Chris Irons, founder of Quoth the Raven Research - slides and presentation from the Kase Learning "The Art of Short Selling" conference held on May 3, 2018 at the New York Athletic Club.
The document discusses concepts from behavioral finance that influence investor behavior and markets, including herd behavior, anchoring, and various calendar effects. It provides an overview of each concept and recent evidence questioning whether strategies like "Sell in May" have been reliable. The conclusion acknowledges that while machines now influence markets, human behavior still plays a role, and deep research is needed to overcome cognitive biases and take a long-term view of investing.
The document outlines 10 key things voters should know about the economy before the November election, including:
1) The debate between "supply-side" and "demand-side" economic theories.
2) Arguments around tax policy and the federal budget deficit.
3) The Federal Reserve's role in monetary policy and managing interest rates.
4) The rising federal debt and questions around spending vs. balancing the budget.
5) Issues surrounding large banks and financial institutions.
6) The growing costs of social programs like Social Security and Medicare.
7) Problems in the U.S. healthcare system.
8) Impacts of free trade and globalization.
Howard Marks provides a balanced discussion of the current market environment, covering both positives and negatives. On the positive side, the U.S. economy is growing and corporate profits are increasing. However, asset valuations are very high by historical standards and investor behavior has become increasingly risky. Given the high prices and uncertainties, Marks favors a cautious stance rather than aggressiveness. While not recommending getting out of the market, he advocates incorporating more defensiveness into portfolio management strategies.
The document summarizes an article by Jeffrey Saut discussing the behavior of retail investors over the course of bull markets. It notes that retail investors tend to sell stocks too early after price increases, repurchase the same stocks at even higher prices, and hold on too long during market declines. The article cites a 1917 book that documented this behavior and concludes it still persists today. It warns that with the current bull market in its mature stage, retail investors following these typical patterns could see their stocks continue rising in the short term but face losses if the market declines.
Investment insights from news and social media analysisNUS-ISS
This document discusses how analyzing news and social media can provide insights for investment decisions. It describes MarketPsych's sentiment indexes that track emotions and topics related to 187 countries, 15,000 companies, 62 indexes and other assets. Sentiment is derived from over 2,000 news and 800 social media sources. Studies show stocks with most negative sentiment over the past year tend to underperform in the next 90 days, indicating underreaction to information. Stocks with most positive sentiment on fundamentals and earnings also see price momentum, as the market underreacts to good news. High anger stocks also tend to outperform over time, indicating overreaction.
Blackwall partners 2 qtr 2016- transient volatility part iiiMichael Durante
This document discusses the state of the US economy under President Obama and the policies of the Obama administration. It argues that the economy has stagnated, with 95 million Americans not working, wages stagnant, and declining upward mobility. It attributes this to failed "socialistic" policies and excessive government intervention. The author argues the economy needs inspiration to return to growth and policies that worked previously to boost jobs, wages, home and family formation.
This document provides a summary of slides for a presentation on the risks facing China's economy and currency. It discusses the large capital outflows from China, the end of China's currency carry trade, declining foreign exchange reserves, and deflationary pressures. The document argues that China will be forced to allow greater depreciation of its currency, the renminbi, in order to regain control over monetary policy and restore competitiveness. It predicts a disorderly disruption in China could cause a 20% or greater fall in the renminbi and trigger widespread turmoil across emerging markets similar to the 1997 Asian financial crisis.
The document discusses concepts from behavioral finance that influence investor behavior and markets, including herd behavior, anchoring, and various calendar effects. It provides an overview of each concept and recent evidence questioning whether strategies like "Sell in May" have been reliable. The conclusion acknowledges that while machines now influence markets, human behavior still plays a role, and deep research is needed to overcome cognitive biases and take a long-term view of investing.
The document outlines 10 key things voters should know about the economy before the November election, including:
1) The debate between "supply-side" and "demand-side" economic theories.
2) Arguments around tax policy and the federal budget deficit.
3) The Federal Reserve's role in monetary policy and managing interest rates.
4) The rising federal debt and questions around spending vs. balancing the budget.
5) Issues surrounding large banks and financial institutions.
6) The growing costs of social programs like Social Security and Medicare.
7) Problems in the U.S. healthcare system.
8) Impacts of free trade and globalization.
Howard Marks provides a balanced discussion of the current market environment, covering both positives and negatives. On the positive side, the U.S. economy is growing and corporate profits are increasing. However, asset valuations are very high by historical standards and investor behavior has become increasingly risky. Given the high prices and uncertainties, Marks favors a cautious stance rather than aggressiveness. While not recommending getting out of the market, he advocates incorporating more defensiveness into portfolio management strategies.
