Tag Archive: Lance Roberts

Seasonality: Buy Signal And Investing Outcomes

2024-10-22

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2024-10-22

Seasonality has long influenced stock market trends, offering insights into predictable cycles of strength and weakness throughout the year. Yale Hirsch, the creator of the Stock Trader’s Almanac, is one of the most well-known contributors to studying these patterns. His research has highlighted that certain periods of the year consistently present better opportunities for investors to generate returns, while other times warrant caution. The...

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Bastiat And The “Broken Window”

2024-10-18

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2024-10-18

In times of disaster and destruction, a common narrative often emerges that rebuilding efforts will lead to economic growth. The idea that repairing damage and replacing destroyed goods creates jobs that spur consumption and stimulate economic activity is tempting. However, as French economist Frédéric Bastiat explained in his famous “Broken Window Theory,” this reasoning is fundamentally flawed. Rather than generating net economic benefits,...

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Greed And How To Lose 100% Of Your Money

2024-10-15

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2024-10-15

In the movies, greed is a trait often exhibited by the rich and powerful as a means to an end. Of particular note is the famous quote from Michael Douglas in the 1987 movie classic “Wall Street:” “The point is, ladies and gentlemen, that greed, for lack of a better word, is good.

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GDP Report Continues To Defy Recession Forecasts

2024-10-11

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2024-10-11

The Bureau of Economic Analysis (BEA) recently released its second-quarter GDP report for 2024, showcasing a 2.96% growth rate. This number has sparked discussions among investors and analysts, particularly those predicting an imminent recession. There are certainly many supportive data points that have historically predicted recessionary downturns. The reversal of the yield curve inversion, the 6-month rate of change in the leading economic index,...

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How Howard Marks Thinks About Risk…And You Should Too

2024-10-08

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2024-10-08

When most people hear the word “risk,” they think about wild market swings, scary headlines, and losing money overnight, but Howard Marks, Co-Chairman and Co-Founder of Oaktree Capital Management, takes a different approach. In his new video series How to Think About Risk, Marks digs deep into what risk is and how investors should handle it. Spoiler alert: It’s not just about volatility. The CFA Institute recently summarized the video stream,...

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Election Outcome Presents Opportunity For Investors

2024-10-04

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2024-10-04

As the November 2024 election draws near, the election outcome will profoundly affect the financial markets. Whether Donald Trump or Kamala Harris wins the presidency, each administration will bring distinct policies creating investment opportunities and potential risks for investors.

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The “Everything Market” Could Last A While Longer

2024-10-01

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2024-10-01

We are currently in the “everything market.” It doesn’t matter what you have probably invested in; it is currently increasing in value. However, it isn’t likely for the reasons you think. A recent Marketwatch interview with the always bullish Jim Paulson got his reasoning for the rally. “It is this cocktail of ‘full support’ at the front end of a bull market which commonly has created an ‘Everything Market’ during the early part of a new bull....

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50 Basis Point Rate Cut – A Review And Outlook

2024-09-24

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2024-09-24

Last week, the Federal Reserve made a significant move by cutting its overnight lending rate by 50 basis points. This marks the first rate cut since 2020, signaling the Fed is aggressively supporting the economy amid a backdrop of softening economic data. For investors, understanding how similar rate cuts have historically impacted markets and which sectors tend to benefit is key to navigating the months ahead. In this post, we will explore the...

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S&P 500 – A Bullish And Bearish Analysis

2024-09-10

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2024-09-10

The S&P 500 index is a critical benchmark for the U.S. equity market, and its performance often dictates investor sentiment and decision-making. Between November 1, 2022, and September 6, 2024, the S&P 500 experienced a significant rally but not without volatility. Currently, investors have very mixed views about where markets are heading next as concerns of a recession linger or what changes to monetary policy will cause. However, as...

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Technological Advances Make Things Better – Or Does It?

2024-09-06

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2024-09-06

It certainly seems that technological advances make our lives better. Instead of writing a letter, stamping it, and mailing it (which was vastly more personal), we now send emails. Rather than driving to a local retailer or manufacturer, we order it online. Of course, we mustn’t dismiss the rise of social media, which connects us to everyone and everything more than ever. Economists and experts have long argued that technological advances drive...

