A White Knuckle Ride To A Small Gain

This week’s Market Update is posted at Alpha Baskets and includes the following: Getting much of the blame for the volatility is China, especially if you read the current issue of Barron’s. Like any market, there is both a bull case and a bear case but clearly Chinese officials feel compelled to try to prop up their market with things like bans on insider selling, having a heavy hand in the currency markets and the promise of institutional purchases of equities yet to come. The equity volatility brought the Fed into play (kept it play?) as William Dudley from the New York Fed noted the case for a September hike was less compelling but Fed Vice Chair Stanley Fischer said it  too soon to tell. The GDP report was revised to 3.7% well ahead of the 3.2% estimate. If the Fed does hike in September then the 3.7% number will likely be cited as part of the justification. Please click through for the entire update. Neat signage in East Glacier,...

Stop Orders: Vestige of a Bygone Era?

My latest at Alpha Baskets looks at the extent to which some investors “got hosed” on stop orders that elected during that 10 minute, 1100 point swoon on Monday. As I discuss in the post, something seems to have changed with the exchanges’ reliability and how they execute orders. While it would be great to solve these issues, it is for now most important to be aware of them. Earlier in the week I was joking with a colleague about how in the 1990’s the online brokerages had outages or other forms of disruption all the time, it was after all the dawn of the internet as a household utility, but that the exchanges never had problems. Somewhere along the way that reversed, brokerage downtimes have all but disappeared while at the same time between the flash crash of 2010 and a couple of failed IPOs (as in failed execution) the exchanges regularly send someone on stock market television to reassure participants that things are working. Please click through to read the entire post. Ogren Stadium, home of the Missoula Osprey, Class A Affiliate of the Arizona...

Time To Panic? Not Now, Not Ever

This week’s market update is posted and dives in on what is going on with markets (they’re panicking) and offers a reminder of how these events tend to play out (hint: favorably). Longer excerpt than normal; The current decline when plotted out on a chart looks like a Black Diamond ski run. Declines of this magnitude in the course of a few days amounts to a panic and in moments of reason every market participant knows they shouldn’t panic. Now in a moment of market panic hopefully every market participant can remember they shouldn’t themselves panic. If you are reading this then you have been through at least one of these before in 2008 and you know what happened. It was the same thing that always happens. The market dropped a lot, it scared the hell out of a lot of people stayed down for a while and then went on to make a new high. This will be no different, the only variable is time; how long before a new high gets made. As far as a game plan for the current environment it is important to understand that at any given moment there is a favorable case for equities and a negative case. Contributing to the negative case now is the deteriorating internals (you may have seen on CNBC that 143 S&P 500  components are down more than 20% and as of today that number will be bigger), the years of 15% price appreciation that came with 5% earnings growth (a point made by David Rosenberg), the duration of the current bull market, uninspiring economic data as...

Crude Misery

The weekly Market Update is posted and includes the following; Working against markets these days is the inability to make new highs and the decreasing number of S&P components trending higher and on the plus side, although the S&P 500 has been flirting with its 200 day moving average for the last few weeks that trend line has held thus far and it is still positively sloped. Please click through to read the entire update. The Reynolds Creek Fire in Glacier National...

Time Is On Your Side, Yes It Is

My latest for Alpha Baskets looks at taking the proper view of time horizon and letting the long term be your investing ally. A big obstacle for many investors is that they focus on the wrong time frame. From the post; The way I try to put the issue of time and the advantage of longer term perspective is to ask “without looking, how did your portfolio do in the 4th quarter of 2013 and how did that compare to the market?” No one knows, without looking, because it doesn’t matter, it is just some random quarter in the past just as the current quarter will soon be some random quarter from the past. Please click through to read the entire post. Neat sign in Polson, MT near Flathead...