More on Related Themes
2014-01-23 A Problem with the Numbers - Unemployment and the Fed\'s Timetable by Anthony Wile of J.P. Morgan Funds
Given a potentially inaccurate assessment of labor force participation, the Federal Reserve may be missing the mark on their current economic projections, which increases the potential for policy error going forward. Assuming the natural rate of unemployment is at the low end of Fed projections, the Fed can lower forward guidance thresholds without spurring an acceleration in inflation.
2013-07-02 Insider’s Forum Conference Names Advisor Perspectives Exclusive Media Partner by Advisor Perspectives (Article)
The Insider’s Forum conference, to be held this year in Dallas, TX, September 17-19, has announced an exclusive media partnership with Advisor Perspectives.
2012-11-16 The End of a Trend? by Mebane Faber of World Beta
Investment styles go through cycles of performance. I was chatting with a friend the other day about the relative underperformance of trendfollowing funds the past few years, and remarked that we'll know we are near a bottom when some CTAs start going out of business. I was bummed to see the news the other day that John Henry's funds are closing shop. (JWH was one of the pioneers in the field, although I don't think he has been that involved for quite some time.)
2012-11-06 Favorable Reports Post Sandy by Christian Thwaites of Sentinel Investments
The devastation of Sandy blighted the week. We were lucky in that most of our employees escaped the worst effects. We had some evacuations and plenty of lost power. But the images of devastation were overwhelming and we hope our clients and friends of the firm are safe. Perhaps, as a non-native, my perspective is warped but in the US we have an uncanny ability for industry, problem-solving, drive, inventiveness and optimism. Sometimes the very best of us comes out in these times.
2012-10-25 The Supreme Court Hangs in the Balance by Gary Halbert of Halbert Wealth Management
The airwaves are overflowing with intense discussions about President Obama's and Governor Romney's positions on a variety of issues. What we don't hear much talk about is the likelihood that our next president will get to appoint at least a couple of justices to the Supreme Court. Depending on the outcome of the election, the balance in the High Court could shift significantly. With that in mind, let's focus today on what's at stake for the highest Court in the land, and therefore all of us.
2012-10-18 Does Party Matter to the Markets? by Doug Ramsey of Leuthold Weeden Capital Management
We've argued lately the S&P 500 could soon eclipse its 2000 and 2007 highs (of 1527 and 1565, respectively), but there's another looming target few are discussing: S&P 1443. Why is 1443 significant? Because a close above this figure at next January's inauguration would make Barack Obama's presidential term the second most profitable for stock investors since 1928, trailing only the +162% rebound off Great Depression lows in FDR's first term.
2012-10-02 A Daily Reading Plan That Attracts New Clients by Dan Richards (Article)
Digesting news and sharing it with clients is part of every advisor's daily routine. Doing that efficiently, however, in such a way as to better position yourself with your clients, requires a structured approach that is far from obvious.
2012-07-31 Expect Headwinds for Stocks If Hoisington is Right about Bonds by Keith C. Goddard, CFA (Article)
Might today's historically low interest rates in the U.S. persist for years to come? The latest Quarterly Review and Outlook from Hoisington Investment Management forces readers to consider that possibility, refuting the reversion-to-the-mean mindset that causes many people to expect higher interest rates in the not-too-distant future. If the Hoisington model for the economy turns out to be right, the implications for the stock market are unfavorable.
2012-07-24 Optimal Strategies for Secular Market Cycles by Michael Kitces (Article)
With alternative investments and active management strategies growing ever more popular, an advisor recently told me, 'It's just a fad and will end with heartache as all investment fads do. I've watched it play out over and over during my 30-year career.' But I am not persuaded. The secular market cycle today is different from the bear market 30 years ago, and not all market cycles favor the same investment strategies.
2012-07-02 Nightmare on Wall Street: This Secular Bear Has Only Just Begun by Ed Easterling of Crestmont Research
Secular bull markets are great parties. Investors arrive from secular bears really wanting to take the edge off. As the bull proceeds, above-average returns become intoxicating. By the time it is over, the past decade or two has delivered bountiful returns. In contrast, secular bears seem like hangovers. They are awakenings that strip away the intoxication, leaving a sobering need for an understanding of what has happened.
2012-06-30 Bull's Eye Investing (Almost) Ten Years Later by John Mauldin of Millennium Wave Advisors
The current valuation of the stock market is relatively high, but it is not overvalued, considering today's conditions. Low inflation-rate conditions should be accompanied by relatively high P/Es. But if deflation or high inflation (or both) are likely upcoming, the market is very expensive. On the other hand, if the inflation rate happens to remain near price stability, then this secular bear could remain active a while longer but how likely is that?