The document summarizes an article by Jeffrey Saut discussing the behavior of retail investors over the course of bull markets. It notes that retail investors tend to sell stocks too early after price increases, repurchase the same stocks at even higher prices, and hold on too long during market declines. The article cites a 1917 book that documented this behavior and concludes it still persists today. It warns that with the current bull market in its mature stage, retail investors following these typical patterns could see their stocks continue rising in the short term but face losses if the market declines.
Investment insights from news and social media analysisNUS-ISS
This document discusses how analyzing news and social media can provide insights for investment decisions. It describes MarketPsych's sentiment indexes that track emotions and topics related to 187 countries, 15,000 companies, 62 indexes and other assets. Sentiment is derived from over 2,000 news and 800 social media sources. Studies show stocks with most negative sentiment over the past year tend to underperform in the next 90 days, indicating underreaction to information. Stocks with most positive sentiment on fundamentals and earnings also see price momentum, as the market underreacts to good news. High anger stocks also tend to outperform over time, indicating overreaction.
Blackwall partners 2 qtr 2016- transient volatility part iiiMichael Durante
This document discusses the state of the US economy under President Obama and the policies of the Obama administration. It argues that the economy has stagnated, with 95 million Americans not working, wages stagnant, and declining upward mobility. It attributes this to failed "socialistic" policies and excessive government intervention. The author argues the economy needs inspiration to return to growth and policies that worked previously to boost jobs, wages, home and family formation.
This document provides a summary of slides for a presentation on the risks facing China's economy and currency. It discusses the large capital outflows from China, the end of China's currency carry trade, declining foreign exchange reserves, and deflationary pressures. The document argues that China will be forced to allow greater depreciation of its currency, the renminbi, in order to regain control over monetary policy and restore competitiveness. It predicts a disorderly disruption in China could cause a 20% or greater fall in the renminbi and trigger widespread turmoil across emerging markets similar to the 1997 Asian financial crisis.
1) The US presidential election in November is causing some concern among clients about its potential impact on the economy and markets.
2) Historically, stock market returns in presidential election years have averaged 6.5% versus 7.9% in non-election years, though removing recession years like 2008 reduces the difference.
3) No single president has ever enacted all their proposed changes due to checks and balances, so markets are unlikely to change dramatically based on election outcomes alone. It's best for long-term investors to stay the course and not make decisions based on unknown potential outcomes.
- There is no certainty in financial forecasting, especially in large liquid markets like FX. Market authorities often contradict themselves by saying trends will continue when markets are bullish but admitting they have no idea about future movements when markets turn bearish or volatile.
- FX rates are influenced by human sentiment, which is capricious. While some macroeconomic factors may influence rates, commentators' choice of explanatory variables and failure to consider full market context leads to oversimplified understandings that may influence trader behavior.
- Financial markets involve thousands of intelligent agents whose motivations are partly hidden but sometimes manifest in predictable patterns related to herd behavior, risk management, and profit-taking. Markets may have nonlinear patterns that statistical models
Fasanara Capital | Investment Outlook
1. The Future Is Wide Open: Avoid The ‘Illusion Of Knowledge’ Trap
The single most dangerous thinking trap / optical illusion for investors today is to look at Trump, Brexit and Italy Referendum as non-events, buried in the past. We believe that 2017 may likely be driven by the same factors that failed to shape 2016. The non-events of 2016 are likely to be the drivers of 2017. Finally, we will get to find out if Brexit means Brexit, if Trump means Trump, if a failed Italian referendum means early elections and a membership of the EMU in jeopardy down the line.
2. Structural Shift: These Are Transformational Times
The macro outlook of the next years will be influenced the most by these structural trends:
› Protectionism, De-Globalization & De-Dollarization. In Pursuit of Inclusive Growth
› End of ‘Pax Americana’. The ascent of China. Geopolitical risks on the rise
› End of ‘Pax QE’. Markets without steroids, but still delusional.
› 4th Industrial Revolution: labor participation rate falling from 63% to 40% in 10 years?
3. Our Baseline Scenario: Bubble Unwind, Equities and Bonds Down
Starting this 2017, our major macro convictions are as follows:
› Global Tapering to progress
› US Dollar to keep grinding higher
› European Political Instability to worsen
› US Equities to weaken
The options market signals that investors anticipate higher inflation and interest rate hikes in the near future under President Trump. It also indicates that the downside risk to stocks is limited and that deregulation, tax cuts, and fiscal stimulus could spur stronger economic growth and higher corporate profits. Specifically, the options market sees industries like financials, industrials, technology, and consumer discretionary as benefiting most. Overall, the options market views Trump as understanding the importance of global trade and does not see him imposing severe sanctions on important trade partners like Mexico, China, and emerging markets.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
The document discusses investment strategies and thinking processes. It summarizes that good thinking is a lonely process that requires anticipating change correctly. It discusses how linear thinking can cause investors to miss opportunities for change. It provides examples from history where thinking on the margins helped identify opportunities, such as recognizing changes in technology stocks in the 1960s and interest rates in the 1980s. It analyzes current market conditions and predicts the odds of a new secular bull market are now 45-50%, though few investors currently believe this. It concludes that select market correlations broke down last week and economic reports imply tapering may be delayed, supporting stocks in the near-term.
