Liz Ann Sonders @LizAnnSonders U.S. Recession Probability Model from @ConferenceBoard rose to 96% as of August (model shows probability U.S. enters recession within next 12 months)
Finally, a guy a year ago saying buy buy buy, especially high quality stocks.
He was right to buy, but he did not foresee the Great AI Surge making tech - again - the big winner. But still, my favorite 'high quality company' fund, COWZ, is up 13% over the past year. Not too shabby. I'm hoping we get the long period of high quality/value outperformance that he predicts, but I'm not betting heavily on that. Tech is just so powerful.
1/25 #TheGreatHeadFake: Why we’ll look back at this market correction & conclude that it was a huge head fake. Mark my words, we’re entering a multiyear bull market for forgotten growth+value stocks. Fundamentals to take centerstage. #Thread
1:29 PM · Oct 20, 2022
1/25 #TheGreatHeadFake: Why we’ll look back at this market correction & conclude that it was a huge head fake. Mark my words, we’re entering a multiyear bull market for forgotten growth+value stocks. Fundamentals to take centerstage. #Thread
that's where the "25" in the 75% hit rate comes in. So caveat emptor.
but to be fair, not even the brilliant bond market, which everyone says is way smarter than the stock market...completely and totally missed the surge in inflation and resultant hike in interest rates. Predicting these things is pretty much impossible.
wasn't a lot of that wrapped up in the Fed's repeated assertion that inflation would be "transitory"? They thought it was going to mitigate as pandemic related supply-chain bottlenecks cleared up. Inflation turned out to be more persistent than that, and few analysts or market watchers had reason to expect that. And if memory serves me, there were labor shortages and the great resignation, which drove prices up, too.
All of which were hard to foresee.
I think it is fair to say with all the PhDs at the Fed there would be a consensus that QE might not be such a good idea with plenty of embedded risks.
"Largely thanks to highly accommodative monetary policy, we went through unusually easy times in a number of important regards over a prolonged period, but that time is over." -@HowardMarksBook
“Americans now need $114,000 in annual income to afford the typical house in the US. This is up a massive 90% from $60,000/year of income required to buy a typical house in 2020.
To put this in perspective, the median American HOUSEHOLD makes $75,000/year. In other words, the median household income is now 52% BELOW the income needed to afford a typical home.
Mortgage rates have gone from 2.6% to 8.0% in the same time that home prices are up 30%+.
“Americans now need $114,000 in annual income to afford the typical house in the US. This is up a massive 90% from $60,000/year of income required to buy a typical house in 2020.
To put this in perspective, the median American HOUSEHOLD makes $75,000/year. In other words, the median household income is now 52% BELOW the income needed to afford a typical home.
Mortgage rates have gone from 2.6% to 8.0% in the same time that home prices are up 30%+.
Want to be able to afford a home in the US?
You now need to be in the six-figure club.”
this is valid, but should be added that the great majority of Americans have amazing deals on their homes - paying 3-4% on mortgages when inflation is MORE than that, and many have no mortgage at all. That's a giant wind behind their backs.
But it does seem likely that as this high-rate environment lasts, home prices should fall off their all-time high levels.
From a year ago, a good brave call from JPM on where we'd be on inflation. JPM predictred 3.2...we're at 3.7. Solid. We were at 7.7% when this call was made.
Carl Quintanilla @carlquintanilla JPMORGAN: We see signs that moderating inflation “is already underway and that this cooling will become more prominent over time. Overall, we think headline #CPI inflation cools .. to 6.8% in December and then to 3.2% by September ..”
Sold some lots of SOXS up 40% and TECS up 25%, with some proceeds to FAX with 13% yield. I believe geopolitical rest will calm down the 10 Year Treasury, and be temper global yields.
Sold some lots of SOXS up 40% and TECS up 25%, with some proceeds to FAX with 13% yield. I believe geopolitical rest will calm down the 10 Year Treasury, and be temper global yields.
Good job, Igy. You eked out a profit on an etf (SOXS) that has lost more than 67% year to date and on another one that lost almost as much.
When did you buy the FAX? Today? I bought more Microsoft this morning in advance of their earnings announcement tomorrow.
This post was edited 2 minutes after it was posted.
Reason provided:
fix errors inherent in those of us navigating multiple screens
One of my clients just called to ask me to do some liquidation. Usually a pretty good sign that the correction is toward its end.
Look at chart of Igy's cash cow: SOXS (3x tech short ETF). You see a top tends to form right about the levels (5/31, 6/5, 9/21, 9/26) we are at now, based on stock performance over the last several months. So yeah, probably rebounding from here....
