Summary Margins and Comparable Sales, Total Sales have been in decline and getting worse. Company specific issues as BBBY is doing much better. Company bought back shares while performance decline was accelerating. CEO leaving and management fighting activist through poison pill. Stock could tank if guidance misses. … [Read more...]
Newsletter – September 2016
Everyone is jumping on the ETF bandwagon as $63.6 billion flowed into the product YTD versus $144 billion outflow from equity mutual funds. Fidelity launched six new ETFs with “smart beta” and large cap filling the headlines. For smart beta fans I recommend a smart piece from James Montier (click here) who makes the case that: Smart Beta = Dumb Beta + Smart Marketing. Now … [Read more...]
Newsletter – August 2016
This month I’d like to touch on some of the problems that passive investing and ETFs have and their effect on the market. As we will see, the problem with ETFs is that it has become a huge business and rather than be constructed for investment purposes, it is constructed so that it can sell regardless of the foundation which it was built upon. Tim du Toit sent me the … [Read more...]
Virtue Signaling, or … Why Clinton is in Trouble
If you’ve ever played a team sport, you’ve experienced a game that was a mismatch on paper. Now usually that game goes according to form. The better team scores early and often, and the inferior team doesn’t sniff a win. But sometimes the game gets tight. Sometimes the better team makes a few unforced errors, and the inferior team capitalizes. Sometimes there’s a lucky bounce … [Read more...]
Newsletter – July 2016
Yes, I got it wrong. For six months I was convinced that the market was going lower. And there was no way in hell that I was going to let the market take my money. So I executed the plan I had designed a few years ago. I reduced exposure via shorting overvalued hyped stocks with poor fundamentals and raised cash. I expected the return from the hyped shorts would more than … [Read more...]
Six Ways NIRP Is Economically Negative
If you have any doubt that we’ve wandered into a new and unexplored economic universe, consider this number: $12.6 trillion. That’s the face value of government and corporate bonds currently trading worldwide with nominal yields below zero. Note that word trading. These bonds are in fact trading. Liquidity has not dried up. An active market exists for negative-yield bonds. … [Read more...]
Newsletter – June 2016
Over the past month, everyone and their mother had an opinion on Brexit. Bloomberg managed to put a lot of food for thought in the image below: I suggest you check out Mauldin’s post (click here) for an excellent analysis of what has changed and the realization by the EU leaders that in order to keep things together they will have to try a new approach. We will have to … [Read more...]
