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Roman Chuyan, CFA

 
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  • Playing Defense All Around The World [View article]
    @thechaser, yes. I wrote about some of them in my articles. Investors who were guided by these fundamentals in the last 5y were rewarded. On the other hand, those who listened to perma-bears and invested accordingly (short equities, long gold/commodities), lost money. Point is - if you have funds to invest, don't listen to these Armageddon predictors (there are many).
    Nov 20, 2014. 05:31 PM | Likes Like |Link to Comment
  • Playing Defense All Around The World [View article]
    The reason for the "unyielding" U.S. stock market performance is very strong economic fundamentals, both coincident (spending, production), and leading (durable orders, confidence, jobless claims). Note today's 0.9% rise in Conference Board's leading economic indicator, for example. Jobless claims are the lowest in 14y, and have only been this low once in the past 40y, in 1999. Fundamentals drive markets.
    Nov 20, 2014. 02:52 PM | Likes Like |Link to Comment
  • Playing Defense All Around The World [View article]
    The reason for the "unyielding" U.S. stock market performance is very strong economic fundamentals, both coincident (spending, production), and leading (durable orders, confidence, jobless claims). Note today's 0.9% rise in Conference Board's leading economic indicator, for example. Jobless claims are the lowest in 14y, and have only been this low once in the past 40y, in 1999. Fundamentals drive markets.
    Nov 20, 2014. 02:52 PM | 1 Like Like |Link to Comment
  • Before It's Too Late [View article]
    Trying to be pessimistic - a bit too hard..
    Nov 20, 2014. 02:41 PM | Likes Like |Link to Comment
  • Gold Is On Trial And The Verdict Is Just A Few Days Away [View article]
    The PPI tomorrow (Nov 18) may be a big test for gold. I think PPI will be lower than expected based on how far commodities have dropped. Negative PPI = threat of deflation = lower interest rates, lower gold.
    Nov 17, 2014. 05:19 PM | 1 Like Like |Link to Comment
  • Dividend Growth Investing IS Total Return Investing [View article]
    BoomBoom, SDY returns are available for 10y, but good point on VIG. Performance does depend on the period. Your numbers show small outperformance for SDY and VIG, ~80 bps p/a - significantly less than is shown in research quoted here. DVY underperformed. My point, "Trying to find an effective diversified investment vehicle to profit from this alleged Alpha turns out to be difficult."
    Nov 16, 2014. 03:03 PM | Likes Like |Link to Comment
  • Dividend Growth Investing IS Total Return Investing [View article]
    Author - great article, thanks. The effect of high/growing dividends on TR has been shown to be substantially positive historically, in numerous research.

    Trying to find an effective diversified investment vehicle to profit from this alleged Alpha turns out to be difficult, however. All 3 major ETF sponsors have a dividend product: DVY, SDY, VIG. They all have papers to promote their products, such as the BlackRock one you cite (iShares is owned by BlackRock) which I would be reluctant to rely on - it's basically marketing (they have just as credibly-sounding papers promoting growth stocks).

    When plotting their 10y TR, we find that Vanguard's VIG matched SPY, the other 2 UNDERPERFORMED - see chart: http://bit.ly/1yzzFIv. In 2008-09 downturn, VIG dropped less than SPY, the other 2 dropped MORE than SPY. So the recent experience doesn't support the research, unfortunately.

    While I haven't done detailed research to uncover the reasons (others may have), I can think of several possible reasons for this:
    1. Dividend yield has been much lower recently (only ~2% for the S&P 500) than in prior periods, which may explain the higher positive performance of the dividend factor in prior periods.
    2. Some studies don't account for fees, while the simple 10y ETF performance chart does. Expense ratio for these ETFs is 35-40 bps (except VIG is lower), vs. 9 bps for SPY. Combined with low dividend yield, the fees may offset the performance benefit.
    3. Research based on 'tiers', such as breaking the stock universe into quartiles/quintiles based on dividend yield, may include the benefit of hindsight. We must look carefully at how those tiers are constructed.
    4. Any positive alpha from the dividend factor may have been arbitraged away in recent years.

