Monthly Archives: February 2016

Is America A Safe Haven?

Will they never learn? The gurus and pundits are, once again, peddling the end of America – proclaiming that the U.S. dollar is a paper tiger, and the American economy is crumbling beneath our feet. The best way to address this wrong-headed thinking is to confront it with the facts – brutally delivered by the…

Speculators Continue To Press

There are two broad developments in speculative positioning in the Commitment of Traders report in the week ending February 9.  First, the market turbulence saw speculators reduce exposure.  Of the 16 gross positions we track, 11 were reducing positions by liquidating longs or covering shorts. Second, there were an unusual amount of significant gross position…

Price Target Update: Proofpoint

For most of the past 15-20 years, the market has been flush with cash, and many stocks have traded at astronomical heights without real businesses to support them. In this exuberant market, fundamentals mattered little while momentum and technical rule the day. However, as excess liquidity dries up and global economic concerns weigh on the…

UK Trade Gap In New Record

The deficit is the difference between what a nation earns in taxes on goods, services, incomes and corporate profits and what the country spends (defence, health care, education etc.). A nation may not run a deficit, so the deficit is added to the “stock” of a country’s national debt, increasing the interest that it must…

Silver Linings Playbook

Last July, I wrote the following: “Collectively, these factors [negative earnings/sales growth, widening credit spreads, flattening yield curve, weakness in cyclicals, etc.] point to an equity market that is increasingly fragile and in the past one that was about to become much more volatile. The response from market participants today: “no one cares.” Volatility is low, stocks…

E

With the Sensex down near 24% from its peak, its worth looking at what the numbers have to say. Markets tend to peak when valuations are expensive, and animal spirits high. They tend to bottom when valuations are cheap, and animal spirits low. However, markets tend to become cheap only when recession risk is perceived…