Eric Peterson

A Twist on the 'January Effect'

The "January Effect" is the tendency for small-cap stocks to outperform large-cap stock in early January. The January Effect is not January predicting the stock market return for the rest of the year!

And please define your terms. Adjusted R, Intercept Coefficient, Positive January Coefficient, Positive January Coefficient P Value,
F, are all meaningless unless you tell us what they are! First requirement of any good writing is to define your terms.

IBM Set to Spend $1.6B on Emerging Markets

IIF is actually a closed-end-fund, not an ETF. IFN is another Indian closed-end-fund and INP is an exchange-traded-note. I don't know of an ETF for India, but maybe there is one.

I'm not sure what the relationship is between IBM doing business in a country, and that country "already having an ETF".

Thursday Outlook: Sectors and International

Intrinsic value for INP is available daily on Yahoo under the symbol ^INP-IV. Thursday's close: 87.82, and INP closed at 107.10. That's a silly 22% premium. INP closed down 0.7% and IFN down 3.4%, so the spread widened even further.

An Interesting Development With India Funds

I've been watching very closely this ridiculous rise in the premium for INP for the past couple weeks, up to 20% now. With IFN holding many of the same stocks, and trading at a discount of 10% or so, I decided to place a large arbitrage trade on Wednesday. I called Fidelity to short 3,000 shares (about $300,000) of INP, with the plan of buying $300,000 of IFN if successful in shorting INP. If the 30% spread narrows, to say 20%, that's a nice $30,000 profit with little risk. Doesn't matter if the Indian market goes up or down.

But after talking to two different brokers who in turn talked to the trading desks and short specialists, they told me Fidelity has no INP shares to short. Well, the short interest in INP in September was 14% of the total outstandings shares. Who are the people who are able to short INP? Is it a special privilege given to institutions, and not to "small traders" like me who want to short $300,000? Very mysterious. Fidelity customers must own millions of dollars worth of INP. I can't believe there are none available for shorting.

ETFs Are the Easiest Option for Currency Exposure, For Now

I agree with the author. Owning a currency, with no leverage, is much less risky than owning a volatile stock. Stocks can move 50% in days or weeks. Currencies almost never do that. For example, everybody talks about the dollar's steep decline vs. the Euro. But in the past year the dollar has declined less than Citigroup declined in one month, on a percentage bases.

Did I Just See a Dead Cat Bounce?

The more people I see say this is just a small bounce in a new bear market, the more I buy. The majority opinion is usually wrong.

Did I Just See a Dead Cat Bounce?

Well, 11 points up in the SP500 is not a bad day. That's way above the daily average in the bull market the past 4 years. So far, the bounce from Monday's close is 74 points, more than 5%. That's a pretty nice bounce.

Did I Just See a Dead Cat Bounce?

The Dead Cat is still bouncing! Higher and Higher!

November Currently 7th Worst Performing Month Since 1980

"the median % change of the index in the month following declines of at least 5% is 0.45%, with gains 53.85% of the time"

Ok, and for all months since 1980, what is the median % change? I bet it may be more than 0.45%. And how many months had gains since 1980? I bet more than 53.85%. These two numbers should be added to the article for comparison, to see whether or not the months following a big loss are more bullish or bearish than normal.

S&P500 = 1 Week, 1 Month and 3 Month Lows

"It's interesting that the Nazz has the strongest performance, while the S&P lags and the Russell 2000 is worst of all."

Ok, why is it interesting? One of those 3 has to be best, and one has to be worse. Is there some significance to the NASDAQ being best and Russell worst? In the past, has that meant something for the future?

13 Ways to Invest in Turkey: The Fastest Growing Economy in the World

"TURKISH INVESTMENT FUND (TKF) ... sells for 1.18 times net asset value."

Huh? TKF has been selling at a DISCOUNT to NAV since August, and the past few weeks has been at a 10% to 14% discount. Can we believe the other numbers in your article?

13 Ways to Invest in Turkey: The Fastest Growing Economy in the World

"TURKISH INVESTMENT FUND (TKF) ... sells for 1.18 times net asset value."

Huh? TKF has been selling at a DISCOUNT to NAV since August, and the past few weeks has been at a 10% to 14% discount. Can we believe the other numbers in your article?