Stocks

6 Nov 2023

Have Bonds Become More Volatile Than Stocks?

Before the big rally last week, a client asked me whether bonds had become more volatile than stocks. Although he was partially kidding, his point was right on: bonds have been volatile this year, especially in recent weeks. And the rally last week still adds to volatility, it’s just easier to stomach when prices are rising. To illustrate the rise on bond volatility, I calculate the 20-day rolling volatility of… Read More

By David Ott Tags: Bonds, Markets, Stocks, Volatility, Wall Street

18 Sep 2023

America’s Credit Rating

Earlier this year, when Congress seemed to come together and avoid a debt ceiling crisis, I listened to a podcast that said we would right back to the same problem in the fall. I didn’t pay much attention because I was annoyed with the government and the fall was months away. Although I am loving the cooler weather, I’m annoyed again because the deadline to deal avoid a government shutdown… Read More

By David Ott Tags: Credit Rating, Credit Risk, Federal Reserve, Investing, Markets, Portfolio Strategy, Stocks, Wall Street

21 Aug 2023

What’s Happening in China?

One of the sources of optimism entering 2023 was that China was finally “reopening” after their long and agonizing Zero-Covid lockdown. Not only is the China-related optimism long gone, but markets are increasingly worried about the economic situation there. Although a lot of the news relates to a vastly overindebted property company whose bonds are trading for 35 cents on the dollar, the issues are much greater. First, growth is… Read More

By David Ott Tags: China, Economy, International Investing, Investing, Markets, Stocks, Volatility

14 Aug 2023

Thank You Short-Sellers

Growing up, my best friend’s father was a pilot for Ozark Airlines. He seemed like a pretty happy-go-lucky guy who loved flying and golfing when he wasn’t flying. His demeanor changed markedly when Carl Icahn’s backed TWA bought Ozark. I didn’t understand it much then, but I heard terms like ‘corporate raider’ and ‘asset stripping’ at the time. To my friend’s dad, Icahn was a true villain who borrowed money… Read More

By David Ott Tags: Investing, Markets, Short Selling, Stocks

7 Aug 2023

So You Say You Want Alpha: Cathy Woods has Some

Cathy Woods is a fascinating character. Her ARKK funds were the darlings of the pandemic, focused on innovation, and were on fire. Not surprisingly, investors poured money into the funds, just in time for them to collapse. The fact that investors piled in and out isn’t Woods fault. She bought a portfolio of stocks that she believed in and stuck to her style through the boom and the bust. Last… Read More

By David Ott Tags: Alpha, Beta, Investing, Markets, Portfolio Strategy, Stocks, Volatility, Wall Street

10 Jul 2023

Lessons from the Land of the Rising Sun

When I was in high school, Japan Inc. seemed invincible. Their economy was booming, which pushed up their real estate and stock markets, and a handful of over-the-top events like the purchase of Rockefeller Plaza by Japanese investors and the sale of Van Gogh’s Portrait of Doctor Cachet sold for $82.5 million (or $189.5 million in today’s dollars). From 1970-1989, the Japanese stock market, according to MSCI, gained 16.9 percent… Read More

By David Ott Tags: Diversification, Economy, International Investing, Markets, Recession, Stocks, Volatility, Wall Street

20 Jun 2023

The McNealy Problem

James Grant is one of my favorite market gadflies. He is the editor of the eponymous James Grant’s Interest Rate Observer, a columnist for Barron’s, and host of the Grant’s Current Yield podcast. Grant is intelligent, funny, and a long-term market skeptic. I’ve heard him say he doesn’t like being described as a perma-bear, but he’s been bearish for as long as I can remember and seems a true gold bug. So,… Read More

By David Ott Tags: Economy, Investing, Markets, Stocks, Volatility, Wall Street

12 Jun 2023

The Bond Market is of Mixed Minds about a Recession

One of the things that I hear all the time these days is that the bond market and the stock market aren’t in agreement about whether a recession is coming. Usually, I hear this from someone who thinks that the bond market is right and that the stock market will correct sharply when the recession comes. And in fact, bond investors are giving strong signals of a recession from the… Read More

By David Ott Tags: Economy, Federal Reserve, Interest Rates, Investing, Markets, Recession, Stocks, Wall Street

5 Jun 2023

The Market Has Bad Breadth

The S&P 500 is up 12.4 percent year-to-date as of Friday, which is excellent news. Less excellent, however, is that just a few stocks are powering the entire return. The half-dozen largest stocks in the index are worth about 25 percent of the index, and they are up 67.9 percent on average. They are all up by over one-third, and two have more than doubled. My back-of-the-envelope calculates that the… Read More

By David Ott Tags: Economy, Investing, Markets, Stocks, Wall Street

22 May 2023

Debt Ceiling Crisis in Perspective

Chris and Cliff forwarded me an article last week asking: what would you do with your portfolio if you knew what was coming? The article referenced the still unresolved debt-ceiling situation and proceeded to list many pretty lousy events over the past 30 or so years. It made me think of a chart we made when we started Acropolis with small images depicting awful news with the growth of a… Read More

By David Ott Tags: Bonds, Debt Ceiling, Diversification, Economy, International Investing, Investing, Markets, Stocks, Wall Street

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