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Uncategorized, Weekly Update

Bear Market Perspectives

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Published March 27, 2020

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This week, as we hunker down and ‘shelter-in-place’, we offer an assortment of bear market observations. First, we will start with noted market observer Josh Brown’s views on whether the stock market has seen its worst days yet. That is followed by Dan Sullivan’s more historical view on bear markets. We remind readers that Wall Street is in New York City, which has been on the front lines of the virus in the USA over the past few days and weeks. It’s no surprise, then, that the investment community in NYC will feel more besieged by the virus news than some other parts of the country. Keep that context in mind as you read. (more…)

Uncategorized, Weekly Update

The Coming Recession

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Published March 13, 2020

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This week the stock market made it crystal clear that it is fully expecting a recession in the coming months. Markets have delivered the second fastest decline in history, second only to a drop during the Great Depression. (more…)

Uncategorized, Weekly Update

The Market’s Narrative Goes ‘Pop’

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Published March 6, 2020

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The stock market runs on narratives. The story of the 4th quarter was one of a Fed on hold while corporate earnings recovered and the trade tiff with China was mostly cleared up. Stocks pushed higher on that story until mid-January. The coronavirus upended the notion of a global economic recovery but initially had little impact on U.S. markets. (more…)

Uncategorized, Weekly Update

The Fear Trade

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Published February 28, 2020

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The old market adage that stocks take the stairs up and an elevator down was on full display this week. After months of marching ever-higher, with investors becoming more and more complacent about ANY risk, stocks finally found something to be truly concerned about. (more…)

Uncategorized, Weekly Update

Euphoria?

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Published February 21, 2020

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The force with which certain stocks are blasting higher so far in 2020 has some investors wondering whether the overall market is entering the “blow off top” euphoria phase that tends to characterize the end of a long bullish run. (more…)

Uncategorized, Weekly Update

All Hail the Central Banks!

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Published February 7, 2020

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We were reminded again this week of the psychological power of central banks over today’s market participants. An announcement early in the week of new money(!) pushed into Chinese markets by the Chinese central bank (PBOC) made stock investors forget all about the potential global economic hurdle that is the coronavirus (with investor enthusiasm aided by a reduction in the spread of the virus). (more…)

Uncategorized, Weekly Update

The Fallacy of Thinking Things Will Change

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Published January 31, 2020

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We found the following article from Nick Maggiuli’s blog Of Dollars and Data to be interesting and hope you will also:

“Assume I flip a coin 5 times and get the following result (let H = heads and T = tails):
HHHHH

What is the probability that my sixth flip is also a heads (H)? Assuming the coin is fair (equal likelihood of heads and tails), you already know that the answer is 50%. Because coin flips are an independent process, prior flips have no bearing on future flips. (more…)

Uncategorized, Weekly Update

Utilities(?!) Power Ahead

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Published January 24, 2020

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One of the oddities of the market so far in 2020 is the decline in interest rates. After rising in the latter half of 2019, interest rates appear to have rolled over and begun heading back down over the past month. While that’s not long enough to declare a trend, the behavior of interest rate sensitive sectors tells us that this is a significant shift. (more…)