October 2018

U-G-L-Y

Today was one of those days where we’re reminded what it feels like to lose money. We know this is what we signed up for, but it doesn’t make dealing with them any easier when they happen. All of the red dots in the plot below felt like it was the end of the party….

Animal Spirits: A Committee of Geniuses

On this week’s Animal Spirits, we discuss: Social media and financial reporting  How interest rates affect everything Hedge funds are closing… …like in 2000 A committee of geniuses Parents are spending money on their adult children Bernanke 1, internet 0 Short-termism is nonsense Amazon is raising wages The relentless bid Listen here: Charts mentioned Tweets…

A Bullish Washout?

Investors are nervous, which is a permanent feature of the markets, with a few exceptions. But today, after nine years of consecutive stock market gains, it’s completely normal that people are looking for clues as to when this bull run is going to end. People who pay close attention look for divergences in the advance-decline…

Built to Break

“Radiation therapy or double bypass might give you another decade or two, but an incubator gives you an entire lifetime.” Steven Johnson wrote this in Where Good Ideas Come From. He was talking about how developing nations experience a much higher infant mortality rate than the United States. What’s responsible for the gap is not just that…

These Are the Goods

Articles It’s not without precedent that the stock market can go long stretches in the absence of an enormous market crash. By Ben Carlson Investors then received 40% of their investment in pepper, before finally receiving a 30% dividend in nutmeg. By Jamie Catherwood The big culprit on the year is systematic value investing. By…

The End is Nigh

Two tweets from SentimenTrader paint a scary picture of current stock market breadth. Yesterday, he wrote: “The Dow is on track to close at a new 52-week (and all-time) high. Yet, there are 3 times as many 52-week lows as 52-week highs on the NYSE. Since 1965, that has happened on exactly one* other day….

Animal Spirits: Buy the Housing Dip

On this week’s Animal Spirits, we discuss: Is Howard Marks hurting investors? Jack Bogle still has it This is the top SoftBank is…not a bank The best portfolio My take on the perfect portfolio Fraud of the week Buy the housing dip J.P. Morgan’s New Guide to Markets Listen Here Charts Mentioned Tweets Mentioned UBS…

Stock Market Peaks

In the new edition of J.P. Morgan’s Guide to the Markets (H/T @ROIChristie), they show this incredible chart about what the average S&P 500 returns were 3, 6, 12, and 24 months following a stock market peak (and subsequent bear market). Charts like this convey an important message; They show that if you believe in…