2012-05-04 Stocks Cheap? Not so Fast! by Mike Paciotti of Integrated Capital management
Markets seem to have forgotten that which ailed us just 4 months ago. Talk of another Lehman style meltdown by a major financial institution has given way to positive earnings results, record profit margins and a much publicized recovery in the US. Equities, have now taken center stage once again with many major asset management firms proclaiming their attractive nature. Over the course of the next few paragraphs, we will examine this argument in greater detail by deconstructing equity market returns into component pieces.
2012-02-09 Innovation Suggests Vibrant Future for Tech Sector Innovation Innovation by Walter Price of Allianz Global Investors
We are relatively positive on technology in 2012 for a variety of reasons. In mid-2011, large-cap tech companies valuations began to stabilizemany at record lows. A number of tech companies have also built stable businesses since the early-2000 tech decline, and more have started paying dividends. Moreover, tech companies generally do well in slow-growth periods because they offer cost savings, and particularly innovative companies can get very good traction in this environment. Indeed, Facebook's IPO is likely to usher in a new era of online advertising.
2011-09-20 Europe!? by David Kelly of J.P. Morgan Funds
Investors might wonder why global markets care so much about European debt. After all, relative to the size of their economies, both the U.S. and Japan run bigger annual budget deficits and have accumulated more government debt than the Euro Zone as a whole. The answer lies in the fact that Europe is now too integrated to be immune to the problems in any one nation, but still too divided to do anything effective to deal with them. Because of this, a very serious budget problem in one nation can undermine confidence in government debt and the banking system across the entire continent.
2011-08-09 S&P Downgrade and Municipal Market Insights by Tom Dalpiaz of Advisors Asset Management
Here is some perspective from Municipal Separately Managed Accounts (SMA) Land about the S&P downgrade and the municipal bond market: Moodys and Fitch have retained their AAA ratings on U.S. Government debt. This action by S&P was not entirely a surprise and was foreshadowed to a large degree. The rating agencies had negative trends on U.S. Government debt for a few months and S&P, in a mid-July report, laid out in three scenarios the actions they might take depending on how the debt ceiling increase was handled by Congress.
2011-08-03 Converging On The Horizon by Ed Easterling of Crestmont Research of Advisor Perspectives (dshort.com)
By the end of this year, the earnings cycle is likely to be well above its typical thresholds of duration and magnitude. Although earnings could again rise in 2012, the magnitude of excess margins portends a fairly significant decline when the earnings cycle reverts. In addition, the profile of cyclical cycles in the stock market may have also run its course. The market may sustain or extend its gains for 2011 by year-end, but another up-year in 2012 would make history. Not only is duration stretched, but also the magnitude of cumulative gains has now matched the historical average.
2011-08-02 Crestmont Market Valuation Update by Doug Short of Advisor Perspectives (dshort.com)
The recent article P/E: Future On The Horizon by Advisor Perspectives contributor Ed Easterling provided an overview of Ed's method for determining where the market is headed. His analysis is quite compelling. Accordingly I have added the Crestmont data to my monthly market valuation updates. The first chart is the Crestmont equivalent of the Cyclical P/E10 ratio chart I've been sharing on a monthly basis for the past few years.
2011-07-01 Crestmont Market Valuation Update by Doug Short of Doug Short
The recent article P/E: Future On The Horizon by Advisor Perspectives contributor Ed Easterling provided an overview of Eds method for determining where the market is headed. His analysis is quite compelling. Accordingly I have added the Crestmont data to my monthly market valuation updates. The first chart is the Crestmont equivalent of the Cyclical P/E10 ratio chart Ive been sharing on a monthly basis for the past few years. The Crestmont P/E of 19.3 is 41% above its average of 13.7. This valuation level is almost identical what we saw in my latest S&P Composite regression to trend update.
2011-06-07 Has the hour of the dividend stock arrived? by Team of Columbia Management
Surveying the present financial landscape-what are investors’ options? Bonds have been enjoying historic popularity. But they are at market highs and come with return and income potential inherently capped by their coupons. Turning to Treasuries, the price-to-yield is particularly unattractive. Then there’s the specter of interest rate risk. The steep rebound of equities off the crisis bottom ended with the arrival of 2010, and double-digit returns for many formerly cheap stocks went with it. Following a period of volatility, we appear to have settled into the slow-growth stage.
2011-06-01 Crestmont Market Valuation Update by Doug Short of Doug Short
The recent series of articles by guest contributor Ed Easterling triggered a great deal of interest in the Crestmont P/E ratio. Accordingly I have added the Crestmont data to my monthly market valuation posts. The first chart is the Crestmont equivalent of the Cyclical P/E10 ratio chart I've been updating monthly for the past few years. The Crestmont P/E of 20.2 is 47% above its average of 13.7. This valuation level is almost identical what we saw in my latest S&P Composite regression to trend update and somewhat higher than the 40% above mean for the Cyclical P/E10.
