1Q, 2020 Asset Class Return Quilts
Gold, Taxable Bonds, and Cash finished the quarter on top and were the only asset class to post positive gains. U.S. Large Cap Stocks fell 20.2% in Q1, 2020.
March 2020 Cartoon: The Storm
March 2020 Cartoon: The Storm
COTW: The Fed’s Response to the Covid-19 Crisis
In response to the COVID 19 crisis, the U.S. Federal Reserve has restarted several emergency programs first implemented during the Global Financial Crisis.
COTW: Venture Capital Washout
According to data from Bloomberg, Venture Capital activity is down 22% since the start of the year. However, that activity had already slowed dramatically prior to the COVID-19 crisis intensifying as the index reached an all time high in June of 2019 and is now d own 52%
COTW: Oil Price War in the Midst of a Demand Shock
Saudi Arabia announced plans to cut its oil prices over the weekend sending oil futures down 20% to a four-year low. The announcement came after talks between OPEC and Russia failed…
COTW: Travel to Hong Kong Has Come to a Halt
As official estimates of the number of new coronavirus cases each day slows, hopeful eyes are watching for improvement in the news coming out of Mainland China as well as those countries most impacted by restrictions on travel and trade related to the virus…
COTW: How Your Starting Point Impacts Forward Returns
Fidelity’s recent audit of its 30 million retirement accounts revealed that nearly 40% of its clients were over-allocated to equities relative to what would be recommended by most advisors for their current phase of life.
December 2019 Cartoon: Monster Market
December 2019 Cartoon: Monster Market
COTW: Entire Energy Sector is Now Worth Less than Apple
Poor returns and rock-bottom sentiment in the energy sector was summed up well by a Piper Jaffrey report published last month.
COTW: The Life of a Thanksgiving Turkey: A Lesson in Investment Risk
As the year winds down, we find ourselves reflecting on the unusually low volatility we see across financial markets and what that may be telling us about the outlook for the year ahead.
COTW: QE or not QE?
After announcing the U.S. Federal Reserve would again start buying up large quantities of Treasury securities, Fed chair Jerome Powell clarified what was really happening during the post-announcement Q&A session: “This is not QE. In no sense is this QE.”
September 2019 Cartoon: The Gloves Are Off
September 2019 Cartoon: The Gloves Are Off
COTW: Headed for a Global Earnings Recession?
Are we headed for a global earnings recession? Overlaying the year-over-year percentage change in Singapore Electronics Exports with earnings per share growth for the MSCI World Index, a widely used proxy for world stocks, suggests we may very well be. Exports of electronic goods from Singapore dropped 25.9% in August, largely as a result of Trade War related issues.
COTW: Closing the Barn Door on Emerging Market stocks
Global growth first began to slow roughly 18 months ago and emerging market stocks have dropped 13% from the interim high for global stocks in late January 2018…
June 2019 Cartoon: Promising The Moon
June 2019 Cartoon: Promising The Moon
COTW: U.S. Stock Returns After the Fed Cuts Rates
The Fed meets this week and is expected to at least telegraph rate cuts at either its July or September meetings, or both…
COTW: Convergence of Active and Passive U.S. Equity Funds
Morningstar recently published their April Fund Flows report. Per the report: “at the end of April passive U.S. equity fund assets essentially reached parity with active U.S. equity funds at $4.3 trillion each”. Contrast that with the balance back in 1998 when there were 6.5 times as many assets in actively managed U.S. stock funds as in index funds.
March 2019 Cartoon: Extra Innings
March 2019 Cartoon: Extra Innings
COTW: Equity Returns from Cycle Lows in Unemployment
The U.S. unemployment rate (U3) increased to 4% in January after hitting an almost 50-year low of 3.7% in September 2018 and again in November 2018. The unemployment rate has now increased for two straight months.
COTW: Gold! What is it Good For?
Gold is one of the most polarizing investments we know of, which is one of the reasons we started giving it a serious look at the end of 2017.
COTW: The Best Year for Cash in at Least Two Decades
After nearly nine years of short-term interest rates held near zero, the normalization of monetary policy that began in late 2015 and continued in earnest in 2018, finally caught up with capital markets and exposed how competitive the risk/reward tradeoff of cash – that safe, boring proxy for patience – had become.
December 2018 Cartoon: Ghosts of Feds Past
December 2018 Cartoon: The Ghosts of Feds Past
COTW: The Powell Put
The “Fed put” is a term that describes the view held by many market participants that the Fed is generally willing and able to adjust monetary policy in a way that is bullish for stocks.
COTW: Cumulative Monetary Tightening Per Cycle
Tighter monetary policy has been a contributing factor – and arguably the contributing factor – to the end of every sustained economic expansion in the last half century.
COTW: Stock Market Seasonality: As Helpful as Weather Forecasts
Seasonality is commonly referred to as “a characteristic of a time series in which the data experiences regular and predictable changes that recur every calendar year”.
COTW: Central Banks No Longer Supporting Markets
We have long contended that asset purchases by central banks contributed – directly or indirectly – to gains in global stock markets (represented here by the MSCI All Country World Index).
September 2018 Cartoon: The Sugar High Express
September 2018 Cartoon: The Sugar High Express
June 2018 Cartoon: Painted Into A Corner
June 2018 Cartoon: Painted Into A Corner
Market Note: What Happened to Bitcoin?
Bitcoin and other digital assets remain polarizing among investors, garnering many diverse viewpoints of what the technology can or cannot become.
March 2018 Cartoon: Who’s Driving?
March 2018 Cartoon: Who’s Driving?
COTW: No Revenue, No Problem
There is no hard-and-fast rule, but “story stocks” are generally defined as those trading at prices substantially out of line with current fundamentals (revenue, earnings, cash flow, etc.) as a result of a positive story that suggests larger profits down the road.
WindRock Roundtable: What’s Next in 2018?
In December we participated in a roundtable discussion with Rick Rule, John Mauldin and Chris Casey that was hosted by Brett Rentmeester of WindRock Wealth Management. With WindRock’s permission we are sharing the conversation in its entirety. The topics covered included the dollar, emerging markets, Treasury supply, North Korea and cryptocurrencies. We think many of the comments are as relevant today as they were several weeks ago.
Market Note: Bubbles, Bonds, and Diversification
On February 5th, two bubbles burst. The first was the tulip bubble, and the second was the bubble in complacency (low volatility).
Market Note: 396 Days and Counting
The last time we had a drawdown in the S&P 500 of 3% or more was 305 trading days ago.
Market Note: Doyle Brunson and the Orange Swan
High stock valuations and low bond yields have dealt investors a risky hand – a 10-2 offsuit in poker parlance – but not necessarily a losing one…
