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 […]
Warning Signs from High Yield Credit and International Markets
April 17, 2012
It was just 90 days ago that we were commenting on the record levels of volatility and little progress investors had been subjected to in the second half of 2011. In our “Oh Trend…Where For Art Thou” comments published in December we stated: “Long periods of sideways volatility creates pent up frustration for investors. Once a trend emerges, the inevitable “missing the boat” mentality […]
Oh Trend..Where For Art Thou?
December 12, 2011
A Flat 200 Day Average for U.S. Equities The lack of a discernible trend can be seen in the 200 day moving average. The 200 day average is widely accepted as a good indication of longer term market trends, and is illustrated in the chart of the S&P 500 below. Notice the clear rising and falling slope, regardless of Bull […]