Tom McClellan – McClellan Market Report There are two market warning signs which have just recently been triggered and which have gotten a lot of press attention due to their catchy names.  The Titanic Syndrome was created in 1965 by the late Bill Ohama. It gives a “preliminary sell signal” anytime that the number of 52-week New Lows (NL) exceeds [...]

EMH is a hypothesis. MPT is what practitioners in the investment management industry use to implement the theories behind EMH. AMH is a hypothesis as much as EMH is and tools allowing investors to adopt this new paradigm must be further developed. The process has already begun, though.

We live in a time where every little market moves needs to be explained by something.  I guess it’s the Twitter effect and the short attention spans we all have now.  I don’t know.  So lots of people seem to be freaking out about the recent rise in t-bond yields and why it might be occurring.  The Economist magazine has [...]

Here’s a great chart from JP Morgan research showing Tokyo Stock Exchange Margin trading versus the TOPIX Index (see below). One subject I’ve discussed in detail recently is the concept of disaggregation of credit.  That is the idea that credit can be used for both productive and purely speculative (often unproductive) uses.  It is my contention that our increasingly asset [...]

I am going to wade into the dark waters of MMT once again here, but only because this is a very important point.  I was discussing some things about the post-keynesian school online with Noah Smith and others and he pointed out that he conflated MMT for being the same thing as the post-keynesian school. Anyhow, I’ll keep this short [...]

We’re finally starting to see the small investor chase equity returns.  And they’re just in time for it all after a 150% rally.  According to the most recent AAII investor allocation survey individual investors allocated their portfolios towards the highest equity weighting since September 2007.  Meanwhile, bond allocations are close to the post-crisis lows and well off the 2009 highs [...]

I’m inside of a metal tube flying through the air at 500 MPH and I am reading one of those terrible in-flight magazines. But it has a “what if” section in the back and I just love cheesy crap like that.

Putting aside the actual substantive argument (my views, including why I advocate some active management, are here and here), advisors routinely tell me that if they used index funds, their clients wouldn’t need their services, consistent with the Dilbert cartoon below. I disagree vehemently. Here’s my top ten list of reasons why.

If there’s one cognitive bias you have to be particularly aware of in the markets, it’s recency bias.  Recency bias is the tendency to believe that what has just recently occurred is likely to form part of a larger future trend.   It’s dangerous, you should become extremely familiar with it, learn from it and ensure that you don’t fall [...]

Jan Hatzius of Goldman Sachs explains why he doesn’t see a disorderly unwind in the US Treasury bond market. Here are some of the key points he mentions: Goldman sees a 3% 10 year yield by 2015.   The economy should continue to expand into 2014. The fiscal drag from the government will soften in the coming quarters. The Fed [...]