This post was edited 17 minutes after it was posted.
I show FAX total return up .83% on Morningstar. I am up 2.25% on all my shares. I have been up as much as 20% when the Dollar and interest rates were lower. So highly correlated to moves there. In regards to SOXS currently up 22.53% on all shares, was up 30% on all, and as I said 40% on lots sold at market lows. If we get back above 4,300 I will add, also add if the market decline gets more sustained.
This post was edited 3 minutes after it was posted.
I show FAX total return up .83% on Morningstar. I am up 2.25% on all my shares. I have been up as much as 20% when the Dollar and interest rates were lower. So highly correlated to moves there. In regards to SOXS currently up 22.53% on all shares, was up 30% on all, and as I said 40% on lots sold at market lows. If we get back above 4,300 I will add, also add if the market decline gets more sustained.
today is ex-dividend day on FAX, but you probably know that. Shares bought today don't get the dividend payment for the quarter just ending.
One of my clients just called to ask me to do some liquidation. Usually a pretty good sign that the correction is toward its end.
Look at chart of Igy's cash cow: SOXS (3x tech short ETF). You see a top tends to form right about the levels (5/31, 6/5, 9/21, 9/26) we are at now, based on stock performance over the last several months. So yeah, probably rebounding from here....
I bought SOXS more on the belief that AI is just another fleeting market fad. I have taken about half of my proceeds from SOXS and TECS and plowed into EM bond CEFs. The other half of proceeds to money market. In that way managing the risk on the leveraged ETFs. Also, in 2024 I will likely convert EM Bond CEFs distributions to cash, rather than reinvest.
I show FAX total return up .83% on Morningstar. I am up 2.25% on all my shares. I have been up as much as 20% when the Dollar and interest rates were lower. So highly correlated to moves there. In regards to SOXS currently up 22.53% on all shares, was up 30% on all, and as I said 40% on lots sold at market lows. If we get back above 4,300 I will add, also add if the market decline gets more sustained.
today is ex-dividend day on FAX, but you probably know that. Shares bought today don't get the dividend payment for the quarter just ending.
Yes, I forgot to mention that. FAX distribution is the last day of the month, EMD the first day of the month. Both tend to trade down before distribution for reasons noted by you. Also, EM generally taking a hit on the Argentinian election.
This post was edited 1 minute after it was posted.
One of my clients just called to ask me to do some liquidation. Usually a pretty good sign that the correction is toward its end.
Agip - one client of yours asking to do some liquidation affects how you feel about the markets? What about all your other clients who did not want any liquidation of their assets? One specific clients trumps all the others?
One of my clients just called to ask me to do some liquidation. Usually a pretty good sign that the correction is toward its end.
Agip - one client of yours asking to do some liquidation affects how you feel about the markets? What about all your other clients who did not want any liquidation of their assets? One specific clients trumps all the others?
He's using it as a reverse indicator. One of the clients doing panic selling.
Yeah, most investors stay level headed, but when you start to see even an inkling of the panic driven stuff, you know it's capitulation time - when the weak hands are shaken out, selling subsides, and a rebound ensues.
Agip - one client of yours asking to do some liquidation affects how you feel about the markets? What about all your other clients who did not want any liquidation of their assets? One specific clients trumps all the others?
He's using it as a reverse indicator. One of the clients doing panic selling.
Yeah, most investors stay level headed, but when you start to see even an inkling of the panic driven stuff, you know it's capitulation time - when the weak hands are shaken out, selling subsides, and a rebound ensues.
yeah seattle is correct...i very rarely get calls from clients asking me to sell or just to talk about their fear of losses. When those calls do happen...it usually means millions of other investors have already sold and that the selling might be close to being complete. Which could set the stage for a rally. A contrary indicator.
Look at chart of Igy's cash cow: SOXS (3x tech short ETF). You see a top tends to form right about the levels (5/31, 6/5, 9/21, 9/26) we are at now, based on stock performance over the last several months. So yeah, probably rebounding from here....
I bought SOXS more on the belief that AI is just another fleeting market fad. I have taken about half of my proceeds from SOXS and TECS and plowed into EM bond CEFs. The other half of proceeds to money market. In that way managing the risk on the leveraged ETFs. Also, in 2024 I will likely convert EM Bond CEFs distributions to cash, rather than reinvest.
In regards to timing a buy in EM Bond CEFs, I tend to look at discount to NAV and yield. The distribution of income date is significant, but less so in my opinion. EMD is also ex-dividend yet is currently up 1.58% on the day. The other point, volume on these investments is low, as such I always use limit orders, and buy in smaller increments when they are trending down.