Looking for a new book to read?
Gladwell is usually a good choice. He wrote Blink, The Tipping Point, Outliers, and What the Dog Saw.
Somehow his books (and their titles) capture the imagination and a spot on bookshelves.
I showed this to some friends and they thought it sounded interesting. What do you think?
Now, you can generate your own New Gladwell Best Seller. Try it out. Yes, the 25 alternatives are fake … but they're funny.
Looking for a new book to read?
Gladwell is usually a good choice. He wrote Blink, The Tipping Point, Outliers, and What the Dog Saw.
Somehow his books (and their titles) capture the imagination and a spot on bookshelves.
I showed this to some friends and they thought it sounded interesting. What do you think?
Now, you can generate your own New Gladwell Best Seller. Try it out. Yes, the 25 alternatives are fake … but they're funny.
I spent a few days last week in Manhattan meeting with lawyers and accountants.
On one hand, that doesn’t sound like a lot of fun. On the other hand, it was terrific.
New York has its Mojo back.
It could have been that there was so much energy, activity, and a sense of bigger things to come …
Or, it could have been this massive slice of bacon they serve at Peter Luger's.
I spent a few days last week in Manhattan meeting with lawyers and accountants.
On one hand, that doesn’t sound like a lot of fun. On the other hand, it was terrific.
New York has its Mojo back.
It could have been that there was so much energy, activity, and a sense of bigger things to come …
Or, it could have been this massive slice of bacon they serve at Peter Luger's.
Sometimes Less Is More – Especially With Government Actions.
Does it matter to you if the markets go higher because of organic growth or because of intervention? On a personal basis it might … but as a trader, the Market is always right. Whether it goes up or down, the trader's job is to find a way to get a decent risk-adjusted return.
In the "Wizard of Oz", as Dorothy and her friends are being amazed by the 'Great and Powerful Oz' …they are told: "Pay no attention to that man behind the curtain."
It is great to buy in to the story, but for how long … and at what cost. Sometimes, I find myself shaking my head as I think about the 'man behind the curtain' in this market. Is he "great and powerful" or just a man pulling levers and pushing buttons while hoping the great majority are fooled.
A Lever To Watch – The Interest Rate The Government Pays.
Dylan Grice, of Société Générale, published some research that got a lot of attention. One chart, in particular, caught my eye. It shows two hundred years of US government bond yields.
Commenting on it, the Financial Times and Zero Hedge both noted that as the interest rate that the government pays increases, it will be harder for the government to service and will represent a much larger percent of government revenues.
Till then, well, the market is still going up.
Market Commentary.
The rally continues. In situations like this, the trend is your friend. Nonetheless, I tend to watch for early warning signs. So, here, I am watching the obvious trend-line (marked by the green arrow) on the S&P 500 Index.
If we break below the green up-trend line, bearish traders will likely take that as a sign.
In addition, there are some internal breadth issues and divergences that are worth noting. However, the market measure that caught my eye recently is the increase in the average true range that we are seeing on a daily basis. Volatility often spikes at market tops.
Hope that helps; have a nice week.
Business Posts Moving the Markets that I Found Interesting This Week:
Lighter Ideas and Fun Links that I Found Interesting This Week
Sometimes Less Is More – Especially With Government Actions.
Does it matter to you if the markets go higher because of organic growth or because of intervention? On a personal basis it might … but as a trader, the Market is always right. Whether it goes up or down, the trader's job is to find a way to get a decent risk-adjusted return.
In the "Wizard of Oz", as Dorothy and her friends are being amazed by the 'Great and Powerful Oz' …they are told: "Pay no attention to that man behind the curtain."
It is great to buy in to the story, but for how long … and at what cost. Sometimes, I find myself shaking my head as I think about the 'man behind the curtain' in this market. Is he "great and powerful" or just a man pulling levers and pushing buttons while hoping the great majority are fooled.
A Lever To Watch – The Interest Rate The Government Pays.
Dylan Grice, of Société Générale, published some research that got a lot of attention. One chart, in particular, caught my eye. It shows two hundred years of US government bond yields.
Commenting on it, the Financial Times and Zero Hedge both noted that as the interest rate that the government pays increases, it will be harder for the government to service and will represent a much larger percent of government revenues.
Till then, well, the market is still going up.
Market Commentary.
The rally continues. In situations like this, the trend is your friend. Nonetheless, I tend to watch for early warning signs. So, here, I am watching the obvious trend-line (marked by the green arrow) on the S&P 500 Index.
If we break below the green up-trend line, bearish traders will likely take that as a sign.
In addition, there are some internal breadth issues and divergences that are worth noting. However, the market measure that caught my eye recently is the increase in the average true range that we are seeing on a daily basis. Volatility often spikes at market tops.
Hope that helps; have a nice week.
Business Posts Moving the Markets that I Found Interesting This Week:
Lighter Ideas and Fun Links that I Found Interesting This Week
Warren Buffett’s annual letter to Berkshire Hathaway shareholders is out.
