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

Market Could be Reflecting a “Buying Climax”

A Morgan Stanley strategist is seeing signs that the stock market’s current momentum could be waning, according to a recent article in The Wall Street Journal. According to equity strategist Michael Wilson, the article says, there is evidence of a “buying climax” that could result in a dip over the weeks ahead. “Technical sell signals,” says WSJ, “haven’t proved terribly useful to investors this year as the stock market has gone nowhere but up. Even… Read More

Insights on Increasing Concerns Regarding Quant Funds

A recent article in Institutional Investor recalls the “quant bloodbath of August 2007” and offers insights regarding if and how the increased popularity of these strategies and the associated rise in leverage may be increasing the risk of another “downfall.” The article offers details regarding the 2007 calamity, when “some of the biggest and smartest hedge funds in the world suddenly tumbled in tandem, as their algorithmic trading systems went hay wire.” The reckoning, the… Read More

Hulbert: Value vs. Growth Valuation Spread Widest Since 2000

Earlier this month, price spread between value and growth stocks was the largest it has been since 2000, writes Mark Hulbert in a recent MarketWatch article. Hulbert offers data from Columbia University finance professor Kent Daniel showing that the average large-cap value stock’s price-book ratio is “barely half that of the average among large-cap growth stocks. Among small-cap stocks, value is even cheaper relative to growth.” The only time value has been relatively cheaper, according… Read More