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Eric Parnell, CFA  

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  • The Naked Truth [View article]
    Thanks DH51 - I appreciate it and your very enjoyable comment too!
    Apr 23, 2015. 11:59 AM | 1 Like Like |Link to Comment
  • The Naked Truth [View article]
    Hello Michael,

    As always, you offer yet another very wise comment and perspective. While holding a mortgage as an inflation hedge as a small percentage of a larger asset/investment portfolio has its merits, I have suggest to many that they should consider looking into this very point over the several years for those where the mortgage makes up a meaningful portion of the liabilities on their personal balance sheet. For if one cannot safely generate a after tax 2% or 3% return without taking on meaningful risk, it can make just as much sense to eliminate a liability that costs 2% to 3% or more on an after tax basis. I am not a tax professional (disclaimer alert), however, so I leave any such official recommendations to the CPAs that do this work best!

    Thanks as always Michael. Hope you're doing well.
    Apr 23, 2015. 11:58 AM | 1 Like Like |Link to Comment
  • The Naked Truth [View article]
    Hello Mr. Bear,

    Thank you for your comment and your kind words on my article. I genuinely appreciate it! Thanks again.
    Apr 23, 2015. 11:53 AM | Likes Like |Link to Comment
  • The Naked Truth [View article]
    Hello peter lee,

    Thanks so much for your comment. I appreciate it. And your point about seniors is one that I particularly worry about, as so many have been forced into capital markets in order to secure yield and are now exposed to meaningful downside risks that they simply cannot tolerate given their inabilities to replace lost asset values. My hope is that when we do transition into the next bear market phase, whenever that may be, is that it is orderly.

    Thanks again!
    Apr 23, 2015. 11:52 AM | Likes Like |Link to Comment
  • The Naked Truth [View article]
    Hello convoluted,

    I really enjoyed reading your comment. This is a very important point that is often overlooked by even some of the most seasoned and experienced investors today. Even for those ageless investors that have been at it for 65 years and are currently in their 80s or 90s, their frame of reference for what is "normal" when it comes to investing has been defined by the last two full secular bull/bear cycles. There was the post WWII era from 1945 to 1968 that was arguably the best possible environment for US growth relative to the rest of the world that was rebuilding after the war. There was the stagflationary period of the late 1960s into the early 1980s which was relatively mild from a secular bear market perspective because it was more inflation driven (these secular bears have flipped back and forth between inflation-deflation-in... now deflation over the decades) followed by the longest economic expansion (Fed aided) in U.S. history from 1982 to 2000. As a result, those that have a first hand investment experience from the period from the late 1920s to the mid 1940s are mostly gone from this world now, and their perspective would be very insightful today. For example, my grandfather for whom my company is named cut his investment teeth during this period, and many of the points that you have raised here are points that he talked about in the last years before his passing in 2001 and the themes that we are now seeing repeat again today. It is amazing how history rhymes with itself over the decades and centuries.

    Thanks again for your great comment.
    Apr 23, 2015. 11:49 AM | Likes Like |Link to Comment
  • The Naked Truth [View article]
    Hello junji,

    Thanks for your comment and I appreciate your compliments. And you make a great point about the VIX, as it has fallen back to cycle lows after having been elevated dating back to mid September. It has fallen so low in fact that it is starting to become notable, as the 12 line has been strong support for the VIX dating back to the start of QE3 in January 2013 (outside of a brief stint last summer when it pushed as low as 10.28).

    Great points and thanks again!
    Apr 22, 2015. 08:46 PM | 1 Like Like |Link to Comment
  • The Naked Truth [View article]
    Hello mobyss,

    Thanks for your comment and I appreciate the point that you are making a great deal. This is a topic that actually causes me a great deal of concern for most investors, as bear markets have a long history of trapping investors in their jaws long before investors even realize that the bull market has ended. Before they know it, they are down -20% to -30% and eventually are forced to ride out the bear market to the end in the hopes that the subsequent rebound will help recover their lost value.

    To this point, the theme that I have allocated countless hours to over the last several years is how to identify the earliest signals that a bull market is drawing to a close and a bear market is about to get underway. This includes dissecting asset class performance to determine which categories are likely to roll over first and which are more likely to provide time to exit. These are themes that I have discussed in past articles and will likely continue to explore in detail in future articles.

