Rules to Remember I worked at Merrill Lynch a number of years ago in the Equity Research department. The Chief U.S. Economist at the time was David Rosenberg, a very savvy and well-respected analyst on the Street. He would from time to time share “10 Market Rules to Remember” created by Bob Farrell, a former …
Month: October 2017
Exchange-Traded Product Fund Flows
The Wall Street Journal’s Daily Shot posted this chart from Credit Suisse today on exchange-trade product flows. It would certainly appear that fund flows have been driving US equities, large cap in particular. My takeaway: Large cap US equities are not particularly attractive right now for new money.
Sell Everything?
According to a blog post from Pension Partners, the Dow is trading at one of its most overbought levels in history on a relative strength basis (RSI) going back to 1900. https://pensionpartners.com/one-of-the-most-overbought-markets-in-history/ However historically, similar signals have been bullish in the near-term, on average. According to the author’s analysis, the Dow has actually been higher …
An ETF Bubble?
I listened to a webcast yesterday with the Mauldin Economics team. Jared Dillian, one of the members of said team, talked about bubbles and specifically highlighted ETFs and passive investment strategies. He made a very interesting point about how ETFs are basically the asset class “you have to own now”, similar to tech stocks at …
The Future vs. The Past
Everything in the stock market is cyclical. As a result, we often find ourselves comparing the current business and market cycles to previous cycles to help us get a sense of where we might be going and also to provide us with the explanations we crave. On most metrics, current market valuation levels are fairly …
“Stock Market Expectations Have Never Been Higher”
A very interesting chart/analysis from the folks over at J. Lyons Fund Management. Over 62% of Investors see the market rising further over the next year. Additionally, more than 10% of respondents believe there is a 100% probability the market will rise over the next 12-months. Expectations have been this high only two other times …
Not All Retail is Created Equally
The narrative for physical retail has not been favorable over the past few years. The internet, Amazon in particular, is basically portrayed as the Nothing from “The Neverending Story”. An all-consuming force that appears unstoppable whose ultimate destiny is to end the world as we know it. I have a bit of a different perspective. …
Valuation is Not a Catalyst
I’m not a Fed Model disciple but I feel it is among the best explanations, if there are any, for market valuations this cycle. As I’ve mentioned in the past, the model has several shortcomings but provides fairly insightful relative context between the last three business cycles. The cycle leading up to the dot com …