.” 

The Liquidity Trap
We previously

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Robertson: When “Stuff” Gets Real

7 days ago

We all can be tempted to follow the path of least resistance and in a competitive world there are always incentives to get the most bang for the buck. Often this means taking shortcuts to gain some advantage. In a forgiving world, the penalties for such transgressions tend to be small but the rewards can be significant. When conditions are extremely forgiving, shortcuts can become so pervasive that failing to take them can be a competitive disadvantage.
In a less forgiving world, however, the deal gets completely flipped around and penalties can be significant for those who take shortcuts. This will be important for investors to keep in mind as rapidly weakening economic fundamentals and increasing stress in financial markets make for far less forgiving conditions. When things get real,

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Technically Speaking: The One Thing – Playing The “Bear Market” Rally.

9 days ago

Let’s flashback to a time not so long ago, May 2019.
“It was interesting to see Federal Reserve Chairman Jerome Powell, during an address to the Fernandina Beach banking conference, channel Ben Bernanke during his speech on corporate ‘sub-prime’ debt (aka leveraged loans.)
‘Many commentators have observed with a sense of déjà vu the buildup of risky business debt over the past few years. The acronyms have changed a bit—’CLOs’ (collateralized loan obligations) instead of ‘CDOs’ (collateralized debt obligations), for example—but once again, we see a category of debt that is growing faster than the income of the borrowers even as lenders loosen underwriting standards. Likewise, much of the borrowing is financed opaquely, outside the banking system. Many are asking whether these developments

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Everyone Wanting To Buy Suggests The Bear Still Prowls (Full Report)

12 days ago

Everyone Wanting To Buy Suggests The Bear Still Prowls
MacroView: Mnuchin & Kudlow Say No Recession?
Sector & Market Analysis
401k Plan Manager

Follow Us On: Twitter, Facebook, Linked-In, Sound Cloud, Seeking Alpha

Catch Up On What You Missed Last Week

NOTE: During these tumultuous times, we are unlocking our full newsletter to help you navigate the markets safely. Make sure you subscribe to RIAPRO.NET (Free 30-Day Trial) if you want to keep receiving the full report after the storm passes.
Everyone Wanting To Buy Suggests The Bear Still Prowls

“If you own 10% equities, as we do, and the market falls 100%, you will lose 10%. That said, you have 90 cents on the dollar to buy equities for free.” – Michael Lebowitz

Let me explain his comment.
Last week, we wrote a piece titled: Risk

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#MacroView: Mnuchin & Kudlow Say No Recession?

13 days ago

“Treasury Secretary Steven Mnuchin on Sunday downplayed the likelihood of an economic recession as the economy takes a beating from the coronavirus outbreak.

“I just think, in general, I would be very careful to put too much emphasis on what bond rates are doing, what interest rates are doing. Or even in the short, short run, the stock market. I think you have a lot of mood swings here and I don’t think it reflects the fundamentals.” – Larry Kudlow via CNBC

I understand they have to pander to the administration, but this is a stretch to say the least. 
Let’s dig into some facts to determine our real risks.
Even before COVID-19 had infected the planet, economic data, and inflationary pressures were already weakening. This already suggested the decade long economic expansion was

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#WhatYouMissed On RIA This Week: 03-20-20

13 days ago

We know you get busy and don’t check our website as often as you might like. Plus, with so much content being pushed out every week from the RIA Team, we thought we would send you a weekly synopsis of everything you might have missed.

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RIA Pro is our premium investment analysis, research, and data service. (Click here to try it now and get 30-days free)

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Michael Lebowitz, CFA and I dig into the

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Michael Markowski: Dip Buyers, Beware Of Sensational Headlines

13 days ago

Michael Markowski has been involved in the Capital Markets since 1977. He spent the first 15 years of his career in the Financial Services Industry as a Stockbroker, Portfolio Manager, Venture Capitalist, Investment Banker and Analyst. Since 1996 Markowski has been involved in the Financial Information Industry and has produced research, information and products that have been used by investors to increase their performance and reduce their risk.Read more at BullsNBears.com

Many investors are salivating to trade the dips in a stock market which is becoming increasingly more volatile.  It’s because Wall Street for the week ended March 13th according to the headlines had its worst week since 2008.  Its human nature to want to buy at fire sale prices.     

