Equities Are Flashing Yellow

Today is a twofer of posts. First up is warning signs from the market that seems particularly acute including the glee surrounding the biggest IPO ever a couple of weeks ago. There is always a bull case and a bear case but over the last couple of months the bear case has grown stronger. This is not an attempt to predict when the market turns but it is important to understand the current market environment. From the post; Market breadth has also deteriorated. Barron’s cited stats in several spots last week about the average stock in various indexes being down even though the index itself is up, a function of market cap weighting where late in the cycle it is the largest stocks that have historically been the last to rollover. Please click through to read the entire post. In this week’s Market Update we look at many things as we always do including; …a good old fashioned, honest to goodness, legitimate black swan… Please click here for the entire...

Ten Years For Random Roger

Today is the tenth anniversary for the Random Roger blog. I started blogging by accident, although I was doing some writing, when I downloaded FireFox for the first time and Blogger was one of the bookmarks already loaded in. Before then I’d had something short published in Barron’s and had a few things published at Motley Fool. Starting in 2004 made me relatively early in blogging, I was not any sort of pioneer but was early enough to get a fair bit of MSM coverage back in the early days. The traffic to the site has often been decent (I think) but never huge like some folks get and I’ve never made any meaningful money from advertising but I have said many times that it opened a lot of doors in terms of meeting people and doing things that I would have never had the chance to do and there have been a couple of business opportunities that came along as well. Over the ten years I’ve been very right about a few things and also very wrong about a few things and going forward that will repeat which applies to most market participants and so if you can be right a little more often than you’re wrong you’ll probably turn out ok. On investment process; things have not changed radically by any means. I continue to believe the vast majority should be in simple equities and fixed income in a globally diversified portfolio. I am also still a big believer in having a small allocation to diversifiers to help smooth out the ride. I had good luck with...

What Message Is The Alibaba IPO Sending?

This week’s Market Update is posted and covers a lot of ground for having been a busy week. From the post; Also noteworthy was the phrase “significant underutilization of labor resources” which acknowledges more people are finding work of some sort while still realizing that many American are underemployed versus where they were before the financial crisis and that the declining trend in the labor force participation rate is not solely attributable to boomer retirement. Please click through to read the entire...

Solving Retirement Dilemmas

My latest for Alpha Baskets is titled What Trading Places Can Teach Us About Personal Finance and looks at a couple of real life examples of people who are at different points of financial readiness to retire but are at the same point of emotional readiness. The takeaway of course is living below your means to create financial flexibility for the the future you. From the post; The other friend, let’s call him Billy Ray, is 51 and is a volunteer with our department who just started with us a couple of years ago. He is very eager to retire (counting down in months) and has found an intersection between his career and firefighting that he wants to do but will pay him significantly less money but he is lining up his ducks to do this very soon. Please click through to read the entire post. From the Sundance Fire in April of this...

CALPERs Behavioral Trade

My latest for Alpha Baskets looks at whether CALPERs is divesting of hedge funds because of impatience. Look at the arc of when they got an and now getting out, you could conclude that there are behavioral deficits at work. They got in after a period of a few years when plain equities didn’t do well and now they are getting out after a period of a few years where hedge funds haven’t done well which could a function of being impatient on both counts. I am not arguing for hedge funds so much as pointing out the type of impatience that many investors confront. From the post; This raises an interesting behavioral question. Why are they getting out? CALPERs has said they want to simplify and of course simple is good but why do they want to simplify? The WSJ says it is not because of performance but if their hedge funds were adding tremendous value to the results(tremendous value is intentionally vague) do you think they would be divesting? I would say no. Please click through to read the entire post. Crater...