Capitalogix

Asset Class Scoreboard Q1

A look back at the first quarter of 2015 shows that Managed Futures is relatively strong YTD.

Attain Capital posted this chart showing the comparative performance of eight asset classes.

via Attain Capital.

It will be interesting to see how the next three quarters play out.

Knowing What To Do - Versus Doing It!

Approximately 12 years ago, former Secretary of Defense Donald Rumsfeld sent what was perhaps one of  the great memos of all time.

Titled "issues with various countries," it alludes to major Bush administration foreign policy challenges, and asks Undersecretary of Defense Doug Feith to fix them. 

Here is the memo.

 

 

Identifying issues is different than knowing what to do.

Knowing what to do is different than doing it.

Sometimes, what you do doesn't matter.

 

If you are the President, chances are ... the other party doesn't approve.

A look at presidential job approval ratings indicate that Obama is the most divisively partisan president in modern history.

 

via: Pew Research

 

Presidents Reagan and Clinton are the only two who didn’t see their numbers fall off a cliff.  While Ike and Obama saw their numbers only fall modestly.

Nonetheless, the 67 point gap (between Obama's popularity among Democrats and Republicans) was the highest on the list.

Is Margin Debt Growth Something to Worry About - Or Celebrate?

Margin debt hit a record of almost $465 billion on the New York Stock Exchange in February, as investors borrowed more money than ever to buy into the post-financial-crisis bull market.

On one hand, that’s a good thing, for now, because it shows confidence. But, on the other hand, some traders believe that rapidly rising margin debt can be an early indicator of a market top.

This chart compares the percentage growth of Margin Debt to the S&P 500 Index going back to 1995, based on real (inflation-adjusted) data.

 

via D. Short in Advisor's Perspective.

 

Is it a coincidence that the "tops" align?

Margin debt grew at a rate comparable to the market from 1995 to late summer of 2000 before soaring into the stratosphere. The two synchronized in their rate of contraction in early 2001. But with recovery after the Tech Crash, margin debt gradually returned to a growth rate closer to its former self in the second half of the 1990s rather than the more restrained real growth of the S&P 500. But by September of 2006, margin again went ballistic. It finally peaked in the summer of 2007, about three months before the market.

So, where are we now?

Note that NYSE only releases margin statistics after a six-week delay; so it is tough to trade off them directly.

Bill Gates: 40 Years in 83 Seconds

Bill Gates co-founded Microsoft, becoming the world's richest man.

For his second act, he is becoming world's greatest philanthropist.

Here is the letter he wrote to his employees on the 40th anniversary of Microsoft, last week.

 

Tomorrow is a special day: Microsoft's 40th anniversary.

Early on, Paul Allen and I set the goal of a computer on every desk and in every home. It was a bold idea and a lot of people thought we were out of our minds to imagine it was possible. It is amazing to think about how far computing has come since then, and we can all be proud of the role Microsoft played in that revolution.

Today though, I am thinking much more about Microsoft's future than its past. I believe computing will evolve faster in the next 10 years than it ever has before. We already live in a multi-platform world, and computing will become even more pervasive. We are nearing the point where computers and robots will be able to see, move, and interact naturally, unlocking many new applications and empowering people even more.

Under Satya's leadership, Microsoft is better positioned than ever to lead these advances. We have the resources to drive and solve tough problems. We are engaged in every facet of modern computing and have the deepest commitment to research in the industry. In my role as technical advisor to Satya, I get to join product reviews and am impressed by the vision and talent I see. The result is evident in products like Cortana, Skype Translator, and HoloLens -- and those are just a few of the many innovations that are on the way.

In the coming years, Microsoft has the opportunity to reach even more people and organizations around the world. Technology is still out of reach for many people, because it is complex or expensive, or they simply do not have access. So I hope you will think about what you can do to make the power of technology accessible to everyone, to connect people to each other, and make personal computing available everywhere even as the very notion of what a PC delivers makes its way into all devices.