    But with all of that being said, you are absolutely right that this is among the biggest risks facing investors today. And this is in part while I hold a meaningful allocation to cash and am diversified outside of stocks into other asset classes that are uncorrelated or negatively correlated to stocks. For as you mention, exiting even with close proximity to a market top is an extremely difficult task for even the most prepared investors.

    Excellent point and I appreciate your raising it here. Thanks again.
    Apr 22, 2015. 07:44 PM | 1 Like Like |Link to Comment
  • The Naked Truth [View article]
    Hello RNArizona,

    Thanks for your very kind comment. I appreciate it. And your point about central bankers and the hammer is a good one. A point that has frustrated me for years about policy makers is their hubris to think that they can defeat the business cycle. Recessions happen for a reason, as they allow an economy to cleanse and misallocated capital to be corrected. So the fact that policy makers have actively worked to skip over numerous recessions dating back to the mid 1980s through today has left us in a circumstance where capital is so badly misallocated that financial markets are now distorted beyond all recognition. It will be interesting to see how it all plays out from here.

    Thanks again.
    Apr 22, 2015. 07:27 PM | Likes Like |Link to Comment
  • The Naked Truth [View article]
    Hello kevn111,

    Thanks for your comment and for sharing your current strategy. Building on my reply to rz2013, I think we are seeing the market in a similar way by holding some dry powder.

    Thanks again.
    Apr 22, 2015. 07:24 PM | Likes Like |Link to Comment
  • The Naked Truth [View article]
    Hello rz2013,

    Thanks for your comment. I appreciate it!

    And you've raised a good point. If I have suggested that one should be fully invested right now, this was not my intent and I'm glad that you've mentioned it. I continue to hold a meaningful allocation to cash as a hedge against downside (short-term or otherwise) and to protect against the potential for loss while also having dry powder to purchase securities that present attractive buying opportunities along the way. As part of this strategy, I am not in a rush to reinvest if I have locked in gains on a position but instead will hold cash in waiting for the next good entry point elsewhere.

    Great point and thanks again!
    Apr 22, 2015. 07:23 PM | Likes Like |Link to Comment
  • The Naked Truth [View article]
    Hello giofls,

    Thanks for your comment and numerous great points. In regards to the point on REITs, I did not intend to suggest that VNQ was a selected basket of REITs but instead was referencing the ETFs as a representation of the larger basket from which these selected names might be drawn. But I can absolutely see how my wording was confusing on this point, so I appreciate you pointing this out.

    As for your points about the impact on markets, I do not think that we disagree, as I agree with the explanatory points that you have raised and you have done a superb job in detailing the flow through effects. My key point remains, however, that all of these effects have come as a result of government support including monetary stimulus, and all of these benefits have yet to feed through to the end goal of sustainable economic growth. But you are right in that they have and will likely continue to equate to strong stock markets for as long as these programs continue. Very much agree on these points.

    Thanks again for your excellent and thoughtful comment. I appreciate it.
    Apr 22, 2015. 07:20 PM | Likes Like |Link to Comment
  • The Naked Truth [View article]
    Hello fishfryer,

    Thanks for your comment. You've raised a point that I have been concerned about for some time, and the longer policy makers dig deeper and time passes without a truly effective solution to the problem, the more challenging the eventual way out may end up being. It will be interesting to see how it all plays out.

    Thanks again.
    Apr 22, 2015. 02:16 PM | 4 Likes Like |Link to Comment
  • The Naked Truth [View article]
    Thanks Oliver - I appreciate it!
    Apr 22, 2015. 02:10 PM | 2 Likes Like |Link to Comment
  • U.S. Stocks: Oh Behave! [View article]
    Thanks gdaym8 - I appreciate it!
    Mar 27, 2015. 05:22 PM | Likes Like |Link to Comment
  • Oil: Dallas Sellers Club [View article]
    Hello TimmiesRegular,

    Thanks as always for your comment. At present, I share your view on this timing for a bottom in oil prices sometime in Q2 or early Q3.

    Thanks again.
    Mar 19, 2015. 11:25 AM | Likes Like |Link to Comment
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