Peace of Mind Requires Leaving the Herd

Winding your way down on Baker Street
Light in your head and dead on your feet
Well, another crazy day
You’ll drink the night away
And forget about everything
This city desert makes you feel so cold
It’s got so many people, but it’s got no soul
And it’s taken you so long
To find out you were wrong
When you thought it held everything
You used to think that it was so easy
You used to say that it was so easy
But you’re trying, you’re trying now
Another year and then you’d be happy
Just one more year and then you’d be happy
But you’re crying, you’re crying now

-Baker Street, by Gerry Rafferty
. . . . .

Jesse Livermore was an early twentieth-century investor who made and lost several fortunes. As speculators go — and speculation and investing are distinctly different pursuits — Livermore ranked among the finest. He made fortunes short selling stocks when everyone else was long during the crashes of 1907 and 1929. The consummate market historian, much of Livermore’s success was attributed to his dedicated study of the human condition.

Livermore wrote, “All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance and hope. That is why the numerical formations and patterns recur on a constant basis.” Continue reading →

Week In Brief: May 3, 2019

These last two weeks saw stocks storm the castle ramparts. Elude the archers. Scale the walls and wrest control from the bears. By week’s end, former record highs were conquered. With bulls establishing camp upon the newly taken plateaus of all-time highs. As equities forged ahead. Endeavoring to unite all asset classes and establish peace throughout the Seven Kingdoms.

Or, I just need a break from Game of Thrones.

Last week, the Nasdaq and S&P 500 added 0.22 percent and 0.20 percent last week, respectively. The Dow fell 0.14 percent. Financials’ 1.34 percent climb and Health Care’s 1.29 percent gain led all sectors. Internationally, Developed Markets jumped 0.81 percent while Emerging Markets slid 0.34 percent. Small Caps were up on the week as the Russell 2000 gained 0.98 percent. Kinda nice when you pull most of your revenue from the world’s best economy (domestic) as the Smalls typically do. The S&P 500 and Nasdaq sit within a whisper of record highs. The Dow is sitting 1.2 percent from its record level. Continue reading →

Week in Brief: April 12th

Yin and yang. All things serving as inseparable and contradictory opposites. Preserving the greater balance of the universe and symmetry in all things. Male and female. Dark and light. Old and Young. Q4 2018 and Q1 2019.

The last six months have represented an extraordinary cycle. A really bad quarter (Q4 ) followed by a really good quarter (Q1). Three other similar cycles have occurred since the financial crisis ended in 2009. In each case, the following quarter was also positive and better than average.

Especially positive given that the S&P 500 sits a mere one percent below last year’s all-time high.

Earnings season truly kicked off last week. JP Morgan, PNC, and Wells Fargo reported Friday. Citi and Goldman reported Monday. With the pace picking up this week. A slew of positive reports from the likes of UnitedHealth Group, BlackRock and Bank of America, among others, has elevated stock prices. Continue reading →

Socialism’s False Prophets

During 2016’s election, Senator Bernie Sanders fueled his candidacy by feeding a bill of goods to young people. Cynically capitalizing on their lack of knowledge and life experience. And hinting at utopian promises that the nation was in no position to deliver.

In so doing, Sanders secured roughly 84 percent of the thirty-and-under vote in key primaries like Iowa and New Hampshire.

Accordingly, it should not surprise to find that economic socialism seems to resonate with so many American Millennials. Disconcerting when you consider that even recently, being called a socialist in America was an insult.
Continue reading →

Week In Brief: March 29

Like a teenager’s allowance, Q1 came and went. What a quarter it was! Following Q4’s equity rout during which the S&P 500 lost 16 percent, Q1 calmed an angst-ridden global investment community. Turning in the best Q1 stock-market performance in a decade.

Equities were revivified by signs that inflationary pressures remained contained. Because lower inflation allows for higher PE multiples. And keeps the Fed at bay. Grounding two birds with one bullish stone. Allowing stocks to rebound from the losses suffered in the final months of 2018.

Moreover, despite downbeat Q1 earnings projections, investors have grown increasingly optimistic following the Fed’s cautious shift. After pulling money from U.S. stock mutual and exchange-traded funds at the start of the year, more than $25 billion flowed back in during the week ended March 13, the largest weekly inflow in a year.
Continue reading →

2019’s Potentially Market-Moving Motifs [Part II]

Last week’s missive featured the first of two installments detailing this year’s potentially market-moving issues and events. Providing analysis of ongoing domestic economic and political issues that could move the market winds (here). This week, we broaden our perspective. Moving overseas to consider the regions, issues and events that may influence investment markets before 2021.

While no such list can be exhaustive, we believe this two-part series effectively covers those topics meriting scrutiny. Nor should our list be compared with those contrived within most consumer periodicals. As ours emanate from the investor’s perspective. Not that of the average buff, political junkie or animal lover. We will not spend time on this year’s ballyhooed superhero flicks, favored dog breeds, nor top names for girls.

Last year, TIME magazine chose members of the media, or as they put it, “Guardians of the War on Truth,” as the most influential person(s) of 2018. Even as recent polls and surveys by Gallup, Pew and the Columbia School of Journalism reveal that public trust in the media continues to decline. Which is rather like Wall Street nominating itself as the year’s most influential person in 2009. Right after it helped usher in the Credit Crisis.
Continue reading →

Week In Brief: February 22nd

The S&P 500 rose 0.62 percent over last week’s holiday-shortened trading week. Aside from biotech and energy, everything ended higher. Utilities, precious metals, small and mid-caps led the way. The S&P 500 has risen 11.4 percent for the year. Among its better starts in decades. Meanwhile, the DJIA notched its ninth-straight weekly gain. Returning 16 percent over that span.

Positively, the advance has been global.

The Shanghai composite index scored its seventh-straight weekly gain. Having climbed 12.4 percent. Japan’s Nikkei has posted six positive weeks over the last seven. 12 percent above its December low. And European stocks have been higher seven of the past eight weeks. Elevating 12.6 percent since December 27th.
Continue reading →

2019’s Potentially Market-Moving Motifs

Renown wild man and physicist Richard Feynman said, “Nature uses only the longest threads to weave her patterns, so that each small piece of her fabric reveals the organization of the entire tapestry.”

Traditionally woven by hand on a loom, a tapestry comprises innumerable threads that, though individually hidden in the completed work, aggregate to establish whatever pattern or theme the artisan had in mind.

On its own, each thread remains indiscernible. Insignificant. Together, however, these threads convey a bigger picture. Capturing the imagination through its color, complexity, character and creativity. Adding up to a visual narrative that cannot be ignored.
Continue reading →