"Investing should be more like watching paint dry or grass grow. If you want excitement take $800 and take it to Las Vegas " - Paul Samuelson. Spoken like the Nobel Laureate he was, Dr. Samuelson's simple, timeless words of wisdom resound true until this day. Long-term investors should focus on fundamental data rather than … Continue reading Paint, Grass, and Data
I wrote in December widespread market fear and pessimism in the US seemed like an overreaction based on fundamental data. To be clear, I don't think US stocks are a good bargain, and I prefer emerging markets anyway. But the YTD rally does support my view that the sell-off in Q4 was technical, and as … Continue reading Cracks in the Wall
'Twas the eve before Christmas and not a Santa rally in sight. Year-to-date the S&P 500 is on the cusp of a bear market, closing down -19.78% from its all-time high of 2,930.75 in September. The sell-off began in October and has been swift and fierce, summoning flashbacks of the S&P 500's harrowing drawdown of … Continue reading Fear and Santa
The last two months have been choppy for stocks. The S&P 500 is down about 8% and has given up its gain for the year. Emerging markets have outperformed since October, relatively speaking, but remain the biggest loser YTD, down about 16%. As usual, the financial media is searching, desperately, for something to fear. Does … Continue reading Much Ado About Something
A nod to The Fat Pitch blog for an excellent reminder of why macro still matters. In an age of fast money and high-frequency-trading, macro considerations may seem too slow and antiquated to be relevant. But as I wrote in my very first post (and many times since), it would behoove us to remember that financial markets … Continue reading Macro Matters
"...but in this world, nothing can be said to be certain, except death and taxes." -Benjamin Franklin Taxes are certainly top of mind as the Senate plans to vote on a final version of tax reform this week. There's still uncertainty about what will ultimately pass, but as of now, it seems at least a … Continue reading Death and Taxes
The markets saw some back and forth this month but the S&P 500 closed the quarter up about 5% and even bonds managed to eek out a small gain. The "Trump rally" is moving along, and the market still buys the president's campaign promises. But following the capitulation of repeal and replace, Trump's ability to … Continue reading Buy the Rumor, Sell the News
Yesterday, the US made history with an upset of presidential proportions. Despite being a huge underdog, Donald Trump clinched the presidency from strongly favored Hillary Clinton (who pollsters estimated had a 90% probability of winning). Following the upset, investor uncertainty spiked and Dow futures traded down more than 800 points. Yet the S&P 500 actually … Continue reading Surprise, Surprise
The first quarter started with a bang but ended with a thud. The US stock market was basically flat and the bond market was modestly up. The widespread global recession rhetoric seems to be quieting. This is particularly true in the US where we have been pointing out economic conditions are not as bad as … Continue reading Fitting the Earnings Shoe
As I've been pointing out, economic conditions in the US aren't as bad as some fear mongers in the financial media are portraying. To be clear, conditions aren't spectacular. Growth is muted and prospects aren't stellar. But on the margin, the US economy continues to grind forward with no imminent signs of the dreaded "R" … Continue reading The US Muddles Along
