The Economist – The status of economists: The power of self-belief A new paper looks at how economists became so influential “IF ECONOMISTS could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!” said John Maynard Keynes, a British economist. Despite their collective failure to… Continue reading What Economists Think Of Themselves
[pageview class=”PDFViewer” url=”https://www.biancoresearch.com/bianco/wp-content/plugins/PDFViewer/plugin.php?id=226″] Arbor Quantitative Analytics – Global Equity Seasonality – The Santa Rally December’s seasonal bias for equities is firmly bullish and concentrated in the final half of the month. AQA’s 5 day holding period analysis shows bullish swings beginning after trading days 14-17. For 2014 that corresponds to December 19th through December 24th.
CNBC – Near-perfect sell signal says stocks should drop It’s the No. 1 question puzzling traders right now: How can prices for high-yield bonds be falling and prices for stocks rising, when they’ve so reliably traded in tandem in the past? Prices for high-yield bonds are a great coincident—and sometimes leading—indicator for stocks because they… Continue reading High Yield And Stocks Diverging
BusinessWeek – One of the Most Famous Rules of Investing Might Be Totally Wrong Boston-based asset manager GMO recently looked at risk and return data for U.S. stocks from 1970 to 2011, and what the researchers found is surprising: The riskiest 25 percent of stocks—those most vulnerable to swings of the broad market—logged an average… Continue reading Risk and Return
Janus Capital Group – Bill Gross: How Could They? …each of these central bankers is trying to achieve the same basic objective: Solve a debt crisis by creating more debt. Can it be done? A few years ago, I wrote that this uncommonsensical feat could be accomplished, but with a number of caveats: 1) Initial… Continue reading Bill Gross Speaks
GMO – James Moniter: The World’s Dumbest Idea Conclusions So what is one to conclude from this tirade? Three things stand out to me, each addressing a different constituency: Shareholder’s Lesson Firstly, SVM has failed its namesakes: it has not delivered increased returns to shareholders in any meaningful way, and may actually have led to… Continue reading James Moniter Speaks
The Economist – Buttonwood: Take your pick The key to stockmarket success is avoiding the worst sectors Nevertheless, it pays to avoid the laggards. The Economist’s hypothetical prescient investor, Felicity Foresight, would have earned a return of 66% since the start of 2007, had she simply steered clear of the worst-performing sector each year. That… Continue reading How To Beat An Index
Back on November 14 we noted that economic volatility is disappearing. We also noted: The chart below shows economic volatility (the volatility in month-to-month readings) on a non-seasonally adjusted basis in red and on a seasonally adjusted basis in blue. These series show a recurring theme in the data. Non-seasonally adjusted volatility has not changed… Continue reading A Thought Before Tomorrow’s Payroll Report … Everyone Has The Same Estimate!
<Click on chart for larger image> The Financial Times – Return of the buyback extends US rally Bullish equity investors have company. With stocks loitering in record territory, corporate America remains a major buyer of shares. One of the primary drivers of the ageing US bull market — share buybacks and dividend payouts — has… Continue reading Stock Buybacks
The Wall Street Journal – Dollar’s Rise Causes Pain Abroad A surging dollar and falling commodities prices are delivering a windfall to American shoppers and confounding central bankers by widening the gap between the expanding U.S. economy and struggling countries in Europe and Asia…The dollar’s gains are intensifying declines in commodities including food, metals and… Continue reading The Surging Dollar
The Financial Times – Gavyn Davies: The Fed and ECB differ sharply on the oil shock The FT’s Martin Wolf has said almost everything that needs to be said about the global economic effects of the 2014 oil shock, but one additional point is worth emphasising. This is the fact that the US Federal Reserve… Continue reading The Fed vs. The ECB