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[ September 29, 2016 | Author: Admin | Views: 55518 | Weather: | Mood: normal]

People don’t have a good intuitive sense of how to weigh new information in light of what they already know. They tend to overate it. – Nate Silver, “The Signal and the Noise: Why So Many Predictions Fail- But Some Don’t” As investors, we hunger for an inside scoop on what the market will do based on an event, real or imagined, that is being considered (for example, Brexit, the Orlando shooting, the U.S. presidential election, etc.). This hunger is being fed by the emergence of a 24/7 news culture that seeks to identify, examine and report each and every possibility of what the outcome will (might) be. This explosion of information too often gets interpreted as knowledge or wisdom but most often, in reality, it is just a piece of data that can be placed with other pieces of data to be considered in arriving at knowledge or wisdom. … Continue reading

[ September 29, 2016 | Author: Admin | Views: 80936 | Weather: | Mood: normal]

Stocks took a breather following last week’s big gains, giving everyone a chance to rest and opine on the future of the market. Associated Press/Richard Drew The S&P 500 ticked up 0.1% to 2,051.60, while the Dow Jones Industrial Average advanced 21.57 points, or 0.1%, to 17,623.87. The Nasdaq Composite rose 0.3% to 4,808.87. BlackRock’s Richard Turnill argues that stocks have room to run: Market segments leading the rally still look cheap. Despite the stampede into value, global value stocks trade at around a 35% discount to the broader market, BlackRock analysis shows. This compares with an average 20% discount over the last decade. A weaker U.S. dollar, following the Feds more tempered rate-rise outlook, should help support EM and other risk assets. Many currencies have attractive values after multi-year declines. Best Diversified Bank Stocks To Buy Right Now: J.B. Hunt Transport Services Inc.(JBHT) J.B. Hunt Transport Services, Inc., together … Continue reading

[ September 29, 2016 | Author: Admin | Views: 34990 | Weather: | Mood: normal]

Shares of oil stocks plunged again as the price of West Texas Intermediate wiped out nearly half of its late-January rebound. Sluggish demand growth and stubbornly high supply has had investors whipsawed for months. In all the confusion, it is difficult not to look at the long-term picture and be positive on oil and shares of energy companies. The dramatic cut in the North American rig count has to eventually curtail supply. Even on more uncertain forecasts, China and India are both expected to grow their economies by nearly 7% this year with higher energy demand in tow. So far, Mr. Market has made a fool of the long-term perspective. Oil prices have fallen consistently since mid-2014 and more investors throw in the towel every day. The argument is to buy when there’s blood in the streets — but that’s not so easy to do when you’re already bleeding. Top … Continue reading

[ September 29, 2016 | Author: Admin | Views: 24007 | Weather: | Mood: normal]

Ask any political junkie, and they’ll tell you that the 2016 presidential campaign has been one of the strangest they’ve ever experienced. The rise of billionaire/reality TV star Donald Trump and Vermont Senator Bernie Sanders, the wild and woolly TV debates, and how wrong the pundits have been at predicting anything has been unprecedented. See Also: How the Presidential Election Will Affect the Stock Market But if we set aside the drama, we may discover that the most important thing we can learn from this election has nothing to do with the candidates. Instead, the most important takeaways are how the two mega-forces of globalization and demographics have changed our country and the influence they will have for years to come. Investors would be wise to pay attention. We’re Living In A Global Village First let’s look at globalization. We’ve heard a lot of talk about trade, trade agreements and … Continue reading

[ September 28, 2016 | Author: Admin | Views: 24870 | Weather: | Mood: normal]

The value and momentum factors have earned high praise in recent years as complementary sources of risk premia for designing and managing equity portfolios. AQR’s widely cited paper “Value and Momentum Everywhere” a few years back helped popularize the idea, pointing to applications in equities and beyond. There’s no shortage of support from the wider world of investment management. Earlier this week, for instance, Jack Vogel at Alpha Architect outlined “Why Investors Should Combine Value and Momentum.” Not surprisingly, there are several investment funds focused on the strategy, including the recently launched Cambria Value and Momentum ETF (VAMO). [Related -5 Popular Stocks You Need to Consider Selling Now] The rationale for a value-momentum mix can be summarized by reviewing the historical results. Consider rolling five-year annualized returns (a time window used in AQR’s paper), which captures a fair amount of mean reversion. The chart below hints at the possibilities from … Continue reading