I spent the New Year in Lake Tahoe, which is one of my favorite and most beautiful places in the world. Heading up to the lake with family and friends for a few days (and leaving my laptop at home) really helps clear my head and let's me focus on the environment we're currently living in. I see again and again people trying to compare today's market to "the average" of a dozen or so bear markets in the past. It's painful to watch.
It's hard to remember a time where I saw this much irresponsibility among investors, especially the pros who should know better. These "asset managers" are so busy dealing with investors, compliance, operations, marketing, regulations and whatever else they're busy doing, that they've completely underestimated the amount of risk in the stock market. It's like they forgot that risk is a real thing.
And what are they doing to justify their actions, or lack thereof? They're relying on a tiny sample size of prior market declines to "wait and see" what happens. They think they're "Portfolio Managers", but they should be "Risk Managers". There's a huge difference.
The media has been making quite the ruckus about 2018 and the "historic" volatility that the US Stock Market experienced, particularly in the fourth quarter. In this post I want to look at a few simple stats that help to put this past year's performance into its proper historical context, so that we can see whether or not it truly was a crazy year for stocks.
As we wrap up 2018, it's time to forget everything that happened this quarter and this year and start from scratch. It’s irrelevant. We’re moving forward with fresh eyes. This is our Q1 2019 Playbook.
Part 1 of our Q1 2019 Playbook discusses big-picture themes, while this part focuses on the individual stock setups with the best reward/risk scenarios heading into the new year.
It's been a great couple of months for Bond bulls. As unprepared investors worry about their portfolios and financial media outlets irresponsibly call this market "crazy", we've been happy to watch the destruction of stocks and new flow of money into safer, fixed income assets. Interest rates have gotten slammed with stocks and bonds ripped. One for the good guys!
So the question now becomes, how low can rates go?
This is one of my favorite things to do: Forget everything that happened this quarter and this year and start from scratch. It doesn't matter what we did or how we felt in 2018. It's irrelevant. We're moving forward. This is my Q1 2019 Playbook.
From a public markets perspective the Marijuana Industry is small, so small that it could go to zero tomorrow and nobody would notice. In late August we started covering the space after receiving a lot of reader requests, so as we close out 2018 I wanted to share one chart that perfectly summarizes the boom and bust it's witnessed over the last two quarters.
In this post I want to share two charts from the weekend update of our Market Internals workbook, both of which confirm the continued deterioration in breadth as US Stocks make new lows.
Yesterday after the bell we sent out our Year End '18 ETF Risk Update to our Institutional Clients, covering 100+ of the most actionable and informative charts. To put this report together we examined over 500 inter-market and cross-asset relationships across weekly & daily time-frames to identify trend direction, momentum, risk-management levels, and prices targets.
In this premium post I want to highlight a few charts from each of our five sections: Factors, International, Domestic, Fixed-Income, and Thematic/Niche. If you like what you see and want the full report, you can fill out our Institutional Client Application or contact our Head of Institutional Sales, Jonathan Bloom, for access.
Having Trading Psychologist Dr. Brett Steenbarger on the podcast was a huge treat for me. He works with the best traders on planet earth on a daily basis. Needless to say, when Dr. Brett is telling me something, I want to listen. In this episode, he let me ask him all the questions I was curious about and he happily answered them all with solid advice and relevant anecdotes. We make a lot of mistakes as investors because of our many flaws as humans. When our stress levels are elevated we start acting emotionally, instead of rationally. Taking losses is a difficult task for us, even though we all know that losses are part of the deal. I really enjoyed this conversation and it could have gone on forever if I didn't end it. I hope you get as much value from this chat as I did.