We have accomplished a lot together during our first 40 years and empowered countless businesses and people to realize their full potential. But what matters most now is what we do next. Thank you for helping make Microsoft a fantastic company now and for decades to come.

 

via Twitter.

Here is a quick video that shows 40 years of Bill Gates and Microsoft (in 83 seconds).

 

 

via CNN/Money.

Thoughts from the Market Technicians Association Conference

I recently attended the Market Technicians Association's Annual Symposium in New York City.

It's always interesting for me to hang around with the leaders in our industry and to talk with other technical traders.

This picture is with Barry Ritholtz, the founder and Chief Investment Officer of RWM.

 

 

Barry did a great job on stage at the event. He also does a great job with his blog, The Big Picture.

Several people asked about the market sentiment expressed amongst the attendees. I think it's fair to say that most people were cautiously bullish. On one hand, that means that most people there recognize that the trend is up, and that the trend remains up until price proves otherwise.  On the other hand, most people were surprised that price has held up, this well, considering the political, economic, and social factors that can affect market prices.

On a different topic, algorithmic trading is still not mainstream. By that, I mean that currently neither algorithmic trading nor quantitative trading is part of the core practice or thought process of a group like this.

It reminds me of how most market participants considered technical analysis in the late 90s or early 2000's.

My sense is that these topics will grow in importance (to a group like the MTA) quickly as an increasing percentage of trades are based on this area of domain expertise and practice.

Stocks are the Most Expensive They've Ever Been

For what it is worth, the median stock in the S&P 500 is the most expensive it has even been.  Moreover, many valuation indicators are now at "the highest ever, except 2000". 

 

 

Perhaps when the economy is truly booming, that might make sense ... or be considered a good sign. 

At this point, it is more likely a good sign for short-sellers.

 

Traders understand that the prevailing trend has been up (and will remain that way, despite logic or argument, until price proves otherwise).

 

Related articles

What's Driving Performance During This Rally?

The Biggest Threat To The S&P 500 In The Next Month: "Biggest Buyer Of Stocks In 2015" Enters Blackout Period

Rising Bullish Optimism Reaching Extreme Levels

The S&P 500 Is Too Expensive Buy Nasdaq Instead, Goldman Recommends

Show Me The Money - How Big Have Sports Broadcast Rights Become?

March Madness is upon us.

In case you missed it, sports is big business.

Here is a chart showing the broadcast fees paid to various sports leagues.

 

via Financial Times.

Is the bubble going to burst?  The trend of the past 20 years suggests that it won’t.

Broadcasters have been locking in their costs through long-term deals. That also makes it harder for tech companies — such as Netflix, Google or Apple — to buy into the market.

Here Are Some Links For Your Weekend Reading

According to the President, the new three branches of government are ... me, myself, and I.

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• The Power of Checklists. (Art of Manliness)
• The Most Thought Provoking Articles of the Year. (Brain Pickings)
• The Secret Meanings Behind 40 Brand Logos. (Marketing Land)
• The Science of Misheard Lyrics. (New Yorker)
• Why We Love Back Rubs, Chili Peppers, and the Sex from “50 Shades”. (Salon)

 

Trading Links:

• Saudi Arabia 'Engineered' Oil Crisis: Says Dallas Fed Chief. (Money)
• A Few Things To Know About Technical Analysis. (Stock Charts)
• Meet The Man Who Wants To Build The ESPN Of Finance. (HuffPost)
• A Netflix for Private Flights: A Members-Only Airline. (Fast Company)
• AT&T Dumped by Dow. Time to Buy? History suggests it's worth a look. (Markets)

9 Out Of 10 Big Pharma Companies Spent More On Marketing Than On R&D

This speaks for itself.

 

via DadaViz.

Of course, sometimes it can be said better.

The NASDAQ Composite Index Closed over 5,000 for the First Time in 15 Years

The Nasdaq Composite Index closed over 5,000 this week for the first time in 15 years.

A lot has changed since then.

For example, only three of the top 10 companies in the index remain the same.

 

via NYTimes.

But, notice the change in market cap for those that remain.

The only thing that remains constant is change.