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Modern Day Distribution?

There is an interesting pattern developing in the stock market these days. And while this pattern may be rooted in a very old-school concept – which may or may not apply to today’s fast-moving, algo-driven markets – it is worth noting all the same because the implications are worrisome.

In the old days, you know, when humans made the decisions when to buy and sell stocks, analysts could study the order flow and determine whether the big boys were accumulating stocks for their portfolios or slowly distributing them. The idea here was simple. When stocks were under accumulation, there was consistent buying in the market as institutions slowly added to positions over time. And conversely, when the big boys were trying to lighten up on their equity holdings, the market displayed a pattern of slow and steady selling.

In essence, during a distribution phase the market would struggle to make any headway and all rallies were sold into. You see, when you were a pension fund manager with a boatload of stock to unload, you didn’t do it all at once. No, you slowly “distributed” the positions to eager buyers over time so as to not tip your hand.

Typically, the tell-tale sign of a distribution phase would be obvious in the breadth and volume statistics. And those seeing the glass as at least half-full these days remind us that the Advance/Decline Lines and the Up-to-Down Volume indicators remain in good shape. And because of this our bovine buddies suggest that all is well and it is only a matter of time before stocks begin movin’ on up again.

But…

Read the rest of the report…

 

David Moenning

Direct: 303-670-9761

www.HeritageCapitalResearch.com

Check Out the NEW Website!

David Moenning is Mr. Moenning is President of Heritage Capital Research, a privately owned, investment research firm. Heritage focuses on active risk management and an “own the best and ignore the rest” equity selection strategy.

For up to the minute updates on the market’s driving forces, Follow Me on Twitter: @StateDave (Twitter is the new Ticker Tape)

Positions in stocks mentioned: none


The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security or Heritage Capital program. No part of this material is intended as an investment recommendation. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any of HCM’s programs. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that investment objectives outlined will actually come to pass. Investors should consult an Investment Professional before investing in any investment program. Neither Mr. Moenning or Heritage Capital Management nor any of their employees shall have any liability for any loss sustained by anyone who has relied on the information contained herein. Mr. Moenning and employees of HCM may at times have positions in the securities referred to and may make purchases or sales of these securities while this publication is in circulation. The analysis contained is based on both technical and fundamental research. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

 

Gayed and Bilello’s 2015 NAAIM Wagner Award Paper Noticed by Popular Financial Media

The first place winner in the 2015 NAAIM Wagner Award competition “Lumber:  Worth Its Weight in Gold – Offense and Defense in Active Portfolio Management.” by Charlie Bilello and Michael Gayed has generated multiple mentions in the popular financial press.

Here are some the article links:

USA Today: http://www.usatoday.com/story/money/2015/04/17/three-investment-themes-from-trees/25886517/

WSJ-Marketwatch: http://www.marketwatch.com/story/lumber-and-gold-send-a-warning-to-stock-market-bulls-2015-04-20

Barrons: http://m.barrons.com/articles/gold-lumber-and-their-impact-on-stocks-1429566576?mobile=y

Additionally, Charlie has posted additional information on his blog:

http://pensionpartners.com/blog/?p=1404

 

Mapping the Strategy Universe: A view into how professional strategists classify active strategies

NAAIM Member and 2014 NAAIM Wagner Award winner Dave Walton published an article in this week’s Proactive Advisor magazine.

In his article, Mapping the Strategy Universe: A view into how professional strategists classify active strategies, Walton attempts to chart this world through a simple classification scheme. To do that, he discusses actively managed strategies through the lens of four vectors: time frame, asset classes, systematic factors, and use of discretion. Through a general look at active strategy characteristics, advisors will get a glimpse into performance drivers and be able to enhance their understanding for effectively matching strategies to their clients.

Read the article – Page 4 (ereader)

Read the article- Page 4 (pdf)

The Cycles Say We Should…

Up until Friday morning at about 3:00 am Eastern Time, the U.S. stock market appeared poised to make a break for the border. More specifically, it looked like traders had put the worries about the earnings season, Greece, the economic data, and the Fed behind them. In fact, it looked like the historical cycle projections were about to play out – and that dear readers, would have been a good thing.