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Risks Facing Bullish Investors As September Begins

2024-09-03

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2024-09-03

Since the end of the “Yen Carry Trade” correction in August, bullish positioning has returned with a vengeance, yet two key risks face investors as September begins. While bullish positioning and optimism are ingredients for a rising market, there is more to this story.

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Japanese Style Policies And The Future Of America

2024-08-30

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2024-08-30

In a recent discussion with Adam Taggart via Thoughtful Money, we quickly touched on the similarities between the U.S. and Japanese monetary policies around the 11-minute mark. However, that discussion warrants a deeper dive. As we will review, Japan has much to tell us about the future of the U.S. economically. Let’s start with the deficit. Much angst exists over the rise in interest rates. The concern is whether the government can continue to...

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Overbought Conditions Set Up Short-Term Correction

2024-08-27

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2024-08-27

As noted in this past weekend’s newsletter, following the “Yen Carry Trade” blowup just three weeks ago, the market has quickly reverted to more extreme short-term overbought conditions. Note: We wrote this article on Saturday, so all data and analysis is as of Friday’s market close. For example, three weeks ago, the growth sectors of the market were highly oversold, while the previous lagging defensive sectors were overbought. That was not...

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Red Flags In The Latest Retail Sales Report

2024-08-23

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2024-08-23

The latest retail sales report seems to have given Wall Street something to cheer about. Headlines touting resilience in consumer spending increased hopes of a “soft landing” boosting the stock market. However, as is often the case, the devil is in the details. We uncover a more troubling picture when we peel back the layers of this seemingly positive data. Seasonal adjustments, downward revisions, and rising delinquency rates on credit cards and...

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Market Decline Over As Investors Buy The Dip

2024-08-20

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2024-08-20

The market’s 8.5% decline during August sent shockwaves through the media and investors. The drop raised concerns about whether this was the start of a larger correction or a temporary pullback. However, a powerful reversal, driven by investor buying and corporate share repurchases, halted the decline, leading many to wonder if the worst is behind us. However, the picture becomes more nuanced as we examine the technical levels and broader market...

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Economic Growth Myth & Why Socialism Is Rising

2024-08-16

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2024-08-16

I was recently asked about the seemingly strong “economic growth” rate as the Federal Reserve prepares to start cutting rates. “If economic growth is so strong, as noted by the recent GDP report, then why would the Federal Reserve cut rates?” It’s a good question that got me thinking about the trend of economic growth, the debt, and where we will likely be. Since the end of the financial crisis, economists, analysts, and the Federal...

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Are Mega-Caps About To Make A Mega-Comeback?

2024-08-13

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2024-08-13

Are the “Mega-Cap” stocks dead? Maybe. But there are four reasons why they could be staged for a comeback. The recent market correction from the July peak certainly got investors’ attention and rattled the more extreme complacency. As we noted previously: “While there have certainly been more extended periods in the market without a 2% decline, it is essential to remember that low volatility represents a high “complacency” with investors. In...

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UBI – Tried, Tested And Failed As Expected

2024-08-09

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2024-08-09

A Universal Basic Income (UBI) sounds great in theory. According to a previous study by the Roosevelt Institute, it could permanently increase the U.S. economy by trillions of dollars. While such socialistic policies sound great in theory, history, and data, they aren’t the economic saviors they are touted to be. What Is A Universal Basic Income (UBI) To understand why the theory of universal basic income (UBI) is heavily flawed, we need to...

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Yen Carry Trade Blows Up Sparking Global Sell-Off

2024-08-06

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2024-08-06

On Monday morning, investors woke up to plunging stock markets as the “Yen Carry Trade” blew up. While media headlines suggested the sell-off was due to fears of a recession, slowing employment growth, or fears over Israel and Iran, such is not the case.

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The Sahm Rule, Employment, And Recession Indicators

2024-08-02

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2024-08-02

Economist Claudia Sahm developed the “Sahm Rule,” which states that the economy is in recession when the unemployment rate’s three-month average is a half percentage point above its 12-month low. As shown, the latest employment report has triggered that indicator. So, does this mean a recession is imminent? Maybe. However, we can now add this indicator to the long list of other recessionary indicators, also flashing warning signs. As...

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