    So I'm not entirely disputing the Alpha from the dividend factor - just saying that it's harder to achieve than it may seem.
    Nov 12, 2014. 12:17 PM | Likes Like |Link to Comment
  • Why The Shiller P/E Is Useless [View article]
    Agree with the author, Shiller's PE has significant shortfalls.
    If anyone is interested in another angle on this subject, I have an article on this: http://seekingalpha.co...
    Nov 3, 2014. 07:25 AM | 10 Likes Like |Link to Comment
  • Oil Price: Beginning Of A Downtrend [View article]
    Thank you, Scott. Agree that demand for paper is an important driver of the price, at least in the short term. The Supply-Demand chart that I described looks at broader measures: demand growth and supply capacity growth, globally. To the extent that capacity growth is not met with demand (production), it results in Spare capacity - nothing to do with production, but arguably an important metric. These metrics seem to be highly correlated with subsequent 1-2y price performance, but maybe not over weeks/months that one would need for trading. The IEA's Mid-Term Oil Market report is issued annually, not sure if IEA updates them more frequently.

    Regarding inventories - I think US crude oil + products inventory is at 1.14B barrels now (excluding SPR), which is close to all-time high. You may want to look at that, if it leads price better than just crude inventory. It's on the IEA web site.
    Oct 29, 2014. 02:51 PM | Likes Like |Link to Comment
  • Oil Price: Beginning Of A Downtrend [View article]
    Fernando, good question, sorry it's a bit confusing. It is actually growth in capacity rather than in the amount of supply. The IEA chart says "supply Capacity growth," but I simply use "supply growth." To the extent that it exceeds demand (ignoring change in stocks), Spare Capacity rises.

    Also, U.S. stocks of crude oil and products are material and not constant - stocks are currently approaching a record 1.14 billion barrels (excluding the strategic petroleum reserve).

    Hope this helps.
    Oct 28, 2014. 10:23 PM | Likes Like |Link to Comment
  • Oil Price: Beginning Of A Downtrend [View article]
    @Dougmayer, I agree, over several years, it likely will.
    Oct 28, 2014. 06:15 PM | Likes Like |Link to Comment
  • Gold: Making The Most While Avoiding The Risks - A Strategy For Income Investors [View article]
    Rick - a great rebuttal of common gold standard myths, laid out in simple terms - thanks!
    Oct 24, 2014. 05:43 PM | Likes Like |Link to Comment
  • Market Outlook - Will The Bounce Have Legs? [View article]
    Price - good summary of strong US fundamentals. Fundamentals drive markets, not technicals. "Resistance" proved to be imaginary; indices wend through 200dMA's like knife through butter.
    Oct 23, 2014. 10:08 AM | 1 Like Like |Link to Comment
  • Thoughts From Dallas On Ebola And The Markets [View article]
    Finally some common sense about this ebola/market craze - thanks!
    Oct 15, 2014. 05:40 PM | 1 Like Like |Link to Comment
  • Warning: Market Correction Last Week... Did You See The Opportunity? [View article]
    Frank - good article.

    Your argument that OPEC+Russia would cut production based on their production costs and/or budget, while seems theoretically strong, may not be historically valid. These countries would still HAVE to produce/export as much as they can, at lower prices, in order to receive that export revenue. Historically, they tend to claim to 'limit' production, only to exceed their quotas. As a result, oil has historically traded at: $13-$20 in late 1990's, $25-$30 in 2000-03 (WTI prices).

    Also, keep in mind that it is in the U.S. political interest to keep Brent price as low as possible - even if only to disadvantage OPEC, Russia. We are now the largest producer in the world, at about 8.8 mb/d running, while we still consume 11+ mb/d. In that light, here's a possibility: the U.S. limits its crude imports, thus pressuring Brent further, but boosting WTI to support U.S. producers... just a thought.
    Oct 15, 2014. 01:40 PM | Likes Like |Link to Comment
COMMENTS STATS
173 Comments
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