Gaps In Thinking
February 4, 2013
For investors, 2012 was a year of endless waiting; waiting for a resolution to the U.S. fiscal cliff, progress on the European debt crisis, results of a polarizing U.S. election, a Chinese leadership transition, resolution to the Bush tax cut extensions, etc..etc..etc. Any one of these issues alone possessed enough economic significance to bring investor confidence to a halt, and […]
Searching for Santa
December 27, 2012
It seems every year around this time we hear about the Santa Claus Rally, a period of time when markets supposedly provide a bullish backdrop for stock investors. With just a few days left in the year I thought it might be interesting to test the Santa Claus rally assumption. Examining data over the past two decades shows the last […]
Surfing with Sharks
October 25, 2012
Original Commentary: December 14, 2007 Just north of Santa Cruz, California up Highway 1 there is a hidden gem for surfers. It’s an isolated beach with some nice rights (waves that break from right to left). It’s a steep wave that wraps into a bowl, breaking hard and hollow on big days. “Four Mile”, (creatively named due to it’s proximity […]
An Alternative View on High Yield Risk
September 26, 2012
The Federal Reserve announced the latest round of Quantitative Easing (QE III) last week. The consensus view is that this latest round of $85 Billion per-month bond buying will send all liquid assets higher. Investors responded by pouring fresh capital into High Yield Bonds driving prices to new highs on the year. In a climate where the Fed is promising […]
Credit Markets: What No One Is Talking About In August
August 30, 2012
Interest Rates Creep Higher in August Declining interest rates means rising bond prices. For more than two decades fixed income investors have benefited from a declining trend in interest rates. For the past several years that decline in rates has been driven primarily by Fed policy intervention in the form of economic stimulus. In fact since the fourth quarter of […]
Deja Vu All Over Again: Opportunities in Long-Short
May 30, 2012
I think it's safe to assume that when Yogi Berra uttered his famous statement "It's like Deja Vu all over again" he was not referring to the effects of fed intervention on financial markets. But he couldn't have been more right. Over the last 3 years markets have been subjected to several rounds of Federal Bank intervention, all in an […]