Category: Absolute Return Objective
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Fundamental Valuation: Is the Stock Market Cheap or Expensive?
For me, and everyone else even if they don’t realize it, the price trend is the final arbiter. For more than two decades, I’ve focused my efforts on developing systems to identify trends early in… Read More
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Stock Market Decline is Broad
We typically expect to see small company stocks decline first and decline the most. The theory is that smaller companies, especially micro companies, are more risky so their value may disappear faster. Below, we view the… Read More
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Fear is Driving Stock Trend…
Fear is now driving the stock market. As prices fall, investor sentiment indicators suggest that fear increases as prices fall. When sentiment gets to an extreme it often reverses, or it can become contagion and drive… Read More
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Seasonal Alpha? The Real Probability and Expectation of “Sell in May and Go Away”
Here is the trouble with a seasonal strategy. According to Standard & Poors, the S&P 500 has gained 1.05 % in May, though it was a volatile month. So, “sell in May and go away”… Read More
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Allocation to Stocks and Bonds is Unlikely to Give us What We Want
That was the lesson you learned the last time stocks became overvalued and the stock market entered into a bear market. I believe holding and re-balancing markets doesn’t give us the risk-adjusted returns we want.… Read More
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On Actively Managing Risk… and Persistence
Source: https://image-store.slidesharecdn.com/c3d3d5ae-e2eb-4e80-9d4c-88e2344b5572-original.jpeg I just keep doing what I do… Read More
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Where is the Inflation?
In How does monetary policy influence inflation and employment? and bond prices… I pointed out that even the Fed expected their monetary policy to eventually lead to inflation. The problem with economics and economist is they… Read More
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How does monetary policy influence inflation and employment? and bond prices…
Straight from the Federal Reserve website titled How does monetary policy influence inflation and employment? In the short run, monetary policy influences inflation and the economy-wide demand for goods and services–and, therefore, the demand for… Read More
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Recent Observations: Stock Market, Volatility, Absolute Returns
In case you missed them, here is a list of popular observations I’ve shared recently: This is When MPT and VaR Get Asset Allocation and Risk Measurement Wrong A Tale of Two Conditions for U.S. and… Read More
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My 2 Cents on the Dollar, Continued…
In My 2 Cents on the Dollar I explained how the U.S. Dollar is a significant driver of returns of other markets. For example, when the U.S. Dollar is rising, commodities like gold, oil, and foreign… Read More