However, immediately following the announcement that Chinese officials had (a) put new limits on margin trading and (b) allowed for more short selling on the exchanges, traders decided it was time, once again, to go the other way.

Never mind that the S&P 500 was just 12 points from the Promised Land. Never mind that the venerable blue chip index had managed to trade above its 5-day moving average for 9 consecutive days. Nope, when Chinese officials basically announced that things were getting out of hand in their stock markets (the Shanghai Composite Index was up more than 14% in April alone and had more than doubled in the preceding 12 months) well, traders and their computers took the hint.

Just like that, stocks reversed course and markets around the world shed a percent or two in value. And don’t look now, but it appears that the S&P 500 has now embarked on the 11th change of direction so far in 2015 – and the 13th since December 1st. The word you’re looking for here is, choppy.

Where To From Here?

So, with traders once again fretting about anything and everything, the question of the day would appear to be: Where do we go from here?

While I do not believe in trying to predict what Ms. Market (or perhaps more accurately, the algos at the likes of Goldman Sachs, Citadel, and Virtu) is/are going to do next, I have on multiple occasions detailed the eerie accuracy of what we call the “cycle composite.” So, we thought it would be a good idea to check in with the historical cycles for some guidance.

What Do The Cycles Say?

To refresh your memory, the “cycle composite” mashes together three historical cycles (the 1-year seasonal cycle, the 4-year Presidential cycle, and the 10-year Decennial cycle) to create a single composite forecast. And as long-time readers know, it is simply amazing how often this forecast is dead on.

Exhibit A is the chart below. The red dashed line represents the cycle composite’s forecast going back to 2010 and the blue line represents the actual S&P 500.

Read the rest of the report…

 

David Moenning

Direct: 303-670-9761

www.HeritageCapitalResearch.com

David Moenning is Mr. Moenning is President of Heritage Capital Research, a privately owned, investment research firm. Heritage focuses on active risk management and an “own the best and ignore the rest” equity selection strategy.

For up to the minute updates on the market’s driving forces, Follow Me on Twitter: @StateDave (Twitter is the new Ticker Tape)

Positions in stocks mentioned: none


The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security or Heritage Capital program. No part of this material is intended as an investment recommendation. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any of HCM’s programs. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that investment objectives outlined will actually come to pass. Investors should consult an Investment Professional before investing in any investment program. Neither Mr. Moenning or Heritage Capital Management nor any of their employees shall have any liability for any loss sustained by anyone who has relied on the information contained herein. Mr. Moenning and employees of HCM may at times have positions in the securities referred to and may make purchases or sales of these securities while this publication is in circulation. The analysis contained is based on both technical and fundamental research. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

 

The Speech at Lost Tree Club

“I’m not predicting a crash, I’m just saying the risk reward of going early (Fed raising rates) is better than going late.”

– Stan Druckenmiller

I spent 45 minutes this morning watching the Bloomberg interview with Stan Druckenmiller. I had a number of other things to share with you today, gathered over the course of the week, but they have been moved to the backseat. Put Drunkenmiller’s comments in the important category. Often gruff, I enjoy his clear and candid way.

Outperforming Warren Buffett and most everyone else, Stan’s track record is reported to be 30% per year for 30 years (with never a down year). Let’s just say we should be interested in what he has to say.

I share my notes from the interview below but I encourage you to find some down time, grab a coffee, and watch the first 40 minutes of the interview. Additionally, you’ll see that the interview references a private presentation Stan made in January at a Ken Langone (Home Depot founder and frequent CNBC guest) sponsored event. Someone recorded the presentation and titled it “The Speech at the Lost Tree Club”. It is worth the read. You’ll find the link below.

You and I are in a tough business. It is based on probabilities and involves imperfection. The mismatch between customer expectations and practical reality is challenging. Art Cashin said, “That to survive 50 years in this business, you learn that the first thing you do when you enter a room is look for the exit sign.” It is with this thinking, along with Drunkenmiller’s material, that I also share a great (short) piece on investing and risk from Ned Davis. Another grateful nod to NDR for allowing me to share it with you.

I hope you find the material helpful.

