A Trading Veteran's Market Perspective

A Trading Veteran's Market Perspective

We finally got the "required" breaks in Amazon (AMZN) and Netflix (NFLX), not to mention the Tesla (TSLA) fantasy. Also of note are Disney (DIS) and General Electric (GE) - key members of the equity cult. The big buy back announcement from GE, that got the idiots all fired up, fizzled (back below the pre-announcement level) and the straight up, mindless pursuit of "momentum" in DIS, got the "attention" of the robots when it broke - not a healthy sign when one of the key components of "The Dow" gets slapped hard (this gets the attention of all the soccer moms and bartenders who recently "discovered" the stock market.)

The hype surrounding the 200-day moving average (MA) is another ominous signal. The 200-day MA is a time tested support when in a bull market. There will be anywhere from two to as many as four or five VERY QUICK tests of that support. However, what all these "newbies" don't understand, is the fact that each "test" drains more and more firepower behind the bull move. 

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Stanley Druckenmiller at The Lost Tree Club

Stanley Druckenmiller at The Lost Tree Club

I thought I would start by spending a moment just reflecting on why I believe my track record was what it was, and maybe you can draw something from that. But the first thing I'd say very clearly, I'm no genius. I was not in the top 10% of my high school class. My SAT's were so mediocre I went to Bowdoin because it was the only good school that didn't require SAT's, and it turned out to be a very fortunate event for me.

But I'd list a number of reasons why I think I had the record I did because maybe you can draw on it in some of your own investing or also maybe in picking a money manager. Number one, I had an incredible passion, and still do, for the business. The thought that every event in the world affects some security price somewhere I just found incredibly intellectually challenging to find out what the next puzzle was and what was going to move what. And the fact that I could bet on that interaction, those who know me, I do like to bet. One of the great things of this business, I get to gamble for a living and channel it through the markets instead of illegal activity. That was just short of nirvana for me that I could constantly be making these bets, watch the market moving, and get my grades in the newspaper every day.

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2015 IAPF Investment Conference: Brian Delaney Presenting

2015 IAPF Investment Conference: Brian Delaney Presenting

I spoke at the Irish Association of Pension Funds (IAPF) annual investment conference at the Print Works, Dublin Castle on 26th March 2015 on the topic of Currency Management. Here is my presentation...

When interest rates hit 0% and central bank money printing has stretched stock market valuations, the effectiveness of monetary policy becomes limited and only enforceable through the currency. The chart on the lower left shows plunging 10-year government bond yields while the chart on the right shows the prospective 10-year total return for the S&P 500 based on a range of historically reliable valuation methodologies. We also see overlaid on the chart the actual subsequent 10-year total return for the S&P 500 (dark green line). The chart suggests that the total return for S&P 500 for the next 10 years will be approximately 0% per annum, down from approximately 8% per annum today.

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China's Rebalancing Effort: Will it Be Enough? - Henry McVey, KKR

China's Rebalancing Effort: Will it Be Enough? - Henry McVey, KKR

Henry McVey, Head of Global Macro and Asset Allocation at KKR, provides a fascinating insight into the structural shifts occurring in China across the economic, political and social spectra of the region. Please follow this link for a detailed analysis and review of the potential opportunities and inevitable challenges that face the discerning investor as KKR's McVey reports on some of the highlights of his recent visit to China.

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What's in a Bubble? - David Rosenberg, Gluskin Sheff

What's in a Bubble? - David Rosenberg, Gluskin Sheff

Of course, before you can address this file, you have to have a definition as to what is a bubble. Everyone has their own definition. Or as Alan Greenspan liked to say back in the day, you can only tell if something was in a bubble after the fact (nonsense). Well, we gave it a strict definition based on price only, and whether the asset class in question was at least one standard deviation away from its historical norm. Investor complacency is definitely in a bubble in terms of extreme low levels of volatility. Then again, this is a product of the Fed (and other central banks) applying massive doses of sedative to the marketplace. So the VIX which measures the price of downside protection in the stock market has a normalized value of -1.1 (values of standard deviation, above or below 1 is bubble like); and in the bond market, the comparable score for the MOVE index is -1.5. 

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Market Insights from a Seasoned Professional

Market Insights from a Seasoned Professional

"I noticed your reference to a couple of well-connected analysts (Stack and Goepfert) who have been correctly positioned for the market's up trend over the past year or more. The fact that they are starting to get "twitchy" with a few  warning signs of overall market weakness setting in, suggests their opinion deserves some attention. However, that is not to suggest a bear market lies just around the corner. Before that happens, some signs of increased selling pressure, beneath the "cover" of manipulated "strength" in the big cap indices (DJIA, SPX, etc.) should show up. Short term, there persists some "overbought" profiles that could accompany further dips before year end.

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Investing With The Trend

Investing With The Trend

As traders/investors, our main objective is to be objective. Logic and intelligence are often the biggest obstacles to success, and emotions provide no benefit in this game. In trading, if you are struggling then you have to go back to the fundamentals that made you successful. Let’s start from the beginning. What makes an asset bullish or bearish?

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