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Eric Parnell, CFA

 
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  • Where Has The QE Rally Gone? [View article]
    Hello Christopher,

    Thanks for your comment. Following up on McGonicle's comment below, this information is available on the Federal Reserve Bank of New York's website. During the first week after Open Ended QE was announced on Sept. 13, the Fed made net purchases of $17.5 billion in MBS. I've included a link to this page below for reference, as it will be useful to monitor going forward.

    http://bit.ly/OW67mr

    Thanks again
    Sep 26 09:42 PM | 1 Like Like |Link to Comment
  • Where Has The QE Rally Gone? [View article]
    Thanks Joe. I appreciate it!
    Sep 26 09:38 PM | 3 Likes Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello untrusting investor,

    Thanks for your comment and for sharing this link and information. Sorry for the delay in my reply. I'm looking forward to reading the post from the Energy Bulletin and had the same reaction about the $23 trillion figure. Enormity is absolutely right.

    Thanks again.
    Sep 24 10:12 PM | 2 Likes Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello NotThisTime,

    Thanks for your comment and you raise an excellent point. In my response to thucydides123 above I hit on some of these thoughts.

    You raise a great point and I completely agree with the risks associated with the point that you've made here.

    Thanks again.
    Sep 18 12:20 AM | 1 Like Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello thucydides123,

    Thanks as always for your comment and insights. I always enjoy reading your thoughts. You raise an excellent point here in that the key variable this time around is the fact that QE is now open ended. To your point, it will be far more difficult for the market to predict exactly when they will step away, which will potentially change the complexion of the market response. It is for this reason that I favor owning hard assets/commodities like gold, silver, copper (BHP), oil (OXY) and agriculture (POT) in the event we see the parabolic/crash scenario you've suggested. I think your positioning in the miners also makes a great deal of sense.

    Excellent points as always. Thanks again.
    Sep 18 12:18 AM | 1 Like Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello Richard93,

    Thanks for your comment. I think you raise an interesting point here. I agree that government stimulus should absolutely be focused on infrastructure projects that have a high multiplier effect over transfer payments. My primary concern with the Fed taking this approach through monetary policy, however, is that it has what is a group that is supposed to be independent and focused on the broad dual mandate of price stability and full employment through managing the money supply and interest rates and politicizes it by having it play a role in choosing exactly where funds are allocated. This would put the Fed on a slippery slope, which they may already be to an extent by focusing on the mortgage market with their latest QE3 program, particularly given that their decision making goes largely unchecked.

    With this being said, you raise a great point. Unfortunately, we are left to wait for our fiscal policy makers to facilitate this happening.

    Thanks again.
    Sep 18 12:14 AM | 2 Likes Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello KAB Trading,

    Thanks for your comment and for raising some excellent questions here. My answer here is probably going to be unsatisfactory, but I could formulate a variety of outcomes based on the potential answers to your questions here. But these are questions that I am actively looking into for potential articles as we draw closer to the election. As a result, I hope to check back with more on these topics in the coming weeks.

    Thanks for raising these questions. They are excellent.
    Sep 18 12:01 AM | 1 Like Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello AllStreets,

    Yours is excellent and comprehensive analysis as usual. You provide a lot of great information and points here that are worth consideration. Thanks for sharing your insights and perspectives here.

    Thanks again.
    Sep 17 11:57 PM | 3 Likes Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello m.beater,

    Thanks for your comment. This is a good question. My answer here is more qualitatively based, but I believe any QE3 rally will be shorter than what we saw with QE2. The underlying risks are far greater at this point than in late 2010/early 2011, and the marginal impact of additional stimulus at this point is increasingly diminished, particularly given that the stock market is meaningfully higher from where it was a few years ago despite little fundamental to support the move along the way. I would not be surprised to see the market begin to level following a rally lasting 1-2 months, but much will depend on how other events play out along the way.

    Hopefully this answers your questions. Thanks again.
    Sep 17 11:55 PM | 2 Likes Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello Manuel Blay,

    Thanks for your reply. I genuinely appreciate it.

    Thanks again.
    Sep 17 11:52 PM | 1 Like Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello Capt. Spaulding,

    Thanks for your reply. You hit on a key theme here in your response that seems to be so utterly lacking in investment markets today, which is the idea of bearing personal responsibility. Investors at some point must be forced to recognize the full meaning of taking on risk. Sometimes people and organizations fail, and allowing such failures to play out in an orderly way and the system to cleanse itself is what forms the basis for new secular bull markets. In the meantime, many are left to endure the ongoing waiting for the inevitable corrections to finally play themselves out.

    Excellent points as always. Thanks again.
    Sep 17 11:51 PM | 3 Likes Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello untrusting investor,

    Thanks for your detailed reply. I genuinely appreciate your sharing the details of your overall portfolio and current strategy. This is excellent information and what you've outlined here is very interesting and makes a great deal of sense.

    Thanks as always for your outstanding insights.
    Sep 17 11:47 PM | 2 Likes Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello pollyserial,

    This is a good question. I would not be surprised to see the market grind sideways for the next week or two following the QE3 announcement. After a +14% run since early June, a bit of consolidation and sell on the news is a distinct possibility. With that being said, with so many hedge funds underperforming the S&P for the year as we head into the fourth quarter, a healthy stock market ramp up on performance chasing would also not be a surprise. It will be interesting to see.

    Thanks again.
    Sep 17 01:08 AM | 1 Like Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello Manuel Blay,

    Thank you for your comment and for making the excellent point about investing with prudence here. I agree with you completely that the risk reward profile in the current market leaves quite a bit to be desired. As a result, long positions should be undertaken with care and managed carefully to protect against downside risk.

    Thanks also for sharing the link to the Dow Theory Investment blog. This is interesting and worthwhile reading.
    Sep 17 01:06 AM | 1 Like Like |Link to Comment
  • Exactly How Much Can We Expect From Stocks On QE3? [View article]
    Hello Capt. Spaulding,

    Thanks as always for your excellent and insightful commentary. By the way, I very much enjoyed reading your recent articles on SA and look forward to your future posts.

    You present a number of excellent questions here that have kept me up at night for the last several years, which I think of as realization risk. Precisely at what point will investment markets wake up from the delusion that underlying economic and market fundamentals remain in dire condition so many years after the outbreak of the financial crisis. What I find particularly troubling is that in many respects some problem areas of the global economy have become markedly worse over the last several years during a time when many segments of the capital markets drift higher in the opposite direction. At some point the realization will set in, and the longer markets are induced to float higher on monetary morphine, the more painful the final corrective process will be. I often wonder how much better off we would be today if global policy makers including the Fed had stepped away in the summer of 2010 and allowed the corrective process to get underway in an orderly fashion. Unfortunately, we'll never know. Instead, we're two years on and circumstances are more distorted now than ever.

    It will be interesting to see how it all plays out, but I believe we will see a day of reckoning finally forced on global markets sometime in the next 18 months. In the meantime, we are all left to wait and see.

    Excellent thought provoking questions as always. Thanks again.
    Sep 17 01:03 AM | 3 Likes Like |Link to Comment
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