March 13, 2020

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Shedlock: Fed Trying To Save The Bond Market As Unemployment Explodes

13 days ago

Bond market volatility remains a sight to behold, even at the low end of the curve.

Bond Market Dislocations Remain

The yield on a 3-month T-Bill fell to 1.3 basis points then surged to 16.8 basis points in a matter of hours. The yield then quickly crashed to 3 basis points and now sits at 5.1 basis points.

The Fed is struggling even with the low end of the Treasury curve.

$IRX 3-Month Yield

Stockcharts shows the 3-month yield ($IRX) dipping below zero but Investing.Com does not show the yield went below zero.

Regardless, these swings are not normal.

Cash Crunch

Bloomberg reports All the Signs a Cash Crunch Is Gripping Markets and the Economy

In a crisis, it is said, all correlations go to one. Threats get so overwhelming that everything reacts in unison. And

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Margin Call: You Were Warned Of The Risk

14 days ago

I have been slammed with emails over the last couple of days asking the following questions:
“What just happened to my bonds?”

“What happened to my gold position, shouldn’t it be going up?”

“Why are all my stocks being flushed at the same time?”

As noted by Zerohedge:
“Stocks down, Bonds down, credit down, gold down, oil down, copper down, crypto down, global systemically important banks down, and liquidity down…
Today was the worst day for a combined equity/bond portfolio… ever…”

This Is What A “Margin Call,” Looks Like.
In December 2018, we warned of the risk. At that time, the market was dropping sharply, and Mark Hulbert wrote an article dismissing the risk of margin debt. To wit:
“Plunging margin debt may not doom the bull market after all, reports to the contrary

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Technically Speaking: Risk Limits Hit, When Too Little Is Too Much

16 days ago

For the last several months, we have been issuing repeated warnings about the market. While such comments are often mistaken for “being bearish,” we have often stated it is our process of managing “risk” which is most important.
Beginning in mid-January, we began taking profits out of our portfolios and reducing risk. To wit:
“On Friday, we began the orderly process of reducing exposure in our portfolios to take in profits, reduce portfolio risk, and raise cash levels.”
Importantly, we did not “sell everything” and go to cash.
Since then, we took profits and rebalanced risk again in late January and early February as well.
Our clients, their families, their financial and emotional “well being,” rest in our hands. We take that responsibility very seriously, and work closely with our

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Profits & Earnings Suggest The Bear Market Isn’t Over.

17 days ago

Is the bear market over yet?
This is the question that everyone wants to know. Why? So they can “buy the bottom.” 
For that reason alone, I would suggest the current “bear market” is not over yet. Historically speaking, at the bottom of bear market cycles, as we saw in 1932, 1974, 2002, and 2008, there are few individuals willing to put capital at risk.
Given the large number of people on social media clamoring to jump back in the market given the rally this past Friday, it suggests that “optimism,” and “recency bias,” are still far too prevalent in the market.
As noted in this past weekend’s newsletter, Bob Farrell, a legendary investor, is famous for his 10-Investment Rules to follow.
“Rule #8 states:
Bear markets have three stages – sharp down, reflexive rebound and a drawn-out

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Fox26 Interview: The Economic Impact Of COVID-19

18 days ago

On Friday morning, I visiting with my friends at Fox26 in Houston to discuss the economic, market, and investing impact of COVID-19.

“Will it get worse before it gets better?
Lance Roberts, chief investment strategist with RIA Advisors, explains how the COVID-19 coronavirus is impacting our economy.”

