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Gary Gordon  

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  • Jobs Data Great For ETFs, Grisly For The Economy [View article]
    >>Part of the declining or flattened (some claim) trend in the
    >>participation rate is sort of "normal" -- due to change in the age
    >>structure of the population, as every one knows.
    >>Has anyone seen a recent estimate of what part cannot be so explained?

    Indeed, I have... and I wrote about it in the summertime. About 25% can realistically be attributable to aging of the population (legitimate retirees). The other 75% cannot be explained away as "normal."
    Oct 4, 2014. 05:01 PM | 1 Like Like |Link to Comment
  • What The Daily 1% Price Swings Mean For ETF Investors [View article]

    Thanks for your interest. We have a new Special Report in the works... you may wish to keep an eye out for it.

    On a separate note, I/we recently created an index with FTSE. The index will be an integral part of hedging against stock downtrends... a la when a levee breaks.

    This is a unique approach to reducing stock risk, and I intend to discuss it in greater detail in the weeks ahead. As my company, Pacific Park Financial, and FTSE, get closer to the release date, we will be able to talk more about it.


    Oct 1, 2014. 06:41 PM | Likes Like |Link to Comment
  • What The Daily 1% Price Swings Mean For ETF Investors [View article]
    The strategy is always the same. I have not changed a thing about my approach to the management of downside risk... 25 years and counting. Feel free to read more about how I approach downtrends at the link below.
    Oct 1, 2014. 11:35 AM | Likes Like |Link to Comment
  • Emerging Market ETFs Are Taking Back The World [View article]

    VWO/EEM can be pretty volatile as well. That said, they are terrific for broad-based exposure.

    At the same time, there's little reason to look at the second largest economy in the world (China,) and decide that it must be mixed with Russia and Brazil. People do not seem to have the same reservations about investing in Japan or Germany or Switzerland.

    BRIC exposure via VWO/EEM is certianly worthy. Still, some folks ought to embrace the ability to invest in pan-Asia excl Japan, as I have since the first quarter of 2014 with iShares MSCI Asia excl Japan (AAXJ). Others should be able to see if a direct stake in Chinese corporations is for them.

    Review Feburary's "China ETF Bashers Cannot See The Forest For The Trees" at this link:
    Sep 4, 2014. 02:48 PM | Likes Like |Link to Comment
  • Profit Margins And 'Fairly Valued' U.S. Stock ETFs [View article]
    You summed up the challenges succinctly!
    Aug 29, 2014. 10:57 AM | Likes Like |Link to Comment
  • Record-Setting Stock ETFs: It's About The Stimulus, Not The Economy [View article]

    Global economic weakness is supporting our dollar and giving a lift to U.S. Treasuries as well. This is a pattern that has occurred throughout history, where certain safer haven assets benefit from perceived troubles. These assets include - the dollar, the Swiss franc, the yen, gold, JGBs, German bunds and U.S. Treasuries. And, of course, Americans are buying these assets as well.

    Yet I disagree that money from troubled spots abroad seek additional risk in our equity markets. Our stocks may be relatively safer, but there is an extraordinary premium a la overvaluation. And historically, there is a high correlation between equities of all stripes. So it is highly unlikely that - should emerging markets, Europe, Japan and stocks around the world flounder - U.S. stocks would flourish on a "money has no place to go" argument. That is as flawed as "rates are so low, stocks are the only game worth playing."

    Aug 26, 2014. 01:47 PM | Likes Like |Link to Comment
  • Record-Setting Stock ETFs: It's About The Stimulus, Not The Economy [View article]
    W E. Coyote,

    >>Thanks for your consistently rational approach to trend following. As
    >>a reader for many years, I've found real investible and Alpha
    >>producing advice on your posts, whereas many here just parrot the
    >>common wisdom.

    I appreciate the kind words.

    And you are correct... I am neither a perma-bull nor a perma-bear. I look to participate in a wide variety of asset classes. As long as those asset classes present uptrends, I remain invested in them. In contrast, if a holding that I own for clients hits a pre-determined stop or a holding indicates a high probability of ushering in a downtrend, I lighten up.