Read the rest of the report…

 

Steve Blumenthal

Founder & CEO CMG

www.CMGWealth.com

Stephen Blumenthal founded CMG in 1992. He is CEO, Chief Investment Officer and portfolio manager at Capital Management Group, Inc. where he manages equity and tactical investment portfolios. He is a frequent speaker and writer on investment strategies and has been featured in various media sources including the Wall Street Journal, Barron’s, Investor’s Business Daily, Pensions & Investments Magazine, Investment News, RIA Biz and Smart Money. He has been a guest on CNBC, Wall Street Journal Live, and Bloomberg. Mr. Blumenthal is a frequent speaker at industry conferences (NAPFA, IMCA, Index Universe, Opal Financial Group Indexing & ETF Summit and NAAIM) and is author of CMG’s popular investment research commentary. With 30 years of investment management and industry experience, prior to founding CMG, Mr. Blumenthal worked for Merrill Lynch Institutional, Merrill Lynch Retail and Prudential Securities.

Mr. Blumenthal graduated with a Bachelor of Science degree in Accounting from Pennsylvania State University. He is married, has three children and is active in his community coaching youth soccer.

Bears Having Their Day

Not even half a day of weakness and talk of the big C is out. The dreaded correction! It’s amazing that after a 73 month secular bull market, it’s still the most hated and disavowed bull ever. Yes, it’s now been 42 months since the last 10% correction, but markets don’t fall just because of age. Corrections occur to repair breaks and right now, there aren’t enough things broken to warrant a full fledged correction.

The most glaring concern is that the Dow Industrials continue to divergence from the Dow Transports and the Dow Utilities are even weaker. Coupled with sentiment, it makes the short-term murky as I have written about lately. Before you jump on the bears’ bandwagon, we have seen this picture before and it doesn’t end well for the bears. Weakness to the lower end of the trading range continues to be a buying opportunity until proven otherwise.

Don’t ignore the recent strength in banks, consumer discretionary and my very contrarian play in energy going forward. That’s not the kind of leadership you typically see if the stock market was in real trouble.

Read the Rest of the Report

Paul Schatz

Paul Schatz is President and Chief Investment Officer of Heritage Capital, LLC, in Woodbridge, CT. and a Managing Partner at Numetrix Capital, an investment research firm focused on multi-manager, multi-strategy portfolio solutions.


The opinions and forecasts expressed herein are those of Mr. Paul Schatz and may not actually come to pass. Mr. Schatz’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report is for informational purposes only. No part of the material presented in this report is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

Paul Schatz, an advisor representative of CONCERT Wealth Management Inc. (CONCERT), is founder of Heritage Capital LLC, a legal business entity(Heritage). Advisory services are offered through CONCERT Wealth Management, Inc., an SEC registered investment advisor. For a complete description of investment risks, fees and services review the CONCERT firm brochure (ADV Part 2) which is available from your Investment Representative or by contacting Heritage or CONCERT.

Heritage Capital a state-registered investment adviser. Heritage also serves as a sub-advisor to other investment advisory firms. Neither Heritage or CONCERT is registered as a broker-dealer.

Employees and affiliates of Heritage may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or Heritage has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.

2015 NAAIM Wagner Award Winners Bilello and Gayed Featured in USA Today

2015 NAAIM Wagner Award winners Charlie Bilello and Michael Gayed of Pension Partners are featured in an article in USA Today.  The article discusses three investment themes that involve trees.  Gayed and Bilello award-winning paper is entitled “Lumber:  Worth Its Weight in Gold – Offense and Defense in Active Portfolio Management. ”

In their paper, Bilello and Gayed use Lumber and Gold as a signal to help answer the most critical question for active asset managers: when to take more risk (“play offense”) and when to take less risk (“play defense”) in an investment portfolio – before it’s too late. They show that strategies using the signaling power of Lumber and Gold result in stronger absolute and risk-adjusted returns than a passive buy-and-hold index.

Read the USA Today article

2015 NAAIM Wagner Award press release

About NAAIM Wagner Award Competition

 

Bilello and Gayed win First Place in 2015 NAAIM Wagner Award Competition

Offensive and Defensive Strategies Using Commodity Signals Result in Gold – or $10,000 – for 2015 NAAIM Wagner Award Winners Charlie Bilello and Michael A. Gayed.