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Market Crash. Is It Over, Or Is It The “Revenant”

19 days ago

Market Crash: Is It Over, Or Is It The Revenant?
MacroView: Fed Launches A Bazooka To Kill A Virus
Financial Planning Corner: Tips For A Volatile Market
Sector & Market Analysis
401k Plan Manager

Follow Us On: Twitter, Facebook, Linked-In, Sound Cloud, Seeking Alpha

Catch Up On What You Missed Last Week

Market Crash. Is It Over, Or Is The “Revenant?”
If you haven’t seen the movie “The Revenant” with Leonardo DiCaprio, it is a 2015 American survival drama describing frontiersman Hugh Glass’s experiences in 1823. Early in the movie, Hugh, an expert hunter, and tracker, is mauled by a grizzly bear. (Warning: the scene is very graphic)
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In the scene, the attack comes in three distinct waves.
The bear attacks, and brutally mauls Hugh, who plays dead to survive. The

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#MacroView: Fed Launches A Bazooka To Kill A Virus

20 days ago

Last week, we discussed in Fed’s ‘Emergency Rate Cut’ Reveals Recession Risks” that while current economic data may not suggest a possibility of a recession was imminent, other “off the run” data didn’t agree.
“We are likely experiencing more than just a ‘soft patch’ currently despite the mainstream analysts’ rhetoric to the contrary. There is clearly something amiss within the economic landscape, even before the impact of COVID-19, and the ongoing decline of inflationary pressures longer term was already telling us just that.”
The plunge in both 5- and 10-year “breakeven inflation rates,” are currently suggesting that economic growth over the next couple of quarters will drop markedly. The last time there was such a sharp drop in inflation expectations at the beginning of the “financial

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#WhatYouMissed On RIA This Week: 03-13-20

20 days ago

We know you get busy and don’t check our website as often as you might like. Plus, with so much content being pushed out every week from the RIA Team, we thought we would send you a weekly synopsis of everything you might have missed.

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RIA Pro is our premium investment analysis, research, and data service. (Click here to try it now and get 30-days free)

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Danny Ratliff, CFP and Lance Roberts, CIO

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Special Report: Panic Sets In As “Everything Must Go”

21 days ago

Note: All charts now updated for this mornings open.

The following is a report we generate regularly for our RIAPRO Subscribers. You can try our service RISK-FREE for 30-Days.

Headlines from the past four-days:

Dow sinks 2,000 points in worst day since 2008, S&P 500 drops more than 7%

Dow rallies more than 1,100 points in a wild session, halves losses from Monday’s sell-off

Dow drops 1,400 points and tumbles into a bear market, down 20% from last month’s record close

Stocks extend losses following 15-minute ‘circuit breaker’ halt, S&P 500 drops 8%

It has, been a heck of a couple of weeks for the market with daily point swings running 1000, or more, points in either direction.

However, given Tuesday’s huge rally, it seemed as if the market’s recent rout might be

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Technically Speaking: On The Cusp Of A Bear Market

23 days ago

“Tops are a process, and bottoms are an event”
Over the last couple of years, we have discussed the ongoing litany of issues that plagued the underbelly of the financial markets.
The “corporate credit” markets are at risk of a wave of defaults.
Earnings estimates for 2019 fell sharply, and 2020 estimates are now on the decline.
Stock market targets for 2020 are still too high, along with 2021.
Rising geopolitical tensions between Russia, Saudi Arabia, China, Iran, etc. 
The effect of the tax cut legislation has disappeared as year-over-year comparisons are reverting back to normalized growth rates.
Economic growth is slowing.
Chinese economic data has weakened further.
The impact of the “coronavirus,” and the shutdown of the global supply chain, will impact exports (which make up 40-50% of

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Market Crash Reveals The “Liquidity Problem” Of Passive Investing