    Regarding deflation, that remains a real threat for Europe. Indeed, when asked at the start of the year which global issue had the most potential to disrupt the markets in 2014, I answered, "Deflation." (See the link below.) Obviously, it is difficult to gauge how effectively the ECB will be in dealing with either deflation or recessionary pressure.



    Aug 26, 2014. 01:33 PM | Likes Like |Link to Comment
  • Questions For U.S. Stock ETF Bulls [View article]
    Corporations spent 20% less on share buybacks in Q2 than they spent on share buybacks in Q1... sorry about the confusion
    Aug 23, 2014. 02:43 PM | Likes Like |Link to Comment
  • Questions For U.S. Stock ETF Bulls [View article]

    In 2014, I have maintained an allocation to stock funds like VYM, USMV and AAXJ. Those are risk assets on the right side of the barbell. On the "risk-free" left side, I've used EDV and LTPZ for Treasuries and TIPS. Meanwhile, I've reduced exposure to anything in the middle.

    Here's a description of barbell investing:

    Aug 22, 2014. 08:20 PM | Likes Like |Link to Comment
  • Is The Depreciation Across The Commodity ETF Space Surprising? [View article]
    There is not much to respond to, Robert... I agree with most of your statements above. With 25 years in the biz, I have been seeing many of the same trends and talking about them throughout 2014.

    For example, you wrote about divergences. "Although the Nasdaq and SPX have rallied back, small cap stocks (NYSEARCA:IWM) continue to substantially lag."

    Agree. See many of my articles on divergences such as February's "3 ETF Indicators..."

    You wrote: "The curve continues to flatten."

    See my articles all year long on Treasury bond strength on the long end of the curve a la "Against The Herd..."

    You wrote: "Poor retail, banking and housing stock sector performance."

    See my articles throughout the year like this one on the three sectors.

    The only question, from my perspective, is how one should "be defensive." My approach throughout the year has been to shift towards a "barbell" approach. And, of course, I do not buy-n-hold an asset class when it establishes a downtrend and/or hits a predetermined stop.


    Aug 20, 2014. 04:29 PM | Likes Like |Link to Comment
  • Has Stock Bias Adversely Affected Your ETF Asset Allocation? [View article]

    You do realize that one of the big stories prior to last year's monster stock move was the fact that bonds had outperformed stocks over 30 years, right? Even with this year, it's probably pretty darn close. Now consider risk-adjusted returns, and which was the better 30-year holding?

    Granted, most 30-year rolling returns throughout history are going to favor stocks. Heck... possibly 98% of them. Yet we all take more risk with stocks, it is not an apples to apples comparison. Nor is inflation hitting bonds alone, it hits stocks as well. In fact, the S&P 500 has not recovered its inflation-adjusted high from 14 1/2 years ago (3/2000). With less risk, the inflation-adjusted bond return in the same time frame is quite meaningful to risk-averse retired folk.

    By no means should you get me wrong here. Every asset type -- real estate, REITs, collectibles, commodities, stocks, bonds, preferreds, MLPs, domestic or foreign -- has advantages as well as drawbacks. And if you've been reading me here since 2005, then you already know that I am not a buy-n-holder. When something breaks down, I lighten up. When an asset class is working, I stick with it.

    I am still long large cap U.S. stocks, but I have let go of most small cap stocks. I am long emerging market stocks as well. I have been long a variety of longer maturity income assets for clients throughout 2014. But once again, whether it is large U.S., small U.S., large foreign, small foreign, emergers, REITs, MLPs, convertibles, preferreds, or fixed income of different maturity lengths, when it is time to protect clients from changing dynamics, I modify the allocation.

    Aug 15, 2014. 05:49 PM | 1 Like Like |Link to Comment
  • These 5 ETF Charts Are Killing 'Risk-On' Exhilaration [View article]

    >>Japanese 10 year yields at 0.5 and Germany's at 1.03% tell me all
    >>I need to know about the long term direction of ours... They can fall
    >>for 35 and STAY there for 25 more.

    I tend to agree, and said as much at the start of this year. Review "Against the Herd: Lower Rates, Not Higher Rates In 2014."

