Froth everywhere!

Preface: Explaining our market timing models We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The...

Energy: Value opportunity, or value trap?

Callum Thomas recently highlighted an observation from BAML that the market cap of Apple (AAPL) is now larger than the entire energy sector. AAPL is now the largest stock in the index, but its weight at 4.5% is not especially extreme in the context of the historical experience. The fact that AAPL's market cap has eclipsed...

The 2017/18 melt-up: Then and now

Mid-week market update: The stock market is over-extended. I warned on the weekend about the market's nosebleed valuation (see Priced for perfection). The market's forward P/E ratio of 18.4 matched the levels last seen at the 2017/18 market melt-up.     But there are some crucial differences between the last melt-up episode and the one...

Demographics beyond the 2020s

I received some thoughtful feedback to my recent post (see The OK Boomer decade). In particular, one reader referred me to an article by Greg Ip of the WSJ regarding the demographic headwinds affecting the American labor force. The U.S. will run out of people to join the workforce. Indeed, this bright cyclical picture for...

A 2020 commodity review

Preface: Explaining our market timing models We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The...

Buy the cannons, sell the trumpets?

Mid-week market update: The financier Nathan Rothschild was said to have coined the phrase, “Buy on the sound of cannons, sell on the sound of trumpets”. After the New York market closed last night, the news flashed across the wire that Iran had launched missile strikes at Iraqi bases housing American and Coalition military personnel....

Fade the fear spike

Global stock markets opened the week with a risk-off tone. As the day went on, the New York market began in the red, but recovered to be positive for the day.     I wrote on the weekend that I still had a bullish tilt, but "the market action in the coming week will be...

Trading the market melt-up

Preface: Explaining our market timing models We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The...