Salient to Investors:
Doug Short at Advisor Perspectives writes:
- Statistics says that 99.7% of all daily movements should fall within three standard deviations of the mean, but Deutsche Bank research shows that three standard deviation movements are not as rare – some instances, like the 2008 financial collapse, happen over 25% of the time. So bet on the unexpected happening much more frequently than everyone else. John Templeton said it is impossible to produce superior performance unless you do something different from the majority.
- We psychologically gravitate toward predictions that jive with our own personal convictions and seek out information congruent with our own beliefs.
- The rally in Japanese stocks will continue. Byron Wien at Blackstone expects the Nikkei 225 to rise above 12,000 as exports improve and investors return.
- Congress will pass a budget. Stocks will rise more than 15%.
- Deutsche Bank said stronger equities may be the necessary tonic to further increase household wealth: and the Fed can take more extreme actions in ‘unusual and exigent circumstances.’
- Morgan Stanley says inflation could be triggered by a combination of drought-limited agricultural production, stronger-than-expected recoveries from China and the US, and ballooning central bank balance sheets. Inflation hedges include gold, silver, timberland, real estate and, best of all, stocks.
- Deutsche Bank said Greece has sizeable undersea terrain in the Mediterranean, and several Mediterranean countries have already discovered undersea natural resources. The Global X FTSE Greece 20 is up 60% over the last 6 months so is a momentum play.
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