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Tag Archives: Bull

Seth Levine: COVID-19 Is Not The Last War

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...

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Robertson: When “Stuff” Gets Real

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...

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

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...

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Technically Speaking: On The Cusp Of A Bear Market

“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...

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

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...

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Robertson: One Is The Loneliest Number

With passive funds continuing to grow share at the expense of actively managed funds and markets on a roll since late 2018, analyzing individual stocks can seem like a quaint if not downright outdated exercise. Indeed, many investors and advisors have become so deeply habituated to passive investing that they don’t even consider other alternatives. As a result, the exercise of analyzing individual stocks has become a fairly lonely pursuit. This reality, however, also spells opportunity. While...

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Seth Levine: Commoditizing My Framework For A New Paradigm

When it comes to investing it’s never different this time; nor, however, is it ever the same. This difficult-to-navigate paradox creates a scarcity of longevity. Today’s persistently low yield environment has upped the ante and put many marquis names out of business. To be fair, alpha’s been elusive of late. It’s not that anyone suddenly became dumb. Rather, traditional methodologies are less robust today. Perhaps adopting a commodity framework can help generate returns in these investment...

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Robertson: Only Time Will Tell

A great way to learn more about any phenomenon is to gain perspective by examining it from different angles. While it is certainly true that a great deal is known about stock returns, it is also true that a broader understanding of the subject has been hampered by overly simplified narratives and recency bias. What is needed is a fresh perspective and a fairly recent (2018) study provides just that. The study helps to better understand the proposition of investing in stocks and in doing so,...

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Seth Levine: The Unsurprising Repo Surprise

Have you heard? There’s trouble in the repo markets. Even casual investment market participants probably know that something’s amiss. While only a handful of investors participate in repo, this obscure corner of the investment markets rests at the epicenter of the financial system—hence all the attention. The turmoil caught many by surprise, prompting the Federal Reserve (Fed) into emergency action. However, the real surprise is, in my opinion, why this took any of us by surprise to begin...

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Mauldin: The Fed Has Quietly Started QE4

In September of last year, something still unexplained happened in the “repo” short-term financing market. Liquidity dried up, interest rates spiked, and the Fed stepped in to save the day. Story over? No. The Fed has had to keep saving the day, every day, since then. We Hear Different Theories The most frightening one is that the repo market itself is actually fine, but a bank is wobbly and the billions in daily liquidity are preventing its collapse. Who might it be? I have been told, by...

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