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Poor positioning by portfolio managers is suggesting a near-term market pullback may be on the...

Poor positioning by portfolio managers is suggesting a near-term market pullback may be on the way, says BMO's Brian Belski. Right now he says they're inundated with questions from portfolio managers who are "clearly under-performing the market." When that happens, you know that managers are straying from their discipline. "When they stray," Bielski warns, "bad things happen, the market rolls over, you do emotional things and sell stock."
Comments (9)
  • marpy
    , contributor
    Comments (802) | Send Message
     
    Portfolio managers that are under- performing the market! ??? Last time I checked that was something like 90% of them!!!!! Nothing new there!!!
    22 Apr 2013, 06:58 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4091) | Send Message
     
    So, who is outperforming the market? Or is the market now going upon its own?
    22 Apr 2013, 06:59 PM Reply Like
  • Convex Strategies
    , contributor
    Comments (453) | Send Message
     
    We may indeed be pulling back, but this is likely not the catalyst. It seems like most funds in trouble are those who have been long gold, short europe (fear trade), and underweight us equities. This was the case for most underperformers last year.

     

    On the flip side, you had guys like Tepper who were long beta and financials and crushed everyone.

     

    The sell-off in gold is the start of this repositioning that favors stocks and probably even treasuries to some extent.
    22 Apr 2013, 07:07 PM Reply Like
  • dacama1
    , contributor
    Comments (217) | Send Message
     
    The long gold/short stocks trade is over. It was very profitable, but time to flip it.
    22 Apr 2013, 09:01 PM Reply Like
  • Ted Bear
    , contributor
    Comments (607) | Send Message
     
    The 'Market' as we historically know it is on hiatus. There is no fundamental reason for the performance of equites, nor bonds for that matter. Who ever heard of record trillions of dollar of debt with no chance that it could ever be repaid, and interest rates at zero?

     

    The 'marklet' is where it is because the Fed has opened the spogit wide, at zero short term cost to the nation. While it is true that the majority of portfolio managers underperform (which is why it pays to own unmanaged indices, btw), it is fair to give them a bit of a break ( I never thought i would say that!) this time around. They are looking at weak fundamentals, high unemployment, huge deficits, the worst of political shenanigans in Washington, and conlcuding, probably correctly (yes, i know all about the wall of worry), that this is not a good time to be overweight equities. When a market is detached from the fundamentals it is probably a good time to disengage. They won't be correct until the punch bowl is withdrawn or the nation finally recognizes that it is kaput: but when it does, the exit doors from the 'market' will be boarded shut.

     

    Caveat Emptor (and enjoy the ride if you think you are quick enough to get through the door before it closes).
    22 Apr 2013, 08:03 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5369) | Send Message
     
    Then there are some that are looking at earnings, PE multiples, and price action. Keep it simple!
    22 Apr 2013, 10:01 PM Reply Like
  • convoluted
    , contributor
    Comments (1970) | Send Message
     
    Yes, most fund managers underperform.-nothing new.
    22 Apr 2013, 08:58 PM Reply Like
  • Topcat
    , contributor
    Comments (435) | Send Message
     
    "record trillions of dollar of debt" - that is public debt...most companies are doing very very well, terrific profits and cash on hand, have paid off debt...
    22 Apr 2013, 09:28 PM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (6298) | Send Message
     
    If you are underperforming aren't buying instead of selling?
    22 Apr 2013, 09:29 PM Reply Like
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