Saturday, October 15, 2022

Economic Update (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.


  1. Thanks Marty! Always appreciate that you are taking the time on the weekend to create and post this great video! Have a great weekend!

  2. Good Afternoon Marty,
    I understand that it is hard to predict the market, but in your opinion, when do you think the market will bottom? Beside the VIX, dollars, and bond yield, what other good indicators are out there?

    1. Hi Sam, "hard to predict", as you know, is putting it mildly... In terms of indicators that would signal a bottom, that's a super-tough one as well... I'm currently wrapping up my weekend analysis, I'll go ahead and count how many indicators I update every week (aside from tracking the past week and ytd results for literally 77 different sectors, countries and commodities)...

      As for the "indicators", the ones we formalize on a spreadsheet which covers a number of currencies, long-term technical, correlation, and breadth indicators for several indices, futures traders positioning in 31 different equity and fixed income indices, currencies and commodities, as well as scoring our macro, financial stress and sentiment indexes (we have an equity market conditions index, and a global macro dashboard [that one provided by another research firm] we do just once a month as well), total 51 (per the above, there are literally hundreds of data points captured in those 51 indicators)...

      Yes, that's overkill, but, frankly, as complicated, dynamic and multi-faceted today's economic and market backdrops are, we'd feel remiss if we didn't attack it all with such breadth... At the end of the day, we do all of this to formulate an ever-evolving thesis around current conditions and the overall macro risk/reward setup...

      Now, if you pressed me and said, what one exercise gives me probably the best insight into timing and determining a market bottom, it would have to be the technical analyses... along the lines of what I share on the market snapshot videos... But, frankly, that by itself isn't enough.

      My favorite quote (think of the wind as the price action [the technicals] and the tide as the fundamentals):

      "People get all excited about the price movements, but they completely misunderstand that there is a bigger picture in which those price movements happen. Price movements only have meaning in the context of the fundamental landscape. To use a sailing analogy, the wind matters, but the tide matters, too. If you don’t know what the tide is, and you plan everything just based on the wind, you are going to end up crashing into the rocks."

    2. Forgot to address the "when"... Based on our present view (very subject to change as data rolls in), odds favor sometime between here and the end of Q1... But, again, that could easily change between here and there...

    3. Thank You! Impressive study from PWA! Overall, 2021 has been tough. My little girl's 529 has lost 22% year to date. I had the account for her for almost 3 years since she was 2. I would say this year is pretty bad so far. Nothing is safe including the 529. LOL.
      I look forward to the clear buy signal from October 2022 to March 2023. My buddy from Bakersfield texted me and said: "A few years from now, you'll be wishing you had these buying opportunities". LOL.

    4. For sure regarding (if not especially) your little girl's 529... Those plans are generally pre-packaged and age-based, so the younger the child the more equity-exposed the account will be... "Bad" is of course is a relative term... You might argue that something substantial to the down side (and this bear market isn't even average bad (yet?)) was more than due, and ultimately very healthy for anybody with a timeframe that goes out more than a couple years... And, yep, without question (historically-speaking) bear markets present serious buying opportunities... It's all about time horizon and risk tolerance.