 Littleton, CO – April 13, 2015 – The National Association of Active Investment Managers (NAAIM) announced today that Charlie Bilello and Michael A. Gayed, both with Pension Partners, LLC are the 2015 first-place winners of the $10,000 NAAIM Wagner Award for Advances in Active Investment Management for their paper “Lumber:  Worth Its Weight in Gold – Offense and Defense in Active Portfolio Management.”

In its seventh year, the NAAIM Wagner Award is designed to expand awareness of active investment management techniques and the results of active strategies.

Of the winning paper, Greg Morris, the Chairman of the Award Committee, writes “Charlie Bilello and Michael Gayed truly provide out-of-the-box thinking with this year’s winning paper.  Focusing on non-traditional market signals using two well-known commodities, Bilello and Gayed demonstrate that risk-based active investment management has a big impact on performance.” Morris, author of “Investing with the Trend” and “Dancing with the Trend,” is Chairman of the Board of Trustees for the Stadion Trust and a consultant.

In their award-winning paper, Charlie Bilello and Michael A. Gayed uncover a market anomaly in the relative movement of Lumber to Gold.  They find that the relationship between these two commodities provides important information on economic growth and inflation expectations, which gradually diffuses with a lag to stock and bond markets.  Lumber’s sensitivity to housing, a key source of domestic economic growth in the U.S., makes it a unique commodity as it pertains to macro fundamentals and risk-seeking behavior.  On the opposite end of the spectrum is Gold, which is distinctive in that it historically exhibits safe-haven properties during periods of heightened volatility and stock market stress.

In their paper, Bilello and Gayed use Lumber and Gold as a signal to help answer the most critical question for active asset managers: when to take more risk (“play offense”) and when to take less risk (“play defense”) in an investment portfolio – before it’s too late. They show that strategies using the signaling power of Lumber and Gold result in stronger absolute and risk-adjusted returns than a passive buy-and-hold index. This outperformance stems from being more aggressive in a portfolio during periods when Lumber is leading Gold and being more defensive during periods when Gold is leading Lumber. Importantly, Bilello and Gayed argue that being defensive and protecting capital during periods of higher volatility in equities was the more critical factor in generating outperformance.

While seemingly at opposite ends of the economic spectrum, the paper illustrates that Lumber and Gold is a relationship that has been powerful over multiple economic and market cycles. For active managers, Lumber is indeed worth its weight in Gold.

A panel of investment professionals selected by the NAAIM Wagner Award committee reviewed entries and awarded the prizes. The criteria used in judging the papers are: practical significance to practitioners of active investing; quality of exposition; analytical rigor; and novelty of results. In addition to Morris, the panel included Jerry Wagner of Flexible Plan Investments, Ltd.; John Ehlers of Mesa Software; and Bill Barack of Lindisfarne Investments LLC.  Additionally, Jeff Pietsch of Concert Capital Management and Steve LeCompte, CXO Advisory Group, LLC were added to the judging team this year.  To find out more about the judges’ panel, follow this link: http://www.naaim.org/resources/wagner-award-papers/wagner-award-judging-team/.  The 2015 NAAIM Wagner Award received 15 entries this year, mostly from the United States and Canada.

Receiving second place in the competition was Nathan Faber, Quantitative Research Associate with Newfound Research, Inc,  located in Boston, Massachusetts for his paper “The Search for Crisis Alpha: Weathering the Storm using Relative Momentum.” The third place winner, Andrew Gogerty, Vice President of Investment Strategies, is also from Newfound Research and was awarded the third place prize for his paper “Momentum AND Diversification – A powerful risk-adjusted combination.”  Second and third place winners will receive $3,000 and $1,000, respectively.

The NAAIM Wagner Award research papers are available to the public.  Up to three papers can be requested using a search feature (coming soon) on the NAAIM website.  Users will be able to search for papers by competition year, author’s name, paper title, and in Phase 2, by keyword.  Phase 1 of the search feature will be available on the NAAIM website by May 1, 2015.  To request a copy of the winning paper before May 1, please contact NAAIM using this contact form http://www.naaim.org/about/contact-us/.

