9 Feb 2016

Why This Isn’t Another 2008

In December of 2008, I went to a new client meeting and made a call: ‘I don’t think we are in a second Great Depression.’ With the benefit of hindsight, that doesn’t seem like much of a prediction, because we know after the fact that gross domestic product (GDP) only fell -4.3 percent during the 2008 global financial crisis, which is small compared to the estimated -15.0 percent decline in… Read More

27 Jan 2016

Drawdowns Part Deux

Yesterday’s insight on drawdowns was quite popular and enough people asked for the same thing, so I thought I would do an immediate update.  (Click here for the original post.) The first request was for the full history of the S&P 500 since yesterday’s chart only went back 25 years.  I picked 25 years somewhat randomly, but mostly because the other chart that went with it was difficult to read going… Read More

26 Jan 2016

Drawdowns Help Visualize Losses

Until I read the book ‘Hedge Hogging’ by Barton Biggs before the 2008 financial crisis, I had never heard the term ‘drawdown,’ which refers to the peak-to-trough decline of an investment or market. A drawdown measures the depth and length of a decline and illustrates how long it takes to earn back money lost from the last peak. It’s a commonly used term in the hedge fund community, partly because… Read More

22 Jan 2016

Stock Losses Take a Breather

Yesterday at lunch, when stocks were down more than three percent, I was reading market analysis and one analyst said that investors were disappointed by the ‘lack of policy response.’ That really struck me because markets were off sharply and it hadn’t occurred to me that the Federal Reserve hadn’t said anything material this year that might shore up stocks. Although we are steeped in losses very early in the… Read More

21 Jan 2016

Stocks Post Amazing Late Day Rally

It’s going to be a short Daily Insights today because I went to an event last night featuring nationally known financial analyst James Grant of Grant’s Interest Rate Observer and Chris Varvares of St. Louis based Macro Economic Advisors. Mostly, I just have a snapshot of the intraday trading for the Dow Jones Industrial Average (DJIA).  Although the S&P 500 is still my favorite measure for how stocks fared, I… Read More

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14 Jan 2016

Insight: More Bears are Growling

The widely followed Dow Jones Industrial Average (DJIA) fell -365 points, bringing it perilously close to correction territory, which is generally defined as a decline of -10 percent from the recent peak. The S&P 500 is already in correction territory having not fully recovered from the steep losses last August.  The rally in October offset most of the losses, but a new peak was not reached since last May. While… Read More

12 Jan 2016

Earnings Season is Upon Us

The headlines have been filled with major macroeconomic news from China and elsewhere that have pushed stock prices lower. It’s perfectly legitimate to factor this news into stock prices because our collective fortunes are tied together whether we like it or not.  If Chinese gross domestic product falls substantially, you can be sure that ours will drop as well along with growth prospects for US companies. Last night, earnings season… Read More

4 Jan 2016

Stocks End Year with a Whimper

For me, reading the Wall Street Journal is a bit like eating, drinking and sleeping – I can’t really go without any of these things for very long.  I think that their reporting is fair and accurate and definitely of interest to me. So, I was a bit annoyed when the Friday headlines read ‘US stocks Post Worst Annual Losses Since 2008.’ Now that headline is accurate – last year… Read More

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29 Dec 2015

Market Forecasts Part 2

Yesterday I posted some of the questions and answers from the Barron’s annual ‘Test Your Wall Street Skills’ quiz. Here’s a link to my article from yesterday and here is the link to the article in Barron’s (a subscription may be required). Most of the ‘big’ questions have already been answered, but there are still some fun ones: 1. Which ‘FANG’ stocks will fare worst in 2016 – Facebook, Amazon,… Read More

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28 Dec 2015

Market Forecasts Part 1

Over the weekend, Barron’s put out their annual quiz for readers to predict market related events in the coming year (you can find the quiz here, but a subscription may be required). I thought it would be fun to share some of my answers – but keep in mind the quote from Warren Buffet, who said that ‘the only value of stock forecasters is to make fortune-tellers look good.’ I… Read More

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