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Is Outside Technical Commentary Still Relevant?

Please do not circulate.

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Knowledge Base

Howard Marks on Risk, Revisited

What risk really means.

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The Purpose(lessness) of Forecasts and Commentary

Since I actually read every last piece of outside research before posting it up for you, I asked myself, is there a reason to read publications when the writer is obviously treading water? Am I better off reading a few research papers instead?

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Treasury Inflation-Protected Securities (TIPS) in Core 4 and 5

A member wrote to say that his “employer has restricted which funds can be purchased, and has limited rebalancing to once per quarter… although I can go to cash at any time.” As a result, TIPs is no longer an option for him inside his Fidelity retirement account. What should he do?

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Portfolio construction, aircraft location based on sufficient understanding

My trading tools and portfolio calculator have carried all of us through the good times and the bad times, and now, based on the performance characteristics since 2007, it’s time to incorporate what we’ve observed and learned over the past seven years and update the code. Here’s why.

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Rosenberg and Weinberg on Inflation

To continue on the “it’s so down, it must soon go up” theme, here are David Rosenberg and Weinberg on inflation.

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Inflation expectations, and expectations of those expectations

Since quantitative easing has never taken place before, the data from the past does not account for what turns out to be a new tool for the Fed: the potential sales of $3 trillion of assets which will in theory allow them to target the entire rate curve as well as the discount rate.

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Is 8 percent annual return over the last 3 years any good?

When clients ask “What’s the performance?” they never consider RISK. The proper way to think about it is Return/Risk, like Miles/Gallon. Or else you will end up broke like everyone else.

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Stein's Law: Pollution limits China economic growth

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Behind every great offense there is a defense

In many ways, stocks and bonds can be thought of as offensive and defensive positions in an investment portfolio. Since 2009, stocks grew to commanded a premium while sentiment toward bonds were probably the worst I’ve ever witnessed in my career.

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The Numbers of Risk

I don’t expect the average investor to do the math for themselves, but there are three key facts that you must know.

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Investor sentiment comes full circle since 2009

Where do we stand now in terms of the investor sentiment cycle?

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Larry Summers on Secular Stagnation

Most interpreted his comments to mean we need more bubbles, but clearly, that is not what he said. Summers saw fit to expand on his comments to help clear things up for those having trouble grasping his English the first time around.

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Enter The Dragon-Kings

Intuition and observation tells us that Dragon-kings are more prevalent than Black Swans, and this research is helping us develop the next generation of market barometers here at WealthCop.com.

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The Last Word on Low Risk, High Return

There is no need to rewrite any textbooks. When prices rise, they don’t fluctuate much compared to when prices decline, thanks to their human traders puking and heaving all the way down.

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Q&A: More discipline, less stress

Think of it this way: very, very, very few people ever reach a comfortable financial independence. We have to do things differently than the rest–because their losses are our gains.

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What Moves Stock Prices?

“On a day to day basis, however, only a small minority of largest moves are associated with what appears to be unexpected fundamental information regarding the economy. The mystery is only deepened by the offsetting nature of many of the largest moves.”

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Volatility is Much Higher in the Short Term

This is the single biggest advantage of investing, rather than trading.

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The little guys will always outperform the professionals

Bradford Cornell writes, “In fact, if individual investors accept their limitations and act wisely, they will always outperform active professional investors on average! Furthermore, this surprising conclusion does not depend on complex economic arguments involving market efficiency or rationality: it is a direct result of basic arithmetic.”

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The Basic Speed Law for Stock Market Returns

“The ultimate return of stock prices to levels more consistent with economic growth is nothing more than another example of mean reversion at work.”