Saturday, July 29, 2017

Quote of the Day: Markets are Never Easy!

I absolutely know that folks are paying unusual attention to their portfolio balances these days. It feels good when stuff's going up! If you can relate, be careful with that. Studies show that individual investors who watch their stuff daily underform those who don't. I.e., market fluctuations tend to spark emotion, and emotion-inspired investment decisions can be killers.

Thursday, July 27, 2017

Stat of the Day: Still Like Europe's Stocks

Bloomberg's graph and commentary below (citing the 6x more inflows to European equity funds vs the U.S. this year, and the yet lowest relative valuation in 5 years) speaks to why -- as we've discussed/illustrated herein (here's a recent example) -- we continue to favor European equities:

This Week's Message: A Few Tidbits From Our Diary

Our job here at PWA is a fascinating one. World markets are an ever-changing menagerie of the decisions humans make. Over time, patterns develop -- inspiring strategies aimed at exploiting them -- only in so many instances to see those patterns disintegrate and make fools out of "strategists" bold (and foolish) enough to brandish their opinions to the financial media.

Tuesday, July 25, 2017

Quote of the Day: Policymakers getting in the way of an indicator...

I was recently asked about the disconnect between the economic signaling of the bond market and that of the stock market. That is, interest rates remaining so low (bond prices so high) suggests that the bond market is signaling anything but robust economic growth going forward -- while stocks at record highs may be interpreted as a signal of blue skies to come. The questioner added that in his view "those bond guys are smart" and wondered if perhaps they have it right when all is said and done.

Saturday, July 22, 2017

Stat of the Day: How Trump's start stacks up...

It's a popular notion in some circles that this year's positive stock market start has a lot to do with our new president. Well, we gotta be careful with that, for, as I pointed out in a recent post, if Trump had taken office in January 2008 he'd be unfairly catching the blame for the worst bear market/recession since the Great Depression.

Friday, July 21, 2017

This Week's Message: One area that warrants caution...

Here's an unlabeled 64-year graph that I'd like you to take a look at:   
click any insert to enlarge

Wednesday, July 19, 2017

This Week's Video: A Quick Technical Indicator Update

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Tuesday, July 18, 2017

Quote of the Day

Edwin LeFevre, in his timeless 1923 classic Reminiscences of a Stock Operator (the reputed story of Jesse Livermore, and perhaps the greatest book on trading of all time), spoke facetiously to why we so consistently question herein the motives of the tipsters and prognosticators the financial media trots out to steal your attention (if not your money):

Sunday, July 16, 2017

Charts of the Day: Small businesses are getting a little impatient with Washington...

While the factors that underpin the continuing bullish setup for stocks can be debated, the one area where I have found last year's election to have been unambiguously positive is the NFIB's monthly small business survey (aka Small Business Optimism Index).

Quote of the Day

The siren song of populism can be very hard to resist (btw, I'm not entirely unsympathetic to the independence the folks in Great Britain were after). When, however, and alas, it wins what it plays for, it can be costly for the populace:

Friday, July 14, 2017

This Week's Message: On the ground, things look good...

Fed Chair Janet Yellen gave her 2-day semiannual report to Congress this week and offered up what you might say was a moderately optimistic view of the economy going forward. Like us, the Fed tracks an array of published economic data to gauge its view of general conditions.

The Fed's overall assessment is what guides its monetary policy moves. Our overall assessment influences (technical data plays prominently into our view as well) the sector and regional weightings within our portfolios' equity exposures, and -- along with our technical market assessment -- guides our approach to the fixed income allocation.

Wednesday, July 12, 2017

Quote of the Day: Stealing the benefits of a steel glut...

Driving by Clovis Community Hospital yesterday evening I noticed a large construction project on the south-end of the complex. The setting sun reflected brilliantly off of the building-to-be's dense steel skeleton. I suddenly found myself pondering the current threat of what I consider to be the most destructive government act of cronyism imaginable -- the tariffing of foreign imports.

Monday, July 10, 2017

Chart of the Day: China Risk

To the dismay of those who've been betting big that China's gotten too far out over its skis, its economy remains unwilling to buckle under the weight of a rapidly expanding credit system.

Friday, July 7, 2017

Charts of the Day: Who Buys U.S. Exports?

As we all know (right?), political narratives (influenced dictated by political incentives) often stray far from reality.

Amazingly, two countries that combined account for less than 4% of the world's economy (ex the US) buy an astounding 1/3rd of U.S. exported goods!

Thursday, July 6, 2017

This Week's Message: Trade Data Says Global Economy Growing -- which has to have (some) short-term traders wary...

Thursday morning we added two charts (U.S. and Australian trade data) to our current trends file. Both speak positively about the current state of the global economy.

While we believe the U.S. trade deficit receives far too much, and ill-conceived, attention, we do look into the data to help gauge our view of the global economy. We agree with Bloomberg's note below that American export growth speaks positively:   click charts to enlarge...

Wednesday, July 5, 2017

This Week's Video: The U.S./Foreign Equity Setup Vs A Year Ago

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Sunday, July 2, 2017

Quote of the Day: Know the risk before you go chasing the return!

Highly respected money manager Colm O'shea, in his interview for the Market Wizards series, explains why he bought beaten down Berkshire Hathaway amid the late '90s dotcom mania:   (emphasis mine)