Is the Global Financial Asset Portfolio the Perfect Indexing Strategy?

If there was such a thing as an indexing purist that person would simply buy all of the outstanding available financial assets in the world and call it quits.  In other words, they would “take what the market gives them” rather than trying to make active predictions about which parts…

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Rail Traffic Keeps on Chugging Along

Intermodal rail traffic posted a 5.4% gain in the most recent week bringing the 12 week moving average down to 6.1%.  That is a strong reading, but also a 3 month low.  The rate of change is clearly on the decline, however, it remains at levels that are still consistent…

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There Isn’t $10.8 Trillion “Stuffed Under Mattresses” Because of QE

I have to comment on this MarketWatch piece because I’ve now seen a number of people comment on it claiming that consumers are choosing to hold more low interest bearing assets in recent years.  This just isn’t correct. The article claims that Americans are stuffing $10.8 Trillion into mattresses and…

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Low Duration Means Low Risk? Not Necessarily

To protect their portfolios from rising interest rates and volatility, many high-yield investors have headed for short-duration strategies. We think some of the more popular approaches may expose investors to bigger hazards than they realize.


This isn’t a Stock Market Bubble, but it Could Become One

Last year I asked if we are in a stock market bubble.  My answer was no.  Much of the basis for that thinking was that sentiment was just too bearish in general.  There has been a tremendous amount of skepticism about the economy and the stock market for 5 years…

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Is a Big Equity Correction Imminent? Not Yet

Many investors think US stocks are due for a correction: They feel that the market has run too far, that the Fed has been slow to act, that complacency has created pockets of excess. Do these gut feelings mean a major equity correction looms? Not yet, in our view.


AI, Robotics, and the Future of Jobs

This is a good piece sent courtesy of John Mauldin. It goes well with this video which is a pretty scary perspective of what the robots could do to us all. Enjoy!


Deutsche Bank: Ignoring Food Price Pressures Could be a Mistake

Economists and central bankers tend to be less focused on what consumers pay at the grocery store because food and energy prices have historically been more volatile – remember, it’s just “noise”. However what they can’t ignore is how shoppers view inflation – i.e. inflation expectations. And food prices have a significant impact on households’ views on future inflation.


All-Time Highs in the Stock Market are Perfectly Normal

“If you think the market’s “too high” wait ’til you see it 20 years from now.” – Nick Murray


Housekeeping: Turning off the Comments

Bad news friendos – no more comments.


What Backs the Value of Money?

I was reading this very good piece by Matthew Klein at FT Alphaville when I came across this line: “The only kinds of money that reliably hold their value are the ones explicitly backed by a strong government*.” This is an interesting point and one I don’t completely agree with….

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Citi: Beware Rising HY Spreads

Worried about a potential recession and another big market decline?  Analysts at Citi say a good way to track this risk is to look at the HY bond spreads.  Specifically, spreads at 600-700 bps indicate a recession is highly probable: Another factor that seems to flag the transition into Phase…

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Flag of the People's Republic of China

Further Signs of China’s Slowing Property Markets

China’s official housing index now shows home price appreciation slowing faster than some had anticipated.


More Thoughts on the CAPE and Valulations

I’ve made my opinion on valuations and the use of CAPE pretty clear – these sorts of metrics don’t tell us much about the macro environment because the whole idea of ” value” is dynamic and evolving.  If I am right then trying to calculate a market “value” through these types…

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Don’t Be Passive About Rising Rates

Though they’ve defied expectations this year, higher interest rates appear to be all but inevitable. Investors need to take measure of the rate sensitivity in their portfolios—and stay agile—to negotiate the rough market crosscurrents a rate reversal may bring.