Halfway through the Correction

Last month, we discussed how we might be on the verge of a correction. We also noted the futility of trying to time the start and finish of such events. What actually matters is how you react — or overreact.

As my colleague Josh Brown has observed, “since the end of World War II (1945), there have been 27 corrections of 10 percent or more, versus only 12 full-blown bear markets (20 percent or worse).”

However, the data show that the distribution of corrections isn’t smooth. Indeed, almost half (45 percent) of the corrections occurred either in the 1970s or the 2000s. Both eras were part of longer-term secular bear markets, characterized by strong rallies, vicious sell-offs and earnings contractions.

It is noteworthy that almost half of the corrections occurred in two out of seven decades. I suspect this fact isn’t a coincidence. From a 30,000 foot view, it may be a key to understanding how likely a more severe correction might be.

Continues here



Category: Markets

Economics Gurus Get Schooled at Camp Kotok

Every summer, financial luminaries like Paul McCulley of PIMCO spend four days at Camp Kotok, an annual summer retreat in a remote part of Maine.

Category: Video

Quant’s e-Sportlimousine: Electric Revolution

~~~ ~~~ Video From Classic Driver: So how does it work? Quite complicatedly, as it turns out. Essentially, each wheel has its own electric motor, drawing power from a central ‘Nanoflowcell’, a new chemical battery system capable of storing and releasing electrical energy at extremely high densities. Allegedly, the technology is a ‘beacon of hope’…Read More

Category: Technology, Weekend

Category: Data Analysis, Employment, Think Tank

10 Thursday PM Reads

My afternoon train reads • Investing by the Pool (Crossing Wall Street) • This market expert sees big upside for stocks (Marketwatch) but see Top Ten Signs Of The Coming Stock Market Crash (Forbes) • How to Capture Alpha through Beta (ai-cio.com) • The 1% May Be Richer Than You Think, Research Shows (Bloomberg) • Federal Reserve…Read More

Category: Financial Press

Structural Secular Markets

Source: Raymond James Research

Category: Markets

10 Thursday AM Reads

My morning train reads (continues here): • Incredible Shrinking Yields (Bespoke) • Ten Charts That Show Us Something New About The IPO Boom (Moneybeat) • Investors Turn Bearish; Is this a Buy Signal? (Barron’s) see also Stop Worrying About the Next Market Crash (JDavidstein) • Summertime Living Isn’t Easy for Macro Funds (WSJ) continues here  …Read More

Category: Financial Press

Why The Ukraine Headline Does Not Pass The Sherlock Holmes Test

I mentioned on Tuesday afternoon that I did not believe the market weakness was due to Ukraine Russia tensions. From Art Cashin, UBS head of floor trading, and a 5o-year veteran of the NYSE floor, expresses the sentiment much more eloquently than I:   One Of These Things Is Not Like The Other – Or…Read More

Category: Markets, Really, really bad calls

BNN: One-on-one (with me)

Frances Horodelski interviews Barry Ritholtz, Chairman and CIO of Ritholtz Wealth Management & founder, the Big Picture blog.


click for video
asessing risk
Source: BNN

Category: Media, Video

Category: Think Tank