First Place winner Charlie Bilello and Michael A. Gayed will be presenting their winning paper at NAAIM’s 2015 national conference, Uncommon Knowledge, May 3-6 in Newport Beach, California.  For more information or to register for the annual conference, visit the NAAIM website http://www.naaim.org/events/uncommon-knowledge-national-conference/

To Read An Abstract of the Paper: Lumber – Worth Its Weight in Gold – 2015 Wagner Award – Abstract – Bilello Gayed

 About the Winners

Charlie Bilello

Charlie Bilello, CMT is the Director of Research at Pension Partners, LLC, an investment advisor managing mutual funds and separate accounts. He is the co-author of two award-winning research papers in 2014. Prior to joining Pension Partners, he was the Managing Member of Momentum Global Advisors and previously held positions as an Equity and Hedge Fund Analyst at billion dollar alternative investment firms. Mr. Bilello holds a J.D. and M.B.A. in Finance and Accounting from Fordham University and a B.A. in Economics from Binghamton University. He is a Chartered Market Technician (CMT) and holds the Certified Public Accountant (CPA) certificate. Mr. Bilello is a frequent contributor to Yahoo Finance and has been interviewed on CNBC, Bloomberg, and Fox Business.

Michael Gayed

   Michael A. Gayed, CFA is the Co-Portfolio Manager and Chief Investment Strategist at Pension Partners, LLC, an investment advisor managing mutual funds and separate accounts. He is the co-author of two award-winning research papers in 2014. Mr. Gayed structures portfolios to best take advantage of various strategies designed to maximize the amount of time and capital spent in potentially outperforming investments. Prior to this role, he served as a Portfolio Manager for a large international investment group and a Portfolio Strategist at AmeriCap Advisers, LLC. Michael is an active contributor to MarketWatch and has been interviewed on CNBC, Bloomberg, Fox Business, as well as the Wall Street Journal live for his unique approach to interpreting market movements. His analysis has also been featured by Marc Faber of the Gloom, Boom and Doom Report. Michael earned his B.S. from New York University and is a CFA Charterholder.

Gayed also won Third Place in the 2014 NAAIM Wagner Award competition.

  About the NAAIM Wagner Award

In honor of the vision and work of Jerry Wagner, NAAIM founding member and president and CEO of Flexible Plan Investments, Ltd., the NAAIM Wagner Award for Advances in Active Investment Management annually awards $10,000 to a first-place paper providing evidence of the validity of an active investing approach using a trading system that outperforms the market by some well-accepted metric such as risk-adjusted return, annual return or drawdowns. Second-place and third-place winners are awarded $3,000 and $1,000, respectively. Previous winning papers are available for the public to view/download.  Contact NAAIM for more information.

The top prize in 2014 went to Dave Walton, co-founder of StatisTrade for his paper “Know Your System! – Turning Data Mining from Bias to Benefit through System Parameter Permutation.”

About NAAIM

The National Association of Active Investment Managers (NAAIM) is a non-profit trade group of nearly 200 registered investment advisor firms that collectively manage over $35 billion in assets. NAAIM member firms provide active money management services to their clients to produce favorable risk-adjusted returns as an alternative to more passive, buy-and-hold investment strategies. NAAIM publishes the weekly NAAIM Exposure Index, and sponsors the annual Uncommon Knowledge conference along with smaller conferences and regional workshops on managing portfolios, trading techniques for various instruments and markets, regulation and compliance, and other topics of interest to its membership. For more information, visit www.naaim.org.

For more information, contact:
Greg Morris

2015 NAAIM Wagner Award Chairman

888-261-0787

info@naaim.org

Testy Times For Tactical Managers

I was recently named Chief Investment Officer at Sowell Management Services, a registered investment advisor that is responsible for about $500 million of client assets. Part of the gig is to communicate all things market related to the portfolio managers, the sales team, and the independent advisors who represent the firm.

During a staff meeting on Monday, the National Sales Manager wanted my take on the current environment for “tactical” investment strategies. He noted that most tactical managers had a rough go last year and wondered if the environment had changed with the calendar. My response was brief and to the point, “It’s been ‘sheer misery’ in the tactical space since the beginning of 2014… and no, nothing has changed.”

