Salient to Investors: Jim Simons at Math for America said: In the old days, commodities or currencies had a tendency to trend. Trend-following was great in the ’60s, sort of OK in the ’70s, but not OK in the ’80s. You look for anomalies in the data, when efficient market hypothesis
READ MORE... →Salient to Investors: David Stockman writes: US stocks are in a bear market. Honest financial markets would have sold off long ago, but for central bank falsification of asset prices. The S&P 500 is at 20 times trailing earnings as of June 2015: $97.32 per share versus $103.12 at the end of
READ MORE... →Salient to Investors: Miles Hoffman writes: Expect at least a 20% move down, and a seasonally bearish Fall. Bear markets have two phases, and can move down and up sharply. The first is where the leading sector of the prior bull market goes into a bear market, while other sectors
READ MORE... →Salient to Investors: The market drop this week looks more like a trivial downward bounce within a consistent range and a much-needed breather than a catastrophe in the making. Markets were priced for perfection in a world economy far from perfect. $100 invested in stocks still buys only $5.59 in earnings, versus
READ MORE... →Salient to Investors: James Hickman writes: Uninterrupted streaks in which the S&P 500 closes within 10% of its all time peak historically precede sudden declines: viz the tech bubble of the 1990s and the credit/housing bubble of the 2000s. The median decline from the peak is 43% and typically takes 13
READ MORE... →Salient to Investors: Laszlo Birinyi said: The market is now so dominated by institutional investors, hedge funds and service industries, that sentiment drives prices more than anything else, so predictions based on valuation data going back a hundred years are bound to fail. Recent developments in Amazon, Google, and Chipotle clearly show
READ MORE... →David Stockman writes: Amazon’s valuation, its one day gain and last week’s Google gain are reminiscent of the days before the tech wreck 15 years ago. The 12 Big Cap Techs of 2000 saw their peak combined valuation of $3.8 trillion plunge to $875 billion a decade later, even as their sales
READ MORE... →Salient to Investors: David Stockman writes: Google’s unwarranted market cap gain last Friday – 75% of the 9.6% gain in net income from the prior quarter was due to a lower tax rate and a cutback of ballooning G&A expenses – easily passed in one day the entire $50 billion market cap of Caterpillar, though only
READ MORE... →Salient to Investors: Nassim Taleb said: Over the last 2000 years, there is no no statistical evidence that violence has dropped, or that the frequency or magnitude of wars is declining. People are lulled into a false sense of security because of the nature of fat tail events, which can
READ MORE... →Salient to Investors: Jonathan Glionna at Barclays said: There is insufficient data not enough data – only 21 observations in the last 86 years – to expect a repeat of stocks’ habit of rallying after midterm elections – a median 7% in the 90 days following, with a range of
READ MORE... →