“The Fed is Clueless” says Bob Rodriguez

A recent article in Advisor Perspectives offers highlights of an interview with Robert Rodriguez, award-winning fund manager and former managing partner at Los-Angeles-based asset manager FPA. Here is a summary of his comments: “Monetary policy has gone from the ridiculous to the absurd. The Fed, in my opinion, is clueless and is driven by theories with little basis in reality.” He believes that the central bank has been “consistently on the wrong side of economic… Read More

Drunkenmiller and Warsh: Perspective on Fed Tightening

In an article for The Wall Street Journal, co-authors Stanley Druckenmiller (chairman and CEO of Duquesne Family Office LLC) and former Federal Reserve Board member Kevin Warsh argue that the Fed should suspend its “double-barreled blitz of higher interest rates and tighten liquidity.” “The Fed created quantitative easing as a novel crisis-response tool a decade ago,” the article explains. “It bought assets from the public and stocked them away for safekeeping. Market participants understood the… Read More

How the Fed’s Rate Hikes Affect Investors

A recent Vanguard blog addresses the issue of the Fed’s ongoing rate hike program and how it will affect investors. Here are highlights: “Higher yields on cash are good news for savers”—the article notes that since the Fed started raising rates in December 2015, investors have moved more than $60 billion into money market funds, and those inflows could rise with further rate hikes. Mixed outlook for bonds—”Bond investors might cringe at our outlook for… Read More

Paul Tudor Jones Sees Year-End Rally Spoiled by Fed

In an interview last month with CNBC, famed hedge fund manager Paul Tudor Jones predicted a strong year-end market rally but argued that the Fed’s continued rate hike campaign will lead to a downturn. This according to an article in Chief Investment Officer. “I think this is going to end with a lot higher prices forcing the Fed to shut it off,” said Jones. While he doesn’t predict a stock market crash (like he did… Read More

Jeffrey Gundlach’s Market Worries

 DoubleLine Capital CEO Jeffrey Gundlach, who “sounded alarms about housing in 2006” doesn’t see any disasters in the offing, according to a recent article in Barron’s. “But that’s no reason to relax,” the article adds. The article outlines comments from an interview with the celebrated bond-fund manager. Here are some highlights: “Periodically,” says Gundlach, “the world is afflicted by mass psychosis,” alluding to the subprime mortgage crisis and the dot com bubble. He cites the cryptocurrency… Read More

Ray Dalio Says Market Surge Ahead

 At the recent World Economic Forum in Davos, Switzerland, billionaire Ray Dalio told CNBC that the coming tax cut could lead to big gains for the U.S. stock market. “We are in a Goldilocks period right now,” said the Bridgewater CEO. “Inflation isn’t a problem. Growth is good,” he said, predicting a “market blow off” rally fueled by cash from banks, corporations and investors. “There is a lot of cash on the sidelines,” he added. “If… Read More

The Effect of Quantitative Easing on Investment Cycles

By Jack Forehand (@practicalquant) —  “Hindsight gives us the illusion that the world makes sense, even when it doesn’t make sense” — Daniel Kahneman This time is different. If there is one phrase in investing that I have seen consistently lead to bad outcomes, that is it. It is what you heard over and over again in 1999, when investors felt that we were in a new world and the rules of valuation that held up… Read More

Jeffrey Gundlach Says S&P 500 Will be Down in 2018

Billionaire bond manager Jeffrey Gundlach says the S&P 500 will be down at the end of this year, and doubts the long-term value of bitcoin. This according to a recent Bloomberg article. During his annual “Just Markets” webcast earlier this month, the chief investment officer of DoubleLine Capital argued, “All recession indicators are flashing no recession, which means it’s priced in. This is why I say S&P 500 [will end] down after a pretty decent… Read More

Schwab Chief Strategist Warns of Market Headwinds in 2018

In a recent CNBC interview, Charles Schwab chief strategist Liz Ann Sonders warns investors to expect more headwinds given that the economy and the markets are in the late stages of the cycle—and cites increases in both capital spending and productivity as indicators. “That doesn’t mean we’re at an imminent end,” Sonders explains, “but it’s later-cycle-type behavior.” She adds that tighter monetary policy and the Fed’s “unprecedented” shrinking of its balance sheet as factors that… Read More

Bill Gross Likens Market to Retirement Community

In an interview with CNBC earlier this month, Janus Henderson portfolio manager Bill Gross said that the stock market’s “halcyon days are over” as central banks around the world take away the high levels of stimulus they’ve provided over the past ten years. “I’m not supporting a bear market,” Gross said in the interview, “but sort of a market where you move into an old-age retirement community where the pace of activity and prices behave… Read More