Every now and then I scan various Exchange Traded Fund (ETF) options to find out what is working to determine if new trends are emerging. During this scanning process I recently came across a very interesting industry that looked quite promising to me. It has been wise for investment professionals to ignore this industry over…
Just two days ago the 4th quarter GDP came out as a negative number, which was much worse than expected. In fact, not one of 83 analysts had anticipated a negative number, meaning they were all too bullish on the 4th quarter growth number. But yesterday the Chicago Purchasing manager’s index, a growth barometer, was…
In my last column, I described a bearish scenario where the markets come to the realization that the monetary authorities are out of bullets. This was simply an exercise in critical thinking and doesn’t actually line up with our current forecast, and I did promise I would come back with a bullish scenario.
Most Pinnacle Advisory Group clients are familiar with our view of secular (or very long-term) market cycles. My partner, Michael Kitces, and I first published a paper on secular bear markets in the Journal of Financial Planning in 2006, where we predicted correctly that stock prices were likely to deliver much less than average returns…
One of my favorite scenes in the Pixar movie Finding Nemo comes at the end. The fish had managed to outwit the Dentist (who was holding them captive in a tank) by dirtying the water enough to force a water change. In order to do that, the Dentist had to bag the fish and leave…
Few people bothered to see Trouble with the Curve, a recent baseball movie starring Clint Eastwood and Amy Adams, and most critics didn’t like it. I did see the movie, and without giving away the plot, it is fair to say that the film is a cry against quantitative analysis in sports. Eastwood plays an…
The Federal Reserve spoke yesterday, and not surprisingly decided to buy more treasury bonds to keep expanding the balance sheet. It might have been a bit surprising that they have now also explicitly targeted an improvement in the unemployment rate (6.5%) and stated a tolerable inflation band (2.5%) for investors to use as guides for…
When I look at nonfarm payrolls, I try to disregard the headline figure and look at the year-over-year percent change in unadjusted total payrolls. This allows me to remove any seasonal effects from the series without making any of the hard assumptions required by “fancier” seasonal adjustment methodologies. The November report that came out Friday…
It is commonplace in the business news community to talk about ‘Golden Crosses’ and ‘Death Crosses’. If you’re unfamiliar with these terms, they refer to moving averages (MA) crossing each other. More specifically they describe the movement of a security’s short term MA moving above the long term MA (Golden Cross) and the short term…
Everybody knows that the dice are loaded. Everybody rolls with their fingers crossed. Everybody knows that the war is over. Everybody knows the good guys lost. Everybody knows the fight was fixed. The poor stay poor, the rich get rich. That’s how it goes, Everybody knows. Leonard Cohen, “Everybody Knows”
