Category: Absolute Return
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Time frames can be arbitrary and meaningless, or very useful in defining direction
I sometimes find myself having odd conversations about arbitrary time frames. Most people pick a time frame arbitrarily, so it doesn’t’ really make sense if they don’t know what they are doing. For example, if we… Read More
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Fear and Greed is Shifting and Models Don’t Avoid the Feelings
Investors are driven by fear and greed. That same fear and greed drives market prices. It’s Economics 101 “Supply and Demand”. Greed drives demand, fear drives selling pressure. In fact, investors are driven by the fear… Read More
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The Trend of the U.S. Stock Market
When I say “The Trend” that could mean an infinite number of “trends“. The general definition of “trend” is a general tendency or course of events. But when I speak of “The Trend” I mean a direction that something… Read More
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Using the Month of September to Understand Probability and Expectation
September is the month when the U.S. stock market’s three most popular indexes usually perform the poorest. So say the headlines every September. I first wrote this in September 2013 after many commentators had published information about… Read More
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Why Index ETFs Over Individual Stocks?
A fellow portfolio manager I know was telling me about a sharp price drop in one of his positions that was enough to wipe out the 40% gain he had in the stock. Of course, he had… Read More
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Uncharted Territory from the Fed Buying Stocks
I remember sometime after 2013 I told someone “The Fed is buying stocks and that’s partly why stocks have risen so surprisingly for so long”. He looked puzzled and didn’t seem to agree, or understand.… Read More
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Low Volatility and Managed Volatility Smart Beta is Really Just a Shift in Sector Allocation
There is a lot of talk nowadays about “Smart Beta”. Smart beta refers to an investment style where the manager passively follows an index designed to take advantage of perceived systematic biases or inefficiencies in the… Read More
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Human judgment, good and bad, will drive investment decisions and financial-market outcomes for the rest of our lives and beyond.
Source: http://www.project-syndicate.org/commentary/will-computer-algorithms-replace-humans-in-financial-markets-by-robert-j–shiller-2015-07#hmXdmoDjMyvHOw9U.99 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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Global Stock Market Trends
Stock markets around the world declined -2% or so arguing over which flag to fly. It was a good day for a cash position, or something other than U.S. and International stocks. Below is a table of U.S.… Read More