Looking for froth in the wrong places

In Subscribers only by Cam Hui

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 Trend Model is an asset ...
To access this content, you must be a subscriber.

U-S-A! U-S-A!

In Subscribers only by Cam Hui

Mid-week market update: Having reviewed sector rotation last week (see More evidence of an emerging reflationary rebound), it is time to apply the same analysis to countries and regions. First, let’s start with a primer of our analytic tool. Relative Rotation Graphs, or RRG charts, are a way of depicting the changes in leadership in different groups, such as sectors, ...
To access this content, you must be a subscriber.

Long live the reflation trade!

In Free by Cam Hui

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 Trend Model is an asset …

When does the market top out?

In Free by Cam Hui

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 Trend Model is an asset …

Two elections, two questions for investors

In Free by Cam Hui

In the past week, two key elections have been held that have important geopolitical, economic, and investment implications. First, remember this Time magazine cover? I indicated on February 6, 2017 that the cover may have marked Peak populism.     I suggested at the time to buy France and sell Germany as a pairs trade. That trade has certainly worked …

The miracle of Europe

In Free by Cam Hui

Here in Canada, we are observing the 100 year commemoration of the participation of Canadian troops in the Battle of Vimy Ridge. While the Canadian Corp achieved its objectives of capturing the ridge, it was a typical battle of the First World War that left enormous casualties for both sides.     After the horrific human carnage of the First …

Monetary Armageddon ahead?

In Free by Cam Hui

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 Trend Model is an asset …

Don’t relax yet, the week isn’t over

In Free by Cam Hui

Mid-week market update: Boy, was I wrong. Two weeks ago, I wrote Why the S&P 500 won’t get to 2400 (in this rally). Despite today’s market strength, stock prices may be restrained by a case of round number-itis as the Dow crosses the 21,000 mark and the SPX tests the 2,400 level. In addition, the market’s reaction to President Trump’s speech …

The Italian referendum = Next populist domino?

In Free by Cam Hui

Ian Bremmer of the Eurasia Group recently tweeted the following political calendar in Europe. After the surprising Trump win, the market is closely watching for electoral surprises. Next up is the Italian referendum on December 4, 2016, in which PM Matteo Renzi has asked for revisions to the constitution in order to break the endless cycle of deadlocked and changing …

Going on recession watch, but don’t panic!

In Free by Cam Hui

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 Trend Model is an asset …

Silver linings in Europe’s political dark clouds

In Free by Cam Hui

As the American elections approach their final denouement in two weeks, it’s time to look ahead to a number of political dark clouds forming in Europe. FT Alphaville¬†recently highlighted research from Barclay’s showing the collapse in support of establishment parties around the world.   The support for anti-establishment and protest parties and candidates have been on the rise – and …

If Deutsche = Lehman, then Greek banks = ?

In Free by Cam Hui

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 Trend Model is an asset …

Studies in market psychology: The Debate and Deutsche Bank

In Free by Cam Hui

Mid-week market update: From a trader`s perspective, this market had been jittery and mainly driven by two themes. The first was the resolution of the uncertainty over the presidential debate that occurred Monday night. The other is the uncertainty over the fate of Deutsche Bank as a symptom of the systemic risk posed by European financials. The market reactions to …

A second chance on Europe

In Free by Cam Hui

About three weeks ago, I wrote about opportunities in European equities (see Worried about US equities? Here’s an alternative!). I pointed out that stock prices in Europe were far cheaper than US, the fears about European integrity and financial system were overblown, and the market seemed to be ignoring signs of a growth recovery. Since then, the FTSE 100 has …

Brexit: Fantasy vs. reality

In Free by Cam Hui

I am seeing an unusual level of rising anxiety over the political implications of Brexit. Last week, Stratfor published a report entitled “Brexit: The First of Many Referendum Threats to the EU”, which detailed the threats of additional referendums to the future of Europe. Jim Rogers, writing in the Daily Reckoning, also painted a dire picture of the world after …

Worried about US equities? Here’s an alternative!

In Free by Cam Hui

I have a suggestion for value oriented investors who are uncomfortable with my market blow-off thesis for US equities (see How to get in on the ground floor of a market bubble and Get ready for the melt-up). What about buying Europe? Valuation metrics for European stocks are certainly cheaper. The SP 500 trades at a price to book ratio of 2.7 and …

Brexit panic: A gift from the market gods?

In Free by Cam Hui

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 research outlined in our post Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The Trend Model is an asset allocation …

Brexit: LTCM or Lehman?

In Free by Cam Hui

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 research outlined in our post Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The Trend Model is an asset allocation …

The Brexit Pandora’s Box

In Free by Cam Hui

For my (mainly) American friends, file this under “why you don’t understand Europe”: The Vietnam War was a war that scarred the national psyche and dramatically changed the tone of American foreign policy for a generation. If you visit the Vietnam Memorial in Washington DC today, you will find roughly 58,000 names of fallen soldiers from that period. Now imagine …

We are all helicopter pilots now

In Free by Cam Hui

In Ben Bernanke’s famous 2002¬†helicopter speech, he made the point that the Fed has numerous tools to fight deflation, even if interest rates was at the zero bound: The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By …