In it, he speaks of opportunity. For example, he informs: “Our elephant gun has been reloaded, and my trigger finger is itchy”.
Buffett's annual letter is always an interesting read … even if you don’t agree with everything he says. There is a reason he is called “the Oracle of Omaha.” Even the introduction had a few of the ideas that jumped off the page.
“Money will always flow toward opportunity, and there is an abundance of that in America. Commentators today often talk of “great uncertainty.” … No matter how serene today may be, tomorrow is always uncertain.
Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born. The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.
We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead.”
He later reminds: "At Berkshire, our time horizon is forever". That perspective makes it a lot easier for the game not to end until you've won.
Further, the Pragmatic Capitalist highlights this lesson:
Nothing stopped so many innovators and entrepreneurs more than the fear of failure. If you allow yourself to be constantly scared into thinking that the world is doomed you will never take that risk which might result in great reward. And perhaps worse, if you never fail you will never learn to get up, brush yourself off, move on and succeed in the future. This does not mean you should wander through this world with great complacency and blind optimism, but if you deny yourself the ability to maximize your full potential, you will always come up short.
Here is a link to what others are saying about this year's letter.
Warren Buffett’s annual letter to Berkshire Hathaway shareholders is out.
In it, he speaks of opportunity. For example, he informs: “Our elephant gun has been reloaded, and my trigger finger is itchy”.
Buffett's annual letter is always an interesting read … even if you don’t agree with everything he says. There is a reason he is called “the Oracle of Omaha.” Even the introduction had a few of the ideas that jumped off the page.
“Money will always flow toward opportunity, and there is an abundance of that in America. Commentators today often talk of “great uncertainty.” … No matter how serene today may be, tomorrow is always uncertain.
Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born. The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.
We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead.”
He later reminds: "At Berkshire, our time horizon is forever". That perspective makes it a lot easier for the game not to end until you've won.
Further, the Pragmatic Capitalist highlights this lesson:
Nothing stopped so many innovators and entrepreneurs more than the fear of failure. If you allow yourself to be constantly scared into thinking that the world is doomed you will never take that risk which might result in great reward. And perhaps worse, if you never fail you will never learn to get up, brush yourself off, move on and succeed in the future. This does not mean you should wander through this world with great complacency and blind optimism, but if you deny yourself the ability to maximize your full potential, you will always come up short.
Here is a link to what others are saying about this year's letter.
This week's Trader's Narrative Sentiment Overview notes that margin debt is rising sharply as traders and investors increasingly take a more aggressive posture.
Every month, the New York Stock Exchange (NYSE) releases numbers showing how much money was borrowed on margin to buy stocks on the NYSE. As you can imagine, the amount of stock bought on margin is extremely large, but the total number fluctuates quite a bit based on how confident traders are. When stock traders are confident, they borrow more on margin. When stock traders are less confident, they borrow less on margin. Clearly traders are becoming more confident.
Historically, How Does the Market Handle Doubling Within Two Years?
One such occasion was in 1934, coming off a "very deeply oversold condition" in 1932 and the other one was in 1937. After 1937 and 1934, the 12 months return were both negative, Faber said.
Here is a chart showing 102 week rolling returns for the S&P 500 Composite Index.
These levels of gains have preceded significant pullbacks. Here is a table showing the detail.
This is simply a historical look at similar rally intensities. Nonetheless, Faber warns: "I would be a little bit careful here to just buy the US because investor sentiment is very positive. The volume has been relatively sluggish and the market is extremely overbought by any statistical model".
Price is still the primary indicator. Let's see if traders buy the pull-back?
Business Posts Moving the Markets that I Found Interesting This Week:
Lighter Ideas and Fun Links that I Found Interesting This Week
This week's Trader's Narrative Sentiment Overview notes that margin debt is rising sharply as traders and investors increasingly take a more aggressive posture.
Every month, the New York Stock Exchange (NYSE) releases numbers showing how much money was borrowed on margin to buy stocks on the NYSE. As you can imagine, the amount of stock bought on margin is extremely large, but the total number fluctuates quite a bit based on how confident traders are. When stock traders are confident, they borrow more on margin. When stock traders are less confident, they borrow less on margin. Clearly traders are becoming more confident.
Historically, How Does the Market Handle Doubling Within Two Years?
One such occasion was in 1934, coming off a "very deeply oversold condition" in 1932 and the other one was in 1937. After 1937 and 1934, the 12 months return were both negative, Faber said.
Here is a chart showing 102 week rolling returns for the S&P 500 Composite Index.
These levels of gains have preceded significant pullbacks. Here is a table showing the detail.
This is simply a historical look at similar rally intensities. Nonetheless, Faber warns: "I would be a little bit careful here to just buy the US because investor sentiment is very positive. The volume has been relatively sluggish and the market is extremely overbought by any statistical model".
Price is still the primary indicator. Let's see if traders buy the pull-back?
Business Posts Moving the Markets that I Found Interesting This Week:
Lighter Ideas and Fun Links that I Found Interesting This Week
