Investors Shouldn’t be Fooled by Market Calm

 Now isn’t the time for investors to get comfortable, says a recent article in The Wall Street Journal. The underlying economic environment, it says, is “muddier” than it was in January, with some survey data suggesting that growth may have peaked while inflation is “likely to pick up.” The article suggests that investors should learn from the past market events, specifically the “credit correlation blowup of 2005” when auto makers Ford and General Motors were downgraded… Read More

Cliff Asness Hedges Regarding Hedge Funds

In a recent Bloomberg article, AQR’s Cliff Asness argues that the opinion pendulum on hedge funds has swung too far, that “all you read about today is that hedge funds are a failure and investors are fleeing.” This overreaction, he explains, comes in part from; (1) a failure to understand how to measure hedge-fund returns, and the fact that (2) the last few years have been a “mild disappointment and they have given critics enough… Read More

Ritholtz on Market Trends

In a recent interview with NYU professor and research firm L2 founder Scott Galloway, Bloomberg columnist Barry Ritholtz shares insights about investing, current market trends and what may lie ahead. Here are some highlights: Ritholtz points out that 2017 was an unusual year for the market given the extremely low level of volatility. The recent correction he says, is normal. “Risk is a two-sided coin,” he argues. “If you want potential upside, you must be… Read More

Leon Cooperman Talks Market Movements

In a CNBC interview held last week, billionaire Leon Cooperman shared insights regarding recent market trends and influences. The billionaire founder of Omega Advisors made the following points: FAANG stocks, which he says represent about 10% of his portfolio, have sound valuations based on expected earnings. The biggest threat, argues Cooperman, is the U.S. government, which wants to “pick their pockets.” Inflation, Cooperman contends, is a “plus for common stocks” since higher costs become incorporated… 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

Fear-of-Missing-Out is Pervasive Among Investors

According to a recent Bloomberg article, the fear-of-missing-out (FOMO) factor looms large as the S&P 500 “got off to its best start to a year since 1999,” adding, “It’s risen above worries about North Korea’s ‘Rocket Man’ and the unpredictable U.S. president who revels in provoking him.” Debating the validity of such fears, the article says, “there’s little debate that there will be something legitimate to miss out on in the stock market in the… Read More

Where Are the U.S. Market Bears?

As the bull market trudges toward its ninth year, “daring, animal spirits and greed have supplanted fear,” and “bears that once roared at any sign of trouble now seldom make a peep.” This according to a recent article in Bloomberg. Citing findings from a recent survey by the National Association of Active Investment Managers, the article reports that “even the most pessimistic mutual fund overseers are fully invested in stocks,” adding that equity exposure rose to… Read More

Market Movements are Factor-Led, Not a Tech Rotation

The recently touted theory that tech was entering a rotation as stock pickers began “piling into companies set to benefit from U.S. tax cuts” has been challenged by some, according to a recent article in Bloomberg. “A few heavy hitters are dumping factor positions that incidentally hurt chipmakers and software companies,” the article argues, “and once they’re done, the rally will resume.” The article asserts that while the recent market movement seemed to be tax-related,… Read More

Is Value Investing Dead?

Reporting on a Goldman Sachs study published a few months ago, a recent article from the Wharton School addresses the underperformance of value compared to growth strategies. The Sachs report, it says, claims that “value investors are seeing the longest dry spell since the Great Depression, and future returns will likely be lower than the historical average.” But the firm also acknowledges that assessing whether value strategies are in trouble depends on how one views… Read More

This Bull Market Isn’t Happy

The current bull market’s backdrop of low volatility, high valuations, and tightening monetary policy are worrisome factors for some in the investment community, according to a recent article in The New York Times. Jim Paulsen, a market strategist for the Leuthold Group, describes the above factors as “scary,” adding that most questions he hears from clients and audiences at speaking engagements relate to what he believes will finally trigger a major correction. “No one ever… Read More