Trend Model signal summary Trend Model signal: Neutral Trading model: Bullish The Trend Model is an asset allocation model which applies trend following principles based on the inputs of global stock and commodity price. In essence, it seeks to answer the question, "Is the trend in the global economy expansion (bullish) or contraction (bearish)?" My inner...
There appears to be some glitch with the formatting of the previous post. Here it is again: In a recent post, I was relatively upbeat about the near term market outlook but warned that the next recession could be very ugly (see A major bear market in 2016?). To explain, I have found three possible...
In a recent post, I was relatively upbeat about the near term market outlook but warned that the next recession could be very ugly (see A major bear market in 2016?). To explain, I have found three possible time bombs that are set to go off at the next recession: The Fed's balance sheet; A...
As stock prices have recently weakened, I have received some comments regarding the start of a bear market in 2016. To put it into context, bear markets start for one of three major fundamental reasons: War or revolution leading to a permanent loss of capital (think Confederate war bonds, or German panzers smashing through French lines on...
Trend Model signal summary Trend Model signal: Neutral Trading model: Bullish The Trend Model is an asset allocation model which applies trend following principles based on the inputs of global stock and commodity price. In essence, it seeks to answer the question, "Is the trend in the global economy expansion (bullish) or contraction (bearish)?" My inner...
The study of emerging markets is a useful exercise in examining our assumptions about economies and markets because they sometimes operate by different rules than developed economies. As an example, Bloomberg reported today that the markets are freaking out over the firing of the finance minister: South African markets were thrown into turmoil after President Jacob...
I received a couple of comments to my last weekend post that it was somewhat lacking in a short-term trading outlook (see 2016: Time to get bearish and go "Zero Hedge"?). As my previous view that the US equity market would grind up until year-end hasn't worked out, it would be appropriate to update the...
Trend Model signal summary Trend Model signal: Neutral Trading model: Bullish The Trend Model is an asset allocation model which applies trend following principles based on the inputs of global stock and commodity price. In essence, it seeks to answer the question, "Is the trend in the global economy expansion (bullish) or contraction (bearish)?" My inner...
One of my tools in my market analysis toolbox is leadership analysis. In particular, I found that in bull phases, it pays to buy the market leaders (see Momentum + Bull market = Chocolate + Peanut butter). I was playing around with Relative Rotation Graphs, or RRG, the other day and what I found was a surprise....
This is another in a series of occasional posts on quantitative analysis. I am indebted to Josh Brown for pointing me to an article by Larry Swedroe, which discusses a study on demographics and real interest rates. While I found that I can derive significant insights from single variable studies like these, the world is...
Trend Model signal summary Trend Model signal: Neutral Trading model: Bullish The Trend Model is an asset allocation model which applies trend following principles based on the inputs of global stock and commodity price. In essence, it seeks to answer the question, "Is the trend in the global economy expansion (bullish) or contraction (bearish)?" My inner...
In Canada, we had our Thanksgiving a month ago (because the growing season is shorter and it makes no sense to have Thanksgiving in November when it's freezing in much of the country). Nevertheless, in the spirit of American Thanksgiving, I reflected on what to give thanks about. In light of the events in Paris...
It isn't often that we get to participate in buying stocks at the levels that Warren Buffett's Berkshire Hathaway bought them at. Most of the time, the public finds out in regulatory filings after the fact and the stocks have already moved up. Here is one exception that I discovered. In August 2013, Berkshire disclosed...
The standard practice among portfolio managers is to establish a rebalancing discipline for their portfolios. A typical process would involve the following steps: Determine the target asset mix, which could change depending on market conditions. Re-balance if: The asset mix weights moves more than a certain percentage, e.g. 10%, from the target weight; or Periodically,...
I haven't written much about China lately, but I continue to get questions. So I thought that it was time to summarize my big picture thoughts on China here. Riding a motorcycle at 100mph without a helmet There is much to cover so I will just go through the highlights. There is no question that...
The topic of inequality has been in the news in the wake of President Obama's State of the Union speech, which focused on that very issue. I refer readers to my previous post on this subject (see Inequality: Does it matter?) where I concluded that it is the equality of opportunity that matters, not so...
Policy in Europe has generally been done in the back rooms, with the theatre, e.g. PIIGS debt re-negotiations, done in the front rooms. Last year, the markets were panicked because they perceived the backroom elites had lost control of the situation and events were spiraling out of control. Today, it appears that the elites have...
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