24 days ago

“When it comes to investing, it’s a losing proposition to try and be anything better than average.
If there’s no point in trying to beat the market through ‘active’ investing – using mutual funds that managers run, selecting what they hope are market-beating investments – what is the best way to invest? Through “passive” investing, which accepts average market returns ­(this means index funds, which track market benchmarks)” – Forbes
The idea of “passive indexing” sounds harmless enough, buy an “index” and be an “average” investor.
However, it isn’t as simple as that, and we have spilled a lot of ink digging into the relative dangers of it. Last week, investors saw those risks first hand.
The biggest risk to investors is when “passive indexers” turn into “panic sellers.” 
While the

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Playing Defense: We Don’t Know What Happens Next

26 days ago

Playing Defense: We Don’t Know What Happens Next
MacroView: Fed Emergency Cut Exposes “Recession” Risks
Financial Planning Corner: Tips For A Volatile Market
Sector & Market Analysis
401k Plan Manager

Follow Us On: Twitter, Facebook, Linked-In, Sound Cloud, Seeking Alpha

Catch Up On What You Missed Last Week

Playing Defense: We Don’t Know What Happens Next
Last week, we discussed “Navigating What Happens Next,” and set out to answer 3-important questions:
Is the correction over?
Is this a buying opportunity?
Has the decade long bull market ended?
We also included a set of “rules to follow,” based on our analysis. (For your review, you will find them posted again at the bottom)
Importantly, while we have adhered to our investment process and discipline, to protect capital while

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#MacroView: Fed’s “Emergency Rate Cut” Reveals Recession Risks

27 days ago

Last week, I discussed in “Recession Risks Tick Up” that while current data may not suggest a possibility of a recession was imminent, other “off the run” data didn’t agree.
“The problem with most of the current analysis, which suggests a “no recession” scenario, is based heavily on lagging economic data, which is highly subject to negative revisions. The stock market, however, is a strong leading indicator of investor expectations of growth over the next 12-months. Historically, stock market returns are typically favorable until about 6-months prior to the start of a recession.”
“The compilation of the data all suggests the risk of recession is markedly higher than what the media currently suggests. Yields and commodities are suggesting something quite different.”

In this particular

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#FPC: Tips For A Volatile Market

27 days ago

These last couple of weeks have been crazy in the markets, last week we saw steady declines and this week we’re yo-yoing from one of the best days in the market to date to one of the worst. It seems like the sky is falling, it always does when we get into one of these environments, but fret not we’ve been here before. The question is what will you do different this time around? Since you’re here you’re probably already doing something different in reading the Real Investment Advice Newsletter, maybe you’re a client or a RIA Pro subscriber. Those resources will help you navigate these choppy waters.
Here are a few additional tips.
Understand that it’s ok to take profits and pay taxes.
Have a discipline to your investing approach.
Wall Street promotes an “it’s always a good time to buy”

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#WhatYouMissed On RIA This Week: 03-06-20

27 days ago

We know you get busy and don’t check our website as often as you might like. Plus, with so much content being pushed out every week from the RIA Team, we thought we would send you a weekly synopsis of everything you might have missed.

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RIA Pro is our premium investment analysis, research, and data service. (Click here to try it now and get 30-days free)

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Mike Lebowitz and I dig into the wild market

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Technically Speaking: Sellable Rally, Or The Return Of The Bull?

March 3, 2020

Typically, “Technically Speaking,” is an analysis of Monday’s market action, and the relevant risk/reward dynamics for investors. However, this week, we need to update the strategy we lain out in this past weekend’s newsletter, “Market Crash & Navigating What Happens Next.”
Specifically, we broke down the market into three specific time frames looking at the short, intermediate, and long-term technical backdrop of the markets. In that analysis, our premise was a “reflexive bounce” in the markets, and what to do during the process of that move. To wit:
“On a daily basis, the market is back to a level of oversold (top panel) rarely seen from a historical perspective. Furthermore, the rapid decline this week took the markets 5-standard deviations below the 50-dma.”
Chart updated through

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