2011-05-17 What 'Secular Cycle' Means by Ed Easterling of Doug Short
There is a skeptical gremlin perched on the left shoulder for many investors. He often sneers at notions of "cycles" and other presumably predictable periods. When the word "secular" accompanies the word "cycle," that gremlin becomes even more scornful. Why do we use the term "secular cycle" with the stock market and what does it mean? Figure 1 presents a view of the stock market over the past century. You will note periods of above-average returns (i.e., the green bar periods) and periods of below-average returns (i.e., the red bar periods).
2011-05-03 P/E: Future on the Horizon by Ed Easterling (Article)
Most people expect P/E to measure current valuation and to show historical patterns. But more features are available from some versions of P/E. The methodology behind the Crestmont P/E enables investors to anticipate the future. It may not precisely predict the market ten years away, but it frames within a relatively tight range the likely outcome. One component from determining the Crestmont P/E is a means to assess the future trend line for EPS using estimates of future economic growth (GDP).
2011-04-08 Financial markets don’t worry about government shutdowns — It’s when they come back we worry! by Colin Moore of Columbia Management
We examine the implications for the broad economy, financial markets and state and local budgets of a federal government shutdown. The probability of a “shutdown” this weekend is growing. There appears to have been little real progress in negotiations over the last few days. If anything, the debate about the current crisis has ballooned into an even greater battle about the size of and role of government. It is relatively easy to agree on a target $33 billion or $40 billion of expenditure cuts, it is MUCH more difficult to identify exactly which programs should be cut to meet that target.
2011-03-31 Small-/Mid-Cap Growth — Why Today’s Market Cycle is Different by Team of Columbia Management
We believe the outlook for small- and mid-cap growth stocks remains bright as we move into the later stages of the economic recovery. While the asset class is typically expected to underperform at this point of an economic rebound, there are three important distinctions that make this cycle different: 1) scarcity of growth, 2) continued M&A activity and 3) commodities inflation.
2011-03-22 Consensus: Groundhog Decade for Stocks by Ed Easterling (Article)
Just as Bill Murray woke up to the same thing day after day in the movie 'Groundhog Day,' it's likely that your outlook foretells a groundhog decade for the stock market that will repeat its near-breakeven returns from the past decade.
2011-03-10 Stock picking is dead? Long live stock picking by Robert McConnaughey of Columbia Management
A recent frontpage story in The Wall Street Journal was titled “Macro Forces in Market Confound Stock Pickers.” The article quoted a prominent Wall Street strategist as saying, “Stock picking is a dead art form.” The article is now prominently displayed on my office bulletin board as I believe it (and similar articles and research notes) marks a high in skepticism regarding active investing. I also believe these sentiments will be proven dramatically wrong in the months and years to come, as certain active investors take advantage of the inefficiencies that this very skepticism is causing.
2011-02-15 Local Municipal Credit Quality Dissected by Chad Farrington of Columbia Management
While we believe there will likely be more credit pressure and some defaults at the local level, including counties, cities, towns and school districts, we don’t believe there are systemic risks in the market that will cause widespread defaults. Most municipalities are making the tough choices to either raise taxes and fees and/or cut expenses to ensure debt service obligations are paid on time and in full. Moreover, ultimate recovery of full principal in the event of default is viewed as very likely.
2010-12-06 Research-driven Market Insights from Janus: 4Q Market Perspectives by Janus Investments (Article)
Offer clients research-driven market insights. Every quarter, Janus equity and fixed income teams share their insight and outlook on global market sectors and key macroeconomic indicators in Janus' Market Perspectives Series. We thank Janus Investments for their sponsorship.
2010-06-01 Municipal Bond Market Insights by Northern Trust Investments (Article)
Not surprisingly, the most profitable investment trends tend to be those with the most staying power. That could be particularly good news for investors in municipal bonds, since structural forces are in place that may make tax-free bonds - and the income they generate - even more valuable in the years to come. Northern Trust provides their secular outlook for municipals, and we thank them for their sponsorship.
2010-05-11 A Coming Wave of M&A? by Seth P. Hieken, CFA (Article)
In this guest contribution, Seth Hieken of The Colony Group says to expect M&A transactions to accelerate over the course of the year. If correct, there are several important guidelines investors may wish to follow.
2010-05-04 Timely market insights: Sector reviews and quarterly perspective on the financial markets by Janus (Article)
Janus provides sector reviews and reports on quarterly market performance in a new commentary. While economic recovery is in place, the firm says, its magnitude is uncertain. Topics covered include winners and losers in the energy sector, Chinese growth from within, the evolution of internet-related media and communications, and the financial impact of health reform. We thank Janus for their sponsorship.