Posts filed under “Markets”

A Bear Market for Mom & Pop Investors

Last year, we noted that there was a “Bubble in Bubble Calling.” News media bubble chatter was the rage, whether it was tech initial public offerings or stocks or bonds — all caused by “a global central bank QE bubble.”

Here we are two quarters later, with the central bank reducing quantitative easing by scaling backs it asset purchases. Markets have reached new highs, which is a highly bullish sign. The jobs lost in the great recession have been recovered, and economic data continues to trend positive.

Despite this, we still hear bubble chatter. Yet when we look at what individuals are doing with their investments, their behavior is definitely bearish. According to a study published in the Financial Analysts Journal, equity ownership has fallen to the lowest level in more than a half-century. In 2012, investors held a mere 37.7 percent of their portfolios in equities. That was out of a grand total of $90.6 trillion in investable assets around the world.

Over the past three decades, investors’ portfolio equity exposure has run at a historical average of about 60 percent. Think of this as the classic 60/40 stock-bond allocation.  continues here

Category: Investing, Markets, Psychology, Sentiment

World’s Cheapest Stock Markets

click for ginormous version Source: The Telegraph   Nice graphic from The Telegraph, showing relative valuations around the world, using P/E ratios, CAPE, and Price to Book. To be named “cheap”, markets had to be trading below their own historic valuation across all three measures. As the map to the left shows, only a handful…Read More

Category: Investing, Markets, Valuation

Kiron Sarkar’s Weekly report

The ECB’s reduction of both its main refi rate and deposit rate was anticipated, though some had expected a larger cut than the 10bps announced in respect of both rates. Importantly, Mr Draghi stated that the reduced rates were now at the lower rate bound ie no further rate cuts should be expected. In addition,…Read More

Category: Markets, Think Tank

Succinct Summation of Week’s Events 6.6.14

Succinct Summation of Week’s Events: Positives: 1) ECB backs up Mario Draghi’s words with action and European and US markets celebrate (Asian markets mixed). Forgotten though is that the ECB balance sheet has shrunk by 1T euros over the past two years of which 500b euros of LTRO money has been paid back over the…Read More

Category: Markets

Forward Markets: June Macro Strategy Review

Category: Markets

How Much Do S&P500 P/E Ratios Vary Historically?

Source: Bespoke Investment Group   How expensive are stocks? Its a question that seems to beget many different answers. Too often, the response reflects the responder’s investment posture. If they are long equities, they typically respond by saying “Not very.” If they are short, or in cash or in other risk assets, the answer is…Read More

Category: Index/ETFs, Investing, Markets, Valuation

Is This the End of the Secular Gold Bull?

In the beginning of this year, we looked at some of the trading errors commonly made by gold investors during this cycle. At the time, gold had fallen 38 percent from its 2011 peak. Yesterday, spot gold traded at less than $1,242 before closing slightly higher. Gold is hitting new multiyear lows relative to the…Read More

Category: Cycles, Gold & Precious Metals, Markets, Technical Analysis

Kiron Sarkar’s Weekly Report (5.31.14)

Whilst US Q1 GDP was revised sharply lower to an annualised rate of -1.0%, down from the initial reading of +0.1%, Q2 GDP should rebound strongly to around +3.5%. The inventory contraction in Q1 should reverse in Q2 and the better weather will also help. Furthermore, growth in consumption was revised higher to 3.2%, from…Read More

Category: Markets, Think Tank

Monetary Rules: Theory and Practice

Monetary Rules: Theory and Practice Frameworks for Central Banking in the Next Century Policy Conference Hoover Institution Stanford, CA May 30, 2014 Charles I. Plosser President and Chief Executive Officer Federal Reserve Bank of Philadelphia Highlights President Charles Plosser discusses his views on the benefits of a systematic and rule-like approach to monetary policy. President…Read More

Category: Bailouts, Federal Reserve, Markets

Succinct Summations of Weeks Events for 5.30.14

Succinct Summations week ending May 30th Positives: 1. The S&P 500 made new all-time highs. 2. Case-Shilller 20-city index grew 1.2% in March, higher than expected. 3. Initial jobless claims came in back below 300k, down from 327k last week. 4. Durable goods grew 0.8% vs expectations for a 0.8% decline. 5. Chicago PMI came…Read More

Category: Markets