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  • The New S&P All-Time High Vs. 2007 Peak [View article]
    I have never seen the market described as a Potential Complex Spiral Meltup
    Jul 12 05:43 PM | 1 Like Like |Link to Comment
  • The New S&P All-Time High Vs. 2007 Peak [View article]
    Agreed Ted, which I why I have advocated that the Fed will be slower to withdraw accommodation than what has been recently priced in markets. I liken the withdraw to one of those magicians trying to pull a tablecloth from under place settings - a difficult feat to pull off. We are going to see some bouts of volatility, but lest we forget that accommodation can only be withdrawn because economic growth and the labor markets are markedly better.
    Jul 12 05:42 PM | Likes Like |Link to Comment
  • The New S&P All-Time High Vs. 2007 Peak [View article]
    You are right - valuing this market is difficult given that the unwind of monetary accommodation of this size is unprecedented - the only way to frame the present is against what we know about the past, which I was attempting. While there is no comparable past period, investors can try and frame their necessary risk premium for differences in periods. Thanks for reading and commenting
    Jul 12 05:39 PM | 1 Like Like |Link to Comment
  • The New S&P All-Time High Vs. 2007 Peak [View article]
    Thanks big
    Jul 12 05:37 PM | Likes Like |Link to Comment
  • The New S&P All-Time High Vs. 2007 Peak [View article]
    I don't think these two have to be mutually exclusive, and I would not define myself as exclusively either. I have both a tactical and strategic portion of my portfolio. The former is short-term focused and the latter is longer-term focused. Momentum is important for the tactical bent. From a strategic perspective, emerging market stocks have sold off relative to U.S. stocks in the first half of 2013 by the most since the back half of 2008. The last two quarters returns for the EM index have trailed the S&P 500 by more than double digits, the first consecutive quarters with this dubious distinction since 1998 (Russia default/LTCM). For my long-term structural allocation, where I am trying to buy assets that are cheap and am okay taking short-term volatility because I am not planning on using any of the money in the near-term, I am definitely evaluating a swap to EM stocks where I have been justifiably underweight from what are now relatively expensive U.S. stocks
    Jul 12 05:37 PM | 1 Like Like |Link to Comment
  • Equity Momentum - July 2013 [View article]
    Thanks for reading Jay - high volatility stocks rode the tech boom in the late 90s that ultimately burned investors; here's another look at low volatility investing: http://seekingalpha.co...
    Jul 8 10:30 PM | Likes Like |Link to Comment
  • Equity/Fixed Income Momentum - July 2013 [View article]
    I have thought about this as well. Backtesting with cash leads to high returns given high historical short-term interest rates, but cash returns now are close to zero. What do you suggest using as an average return?
    Jul 7 09:11 PM | Likes Like |Link to Comment
  • 10 Investment Themes For Mid-2013 [View article]
    Household worth ended the first quarter at an all-time high; we will see consumption growth and that does not have to be consumers pulling equity out of their homes.

    Emerging markets are going to remain volatile, buy given their tremendous underperformance, I believe strong hands buying today will outperform strongly over the next decade.
    Jun 20 08:47 PM | Likes Like |Link to Comment
  • 10 Investment Themes For Mid-2013 [View article]
    Sustained low rates is the risk for insurance companies. While rising rates will reduce the value of their fixed income portfolios, insurance companies will be able to invest at higher yields prospectively, increasing margins relative to what they have promised to credit policyholders. Banks have been a high vol trade post-crisis, given that banks are holding 2x capital. If banks continue to be a high vol trade, then there will be opportunities to selectively add in this market.
    Jun 20 08:42 PM | Likes Like |Link to Comment
  • Dividend Stocks And Higher Rates ('94 Example) [View article]
    Glad this was interesting Cheesehusker and Okatie Jack - did the research for my own edification and thought I would share with the income investing audience - thanks for reading
    Jun 10 08:14 PM | Likes Like |Link to Comment
  • Equity/Fixed Income Momentum - June 2013 [View article]
    These are total returns, so include applicable dividends - thanks
    Jun 3 07:07 PM | Likes Like |Link to Comment
  • Fixed Income Momentum - June 2013 [View article]
    Thanks jbzw - I like your strategy of earning higher returns through going down in credit quality in short duration bonds. Default rates are likely to stay low, and you are less exposed to rising rates which we saw generate poor performance in long duration assets.
    Jun 2 04:37 PM | 2 Likes Like |Link to Comment
  • Revisiting The SuperDividend ETF And Its 7.3% Yield [View article]
    Phenom - look at the net asset values (assets - liabilities) of the funds, which have declined substantially. Imagine you lent somebody $100 and they owe you 3.5% per year for thirty years. Let's ignore the amortization and pretend that at the end of 30 years they will pay you back the $100. If the market interest rate goes from 3.5% to 4% to lend $100 to the same type of borrower, then your loan at 3.5% is underwater. If you were forced to sell your loan to someone else, they wouldn't pay you $100 for it because they could lend in the market at 4% instead. They will pay you a discount. This is why mortgages and mortgage REITs have fallen in value.

    While the ultrashort end is pegged, many of these REITs borrow in the belly of the curve so they do not have to continually roll financing. The cost on that financing rose - as a reference rate, the 5yr Treasury is up from .7% to 1%, so the spread that they are earning did not increase as much as you are suggesting.

    Hope this helps - let me know if you have any more questions.
    Jun 2 04:35 PM | Likes Like |Link to Comment
  • Fixed Income Momentum - June 2013 [View article]
    True Diego - although with the expansion of ETFs into the fixed income universe, I wouldn't be surprised if we saw funds based on ratings cohorts. Of course, a fund with on demand liquidity holding a replicating portfolio of less liquid portfolios would either need to charge high fees for transaction costs, or potentially increase the liquidity of less liquid bonds. While I don't expect investors to be able to replicate this strategy, I do think that the alpha-generative nature far outweighs the transaction costs. There would not have been a trade needed for the last seven months as CCCs outpaced BBs. I think that this idea is valuable for investors wondering how they should lean their bond portfolio. This is my original idea - I believe it is quite powerful - and I am happy readers are getting it for free with monthly updates on performance. If you disagree with the efficacy, that is what makes markets. Thanks for reading and commenting.
    Jun 2 02:09 PM | 3 Likes Like |Link to Comment
  • Revisiting The SuperDividend ETF And Its 7.3% Yield [View article]
    You are partially correct phenom1 - mortgage REITs can now potentially earn a higher spread, but their existing long mortgage holdings have fallen in value sharply. Mortgage REITs that borrow in the belly of the curve saw a rising five-year increase their financing costs while the value of their holdings fell - a double whammy.
    Jun 1 03:12 PM | 1 Like Like |Link to Comment
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395 Comments
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