Not surprisingly, I was asked to put “some color” behind my view and to extrapolate on why the environment has been tough on folks trying to employ a tactical approach to investing (which according to Investopedia is defined as: “An active management portfolio strategy that rebalances the percentage of assets held in various categories in order to take advantage of market pricing anomalies or strong market sectors.”)

I tried to respond as succinctly as possible and when I was done, I realized that others might find my explanation of the current environment worthwhile.

So, here was my response and some thoughts on what investors/advisors should be doing now…

Read the rest of the report…

 

David Moenning

Direct: 303-670-9761

www.HeritageCapitalResearch.com

Check Out the NEW Website!

David Moenning is Mr. Moenning is President of Heritage Capital Research, a privately owned, investment research firm. Heritage focuses on active risk management and an “own the best and ignore the rest” equity selection strategy.

For up to the minute updates on the market’s driving forces, Follow Me on Twitter: @StateDave (Twitter is the new Ticker Tape)

Positions in stocks mentioned: none


The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security or Heritage Capital program. No part of this material is intended as an investment recommendation. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any of HCM’s programs. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that investment objectives outlined will actually come to pass. Investors should consult an Investment Professional before investing in any investment program. Neither Mr. Moenning or Heritage Capital Management nor any of their employees shall have any liability for any loss sustained by anyone who has relied on the information contained herein. Mr. Moenning and employees of HCM may at times have positions in the securities referred to and may make purchases or sales of these securities while this publication is in circulation. The analysis contained is based on both technical and fundamental research. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

 

Going Forward With Great Purpose

“When you are inspired by some great purpose, some extraordinary project, all of your thoughts break their bonds. Your mind transcends limitations, your consciousness expands in every direction, and you find yourself in a new, great, wonderful world.”

“When you are inspired, dormant forces, faculties, and talents come alive and you discover yourself to be a greater person, by far, than you’ve ever dreamt yourself to be.”

– Patañjali

The Fed tried to talk down the dollar last Wednesday. Essentially firing a warning shot (downgrading estimates for growth, inflation and short-term interest rates). The ultra-low rates in Germany and Japan vs. the U.S. favor the dollar. Anything that points to the Fed raising rates enhances the attractiveness of U.S. bonds and attracts further capital flows.

The McKensey report on debt has received a lot of press (and rightfully so). The problem is debt and deflation has the lead in the inflation deflation race. It is the foe we do not wish to win. This from The Telegraph in a piece titled, “From bust to boom: How the world became addicted to debt”.

Not one developed economy (and only five emerging markets) has managed to reduce debt-to-GDP ratios which include both household and government debt. When taken together, this total debt mountain has grown by $57 trillion since 2007, far outpacing global growth.

This explosion in public debt levels has come about as countries have been unable to “inflate away” their liabilities. Instead, a global deflationary spiral has amplified the amount that countries owe and the interest they pay to service these debts.

Each country is playing from the same playbook. Thinking, if only we can grow our way out of this mess. Debase currency, become more competitive currency wise – grow the economy and inflate away the debt. The opposite is happening.

Read the rest of the report…

 

Steve Blumenthal

Founder & CEO CMG

www.CMGWealth.com

Stephen Blumenthal founded CMG in 1992. He is CEO, Chief Investment Officer and portfolio manager at Capital Management Group, Inc. where he manages equity and tactical investment portfolios. He is a frequent speaker and writer on investment strategies and has been featured in various media sources including the Wall Street Journal, Barron’s, Investor’s Business Daily, Pensions & Investments Magazine, Investment News, RIA Biz and Smart Money. He has been a guest on CNBC, Wall Street Journal Live, and Bloomberg. Mr. Blumenthal is a frequent speaker at industry conferences (NAPFA, IMCA, Index Universe, Opal Financial Group Indexing & ETF Summit and NAAIM) and is author of CMG’s popular investment research commentary. With 30 years of investment management and industry experience, prior to founding CMG, Mr. Blumenthal worked for Merrill Lynch Institutional, Merrill Lynch Retail and Prudential Securities.

Mr. Blumenthal graduated with a Bachelor of Science degree in Accounting from Pennsylvania State University. He is married, has three children and is active in his community coaching youth soccer.

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