No September Rate Hike
This Thursday, September 17th, the Federal Reserve will announce their decision on interest rates at 2PM EST. I don't think they will raise rates for the following reason: 1) Since the financial crisis of 2008-09, the Fed's number one priority is to see a strong recovery in the economy. They have done this by keeping interest rates low and pumping money into the system through various forms of accommodation. Has the economy recovered since 2009? [...]
More Negatives than Positives, but…
Part of my investment philosophy is to look at the positive and negative signs in the market and adjust my investment levels accordingly. It is important to keep an open mind when doing this. Don’t get too caught up in what “you think the market should be doing.” Flexibility is important but being stubborn gets you nowhere. Here are some observations: 1) All the major indexes are below their 10-week moving averages. This is important [...]
Paul Tudor Jones on Jesse Livermore
One of the greatest trading books ever written is Reminiscences of a Stock Operator. The original book was published in 1923, but in 2010, an Annotated Edition was produced by Jon Markman. This edition reveals the truth about Jesse Livermore and provides colorful, historically accurate commentary on the characters, places, and events that have made Reminiscences such an enjoyable and educational read for generations. The foreward to the Annotated Edition is written by legendary trader Paul [...]
It’s a terrible thing to live in fear
In my 19 years of trading, I’ve never seen so much bearishness, fear, and apathy, especially with the market at all-time highs. I’m not talking about the long-only, buy and hold crowd. Those people are always bullish and they NEVER sell. They just ride the market all the way up, and then all the way down during corrections. I’m mostly talking about the trading community, potential clients I talk to, and many of the sentiment [...]
Stock Picker’s Market
Back in 2007, one of my favorite money managers, Ken Heebner, was up +80% for the year while the S&P 500 was only up +3.5%. How did he do it? He was concentrated in the best stocks from the strongest sectors. I remember it well because I was focused on the same stocks and I was up +72% that year. Some will argue that he gave a great deal of his gains back, but that [...]
Random Thoughts
Every one of these topics could be a separate blog post, but I'm just going to fire off a few things going through my head right now (in no particular order): 1) I keep hearing about how we should prepare for a "higher rate environment." Why are very few people taking about the possibility of rates staying low for the next 3-5 years? 2) No one wants to commit to this market with any conviction. [...]