The New Guy on the Block

A few weeks ago the members of Pinnacle’s Executive Team decided to do their part in lowering the U.S. unemployment rate with a new hire, and they chose me. Needless to say, I feel very fortunate having the opportunity to join this amazing team. My journey with Pinnacle began in the spring of 2010, when…

4th Quarter Market Review

Although this space is normally reserved for fairly brief comments on the financial markets, we also write more in depth articles on a monthly and quarterly basis that get posted to our main website. So, for those who haven’t seen those pieces before, we thought it would be a good idea to direct them to…

A Sick Sense of Humor

For more than a decade I have run the investment operations at Pinnacle. As the Chief Investment Officer of the firm I’ve been responsible for, among other things, crafting the firm’s overall investment strategy and process, communicating our process to our clients through written materials, the web site, speaking engagements, publishing books, etc., and integrating…

Was That It?

We’ve been anticipating a correction in the stock market for a couple of weeks, mostly due to signs that the market is overbought and investors have become too bullish in the short-term. Over the past two days, it seemed like maybe a correction was materializing, as the S&P 500 dropped by -1.1%, and the Russell…

Which Indicator is Wrong?

At Pinnacle, we look at multiple indicators that we consider good leading indicators of global growth. Some of them are packaged indices that have multiple economic components, and some of them are market based barometers. Currently there is an interesting and eye-popping divergence developing between two market based barometers.

Hi-Low, Silver!

The price of silver has broken below its 50-day moving average today. From August 23, 2010 until now, the price of SLV (a silver ETF) has gone from $17.61 to $27.61, which is a 57% gain. That annualizes out to roughly 215%. That’s an amazing ride in 5 months. But now that the 50-day MA…

What’s Consensus?

One of the things we are always trying to assess is what the current “consensus” market opinions are. Contrarian investors typically look to steer away from the herd, since the market presumably has discounted most of the news by the time the most investors have gravitated to a particular idea. This is especially important at…

Relative Strength

Relative Strength is the study of the price movement of a security relative to the price movement of another security. In more simplistic terms, it is a line graph that shows which security is outperforming. If the line is rising, the numerator is outperforming. If the line is falling, the denominator is outperforming. Analysts frequently…

Risk-Adjusted Returns

Here is a trick question for you. Would you rather earn a 10% return with 10 units of volatility (don’t worry about how to measure the volatility units, I’m trying to make a point here), or would you rather earn an 8% return with 4 units of volatility? Clearly the second choice is the more…

What is a Fair Multiple?

According to Yardeni Research, the 3rd quarter of 2010 saw corporate America reach near record profit margins of 8.6%. One obvious way of growing corporate profits is to grow profit margins, but to plan on outsized margin growth from today’s record levels seems a little too optimistic. In fact, profit margins are mean reverting so…