Hussman Posted Early

Hussman Funds – Weekly Market Comment And the money quote; Frankly, I’ve come to believe that the markets are no longer reliable or sound discounting mechanisms....

Sunday Morning Coffee

A couple of interesting items in Barron’s this week. First is this article about the extent to which the Chinese banks need to recapitalize and which banks have done what toward that end. The China theme has a lot of meat on the bone but it is complicated and as I have been saying all along (with no claim to originality) there will be bumps along the way. If you have exposure to China through some sort of narrow fund or individual stock then you should know a little something about the loan growth in the last couple of years, their stimulus plan and the concerns that surround both. China may be showing signs of rolling over and if that is the case I would expect the banks, and maybe the insurance companies too, to feel it the most. The concerns about lending in China and the newer news about Dubai should make you open to the possibility that the financial crisis may not be over, an opinion I have had all along, if you weren’t already. I think going heavy in financials still offers a lot of the wrong kind of volatility and so I continue with simpler banks from Australia, Canada and Chile. To the extent that this line of thinking makes sense to you then you probably want to avoid accessing China with most of the China ETFs or at least the most actively traded China ETFs like iShares China 25 (FXI) which is 46% financials, SPDR China ETF (GXC) and Claymore China All Share (YAO) each with 34%. A little more promising, in terms of...

Sunday Morning Coffee

A couple of interesting items in Barron’s this week. First is this article about the extent to which the Chinese banks need to recapitalize and which banks have done what toward that end. The China theme has a lot of meat on the bone but it is complicated and as I have been saying all along (with no claim to originality) there will be bumps along the way. If you have exposure to China through some sort of narrow fund or individual stock then you should know a little something about the loan growth in the last couple of years, their stimulus plan and the concerns that surround both. China may be showing signs of rolling over and if that is the case I would expect the banks, and maybe the insurance companies too, to feel it the most. The concerns about lending in China and the newer news about Dubai should make you open to the possibility that the financial crisis may not be over, an opinion I have had all along, if you weren’t already. I think going heavy in financials still offers a lot of the wrong kind of volatility and so I continue with simpler banks from Australia, Canada and Chile. To the extent that this line of thinking makes sense to you then you probably want to avoid accessing China with most of the China ETFs or at least the most actively traded China ETFs like iShares China 25 (FXI) which is 46% financials, SPDR China ETF (GXC) and Claymore China All Share (YAO) each with 34%. A little more promising, in terms of...

The Big Picture for the Week of November 29, 2009

A few items today. In the wake of the Dubai news the FT mentioned some of the trouble happening in Greece. For ages I have been talking about being underweight big Western Europe for having a lot of the same types of trouble that the US has but I have not mentioned the PIGS countries before. I’m not sure when that acronym first popped up but it stands for Portugal, Ireland, Greece and Spain. These countries have a lot of problems, potentially worse than France, Germany and the UK (the UK of course not in the EMU but still it has problems). In addition to everything else they struggle with the various requirements to be part of the euro. I used to own Ireland and Spain and got lucky selling when I did. The story in these places changed and so selling became prudent. This is part of the process for selecting individual countries, occasionally something changes in such a way as to warrant getting out. This is a tie in to the need for more work when going narrower than some mix of SPY, EFA and IWM. Yesterday I put up a quick note that DP World, the ports company that is part of Dubai World, appears to be traded on the pinksheets with ticker DPWRF (Schwab said they could not trade it due to custody issues). Part of the issue with selecting countries is trying to figure the best way in. The other day in the video from the basketball tourney I said that the ETF coming for Kuwait would likely be heavy in financials which might...

The Big Picture for the Week of November 29, 2009

A few items today. In the wake of the Dubai news the FT mentioned some of the trouble happening in Greece. For ages I have been talking about being underweight big Western Europe for having a lot of the same types of trouble that the US has but I have not mentioned the PIGS countries before. I’m not sure when that acronym first popped up but it stands for Portugal, Ireland, Greece and Spain. These countries have a lot of problems, potentially worse than France, Germany and the UK (the UK of course not in the EMU but still it has problems). In addition to everything else they struggle with the various requirements to be part of the euro. I used to own Ireland and Spain and got lucky selling when I did. The story in these places changed and so selling became prudent. This is part of the process for selecting individual countries, occasionally something changes in such a way as to warrant getting out. This is a tie in to the need for more work when going narrower than some mix of SPY, EFA and IWM. Yesterday I put up a quick note that DP World, the ports company that is part of Dubai World, appears to be traded on the pinksheets with ticker DPWRF (Schwab said they could not trade it due to custody issues). Part of the issue with selecting countries is trying to figure the best way in. The other day in the video from the basketball tourney I said that the ETF coming for Kuwait would likely be heavy in financials which might...