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Richard Shaw  

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  • Correction Yes; Bear Probably Not Soon, But Possible - Key Indicators Discussed [View article]
    I agree that we have a statistically small sample size for the yield curve (the "Term Spread"). Unfortunately, most investment indicators have the same sample size problem. Seeking confirmation from indicators based on non-overlapping factors is one way to partially overcome the reliability of single indicators.

    As one reader pointed out, the Fed manipulation of interest rates may make the yield curve less reliable than otherwise. That is partly why we included the 5-yr/10-yr curve in the supporting charts -- those rates being less impacted by ZIRP than the 3-mo/10-yr

    Yes, it's a really tough call. The multi-factor Stress Indexes are still good (and they have only two recession of backtest, but logical support), but then the high yield options adjusted yield spread (the "Quality Spread") has been flashing warnings for some time.

    What is your opinion of the research papers from the New York Fed (1996)and the National Bureau of Economic Research through University of Wisconsin (2010) on the yield curve predictive powers?

    http://tinyurl.com/e46ud
    http://www.ssc.wisc.edu~mchinn/w16398.pdf
    Aug 31, 2015. 10:50 AM | Likes Like |Link to Comment
  • Correction Yes; Bear Probably Not Soon, But Possible - Key Indicators Discussed [View article]
    That is the challenge -- to rely of an indicator with a solid record (the yield curve) which has not predicted in Corrections, but has predicted Bears; or to rely on sever breadth deterioration with occurs in Corrections and continue during Bears (therefore preceding Bears).

    If the yield curve (and also the Stress Indexes which have worked as predictors in their short history) are good, then you might say breadth deterioration are Necessary But Not Sufficient, whereas the yield curve flattening is Necessary.

    That is the big question, and that is why we are 1/2 in and 1/2 our equity allocation in accounts of retired investors who do not have excess assets -- due to the uncertainty of the matter
    Aug 31, 2015. 07:00 AM | Likes Like |Link to Comment
  • Correction Yes; Bear Probably Not Soon, But Possible - Key Indicators Discussed [View article]
    It would be nonsense if we were discussing the Japanese stock market, but we are not. Research by the Federal Reserve and by the National Bureau of Economic Research have shown that the yield curve indicator works in the US pretty well, works adequately in Germany (but more as a coincident indicator) and not well in Japan
    Aug 31, 2015. 06:54 AM | Likes Like |Link to Comment
  • Retirement Strategy: Evaluating Your Risk Tolerance Can Be Gut-Wrenching But Vital [View article]
    excellent point about risk tolerance assumption before and upon market declines.
    Aug 19, 2015. 10:03 AM | 2 Likes Like |Link to Comment
  • Are Stocks Overvalued? A Survey Of Equity Valuation Models [View article]
    Thank you for this excellent comparison of valuation approaches
    Jul 24, 2015. 09:04 AM | 2 Likes Like |Link to Comment
  • Survey Of Technical Condition And Portfolio Attributes Of Key Bond Fund Types [View article]
    This was not intended to provide an actionable idea. That is why it is titled "survey" and why the narrative talks about providing the broad perspective necessary to make your own suitability decision. Not every article is meant to tell you what to do. Some as this one are meant to gather and distill data that most people do not have or do not have the time or tools to assemble. There is a large wide choice of bond fund investments and this tries to put them categorically into perspective.
    Apr 16, 2015. 01:22 PM | 2 Likes Like |Link to Comment
  • Market Trend Analysis By Comparing Equal Weight To Market Weight Indexes [View article]
    Nice analogy
    "I may look just fine, but I'm not feeling all that well."
    Mar 27, 2015. 04:56 PM | 1 Like Like |Link to Comment
  • Market Trend Analysis By Comparing Equal Weight To Market Weight Indexes [View article]
    Glad to be of help. Also along the same lines, the ratio of performance of the market-cap weighted indexes is illuminating. Example: Russell 2000 over Russell 1000, or Consumer Discretionary over Consumer Staples, or S&P 100 (or Russell Top 50) over S&: 500, and similar ratios. Presumably if the smaller cap is doing better than the larger cap, the market is stronger than if the reverse, and if the discretionary is doing better that the necessary, the market is stronger than if the reverse.
    Mar 27, 2015. 03:12 PM | 1 Like Like |Link to Comment
  • Treasury's Quicksilver Market Reversal Indicators Vs. David Rosenberg Indicators [View article]
    I have heard that many times too, and I do expect at least a temporary negative reaction to the first Fed rate increase, but the factual history as shown in the top panel of the last image is that the saying is not always true -- in fact false in the last 20 years
    Mar 26, 2015. 11:57 AM | 1 Like Like |Link to Comment
  • The Future Of Seeking Alpha, From One Contributor's Perspective [View article]
    I'm with you on that
    Mar 25, 2015. 06:05 PM | Likes Like |Link to Comment
  • The Future Of Seeking Alpha, From One Contributor's Perspective [View article]
    You have a good point.
    Mar 25, 2015. 11:55 AM | 4 Likes Like |Link to Comment
  • Best Relative Sortino Risk Adjusted Returns For Mutual Funds [View article]
    this is Morningstar calculation
    Mar 24, 2015. 02:59 PM | Likes Like |Link to Comment
  • Relative Risk Adjusted Return For Retirees And Those Who Prefer A Smoother Ride [View article]
    sorry about spelling error. mobile app appears not to enable correcting replies. the auto correct on phone slips in unintended spellings
    Mar 21, 2015. 06:23 PM | Likes Like |Link to Comment
  • Relative Risk Adjusted Return For Retirees And Those Who Prefer A Smoother Ride [View article]
    yes MS Sortinino
    Mar 21, 2015. 06:19 PM | 1 Like Like |Link to Comment
  • Relative Risk Adjusted Return For Retirees And Those Who Prefer A Smoother Ride [View article]
    I will be seeking to publish an article on relative risk adjusted return for mutual funds, but it will be elsewhere because SeekingAlpha does not publish mutual fund related articles. When/If published, I will post a note here as to its location.
    Mar 21, 2015. 02:36 PM | Likes Like |Link to Comment
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