    However, I am not a buy-n-holder. When long-maturity bond ETFs hit my stop limit orders as well as broke through respective trendlines in May-June of 2013, I raised cash. A bottom formed six months later in December of 2013, allowing my to acquire Vanguard Extended Duration (NYSEARCA:EDV) and PIMCO Zero Coupon 25+ (NYSEARCA:ZROZ).

    There are scores of interest rate sensitive assets, and not all of them belong in a portfolio based on our mutually shared belief. For example, if falling rates are occurring alongside economic resilience, I would be inclined to lean into REITs and higher yielding corporate bonds, and cyclicals. If falling rates are a function of global economic weakness, as I suspect they are now, then I shift defensive with longer-dated munis and longer-dated treasuries. The latter offsets my stock exposure, largely comprised of low volatility domestic and Asia excl Japan.

    I still like MLP infrastructure. And a smidge of utilities. Where else can you count on 5% growth and 5% dividends? Granted, many are overpriced, but I protect with stop orders/trendlines with all asset classes.

    Hope that helps,

    Aug 13, 2014. 06:37 PM | Likes Like |Link to Comment
  • 5 Days Of Fearful Trading Provide ETF Insights [View article]

    Is Europe growing? Not really. Valuations are higher for Europe than Asia ex Japan. Is U.S. growing? Check your premises if you think the answer is "Yes." Annualized growth for 2014 is nearly guaranteed to be less than 2013 which was less than 2012. That's called deceleration. And yet, by scores of different measures, U.S. stocks are nearly as expensive as at any bull market top in history.

    The point is that stocks do not necessarily require economic growth for success, particularly when easy money policies (QE, ZIRP) distort what the perception of risk is... particularly for future cash flow. Meanwhile, three years for Chinese equities with no capital appreciation? Heck yes, valuations and money flow rotation and technical uptrends and "qualitative easing" make Asia more attractive than alternatives.

    Does that mean you should not diversfiy? No. Does that mean a bear market would not clobber equities of all stripes. No. It means that -- all thnigs being what they are -- the best place for new dollars (other than waiting out a stock correction or bear in ex-stock hedges or cash), is Asia.

    Not that China's economic output will correlate to stock performance, but why have so many hard landing fanatics decided that 7.5% is worse than 2% Fed-fueled, sub-par growth stateside? Logically, it is a bit laughable. Then again, fear and greed can manifest themselves in a variety of different ways.

    Aug 12, 2014. 04:16 PM | Likes Like |Link to Comment
  • Mauboussin's 5 Principles Of Capital Allocation [View article]
    I am not fond of the worship of certain value "rock stars," including Bill Miller and Michael J. Mauboussin. Offered the opportunity by Forbes to pick one single stock for an upcoming year in the early 2000s, he chose Enron at a price point of 11.99. The irrecoverable losses for Enron shareholders is well-documented. Clearly, MM failed to identify what the market was already pricing in -- that something was rotten at the energy giant.

    Bill Miller made the same falling-knife mistakes with the banks and insurers in the 2008-2009 crisis. Is it not obvious that one really bad error can destroy entire portfolios? Even if one has a value orientation a la Benjamin Graham and Warren Buffett, does it not make sense to incorporate a form of insurance against being reallllllllllllllllly wrong? From my vantage point, no matter what your investing orientation, you can ensure greater success by applying insurance principles to that orientation. Otherwise, a single mistake can destroy a 15-year track record. Just ask Mr. Miller.
    Aug 11, 2014. 01:11 PM | 1 Like Like |Link to Comment
  • 5 Days Of Fearful Trading Provide ETF Insights [View article]

    Same screening tool... you are using end-of-day Friday... the 5-day returns in the article are last Friday through the Thursday close.

    I write commentary well in advance at my web log. That said, even SA's republishing time came before the close of Friday's market.

    Keep in mind, the intent of the article is to discuss/assess how investors have responded to various data/events, as well provide potential insight into how investors MAY respond in the future.


    Aug 8, 2014. 04:14 PM | Likes Like |Link to Comment