The document summarizes the performance of the Western Reserve Master Fund for the first quarter of 2010. It rose 22.3% gross and 18.2% net, outperforming benchmarks. It also provides background on Charles Mackay's 1841 book "Extraordinary Popular Delusions and the Madness of Crowds" and discusses how recent economic events could be added to the book. The document then analyzes specific investments in the fund's portfolio, including Citigroup and Wells Fargo, focusing on their earnings power, cash flows, and valuation using a pre-tax, pre-provision income approach.
Vikram Mansharamani is an expert on financial bubbles who authored the book "Boombustology". He believes it is possible to identify bubbles before they burst by analyzing multiple factors, including macroeconomics, microeconomics, psychology, politics, and ecology. While impossible to time exactly when a bubble will pop, this "boombustology" approach helps gauge risk. Mansharamani remains concerned about the risks of bubbles in areas like Chinese real estate and corporate debt, and believes a crisis in China could significantly impact the global economy and commodity markets.
Fasanara Capital | Investment Outlook
1. Fake Markets: How Artificial Money Flows Kill Data Dependency, Affect Market Functioning and Change the Structure of the Market
Hard data ceased to be a driver for markets, valuation metrics for bonds and equities which held valid for over a century are now deemed secondary. Narratives and money flows trump hard data, overwhelmingly.
‘Fake Markets’ are defined as markets where the magnitude and duration of artificial flows from global Central Banks or passive investment vehicles have managed to overwhelm and narcotize data-dependency and macro factors. A stuporous state of durable, un-volatile over-valuation, arrested activity, unconsciousness produced by the influence of artificial money flows.
- Passive Flows: The Prehistoric Elephant In The Room
- ETFs Are Taking Over Markets
- The Impact of Passive Investors on Active Investors: the Induction Trap
- How Narratives Evolve To Cover For Fake Markets
- Defendit Numerus: There is Safety in Numbers
- What Could We Get Wrong
2. Be Short, Be Patient, Be Ready
Markets driven by Central Banks, passive investment vehicles and retail investors are unfit to price any premium for any risk. If we are right and this is indeed a bubble (both in equity and in bonds), it will eventually bust; it is only a matter of time. The higher it goes, the higher it can go, as more swathes of private investors are pulled in. The more violently it can subsequently bust.
The risk of a combined bust of equity and bonds is a plausible one. It matters all the more as 90%+ of investors still work under the basic framework of a balanced portfolio, exposed in different proportions to equity and bonds, both long. That includes risk parity funds, a leveraged version of balanced portfolio. That includes alternative risk premia funds, a nice commercial disguise for a mostly long-only beta risk, where premia is extracted from record rich markets that made those premia tautologically minuscule.
The document discusses the development of the Investment Rate, which aims to determine how much money will be systematically invested into the economy each year to define longer-term economic and stock market cycles. It describes how the author analyzed various economic data and theories before determining that the key factor was the life cycles of normal people. Through analyzing data on retirement planning, mortgage payoff timelines, and college education costs, the author was able to identify age 50 as the key "Kee Age" when normal people have both the means and motivation to begin investing aggressively for retirement.
The fund manager provides an update on the fund's performance in the third quarter and year to date. While the fund outperformed the S&P 500 in September, it underperformed for the quarter and year due to headwinds from cash holdings and short positions. The manager discusses lessons learned about maintaining target exposures and plans to increase long and short exposures going forward. He also plans to cast a wider net by potentially investing in foreign companies, such as recently establishing a position in Hyundai Motors preferred stock trading at a steep discount. While shorting has been painful, he believes the environment remains attractive for short sellers and plans adjustments to the short strategy including smaller position sizes and better matching long/short exposures.
- The fund rose 3.9% in September vs. 3.1% for the S&P 500. For the quarter, it declined 2.3% and is up 6.3% year-to-date, underperforming the S&P 500 which is up 5.2% and 19.8%, respectively.
- The manager held too much cash (20-40%) and not enough long exposure, aiming to be conservatively positioned. However, this was too conservative given the substantial short position and proved costly as the market rose strongly.
- Going forward, the manager will aim to maintain the target exposures of 100% long and 30% short, occasionally holding more cash/increasing the
The reason the world's economic slump continues is quite clear - people are spending less money than before.
The solution used by the world's central banks is to reduce the amount of money available to people to spend.
Irony or confusion? Take a pick. One thing is clear - investors are doing unusual things with their money, and unfortunately they are paying the price.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
How much should we worry about the chinese stock market collapseAmol Patil
- The Chinese stock market has fallen significantly over the past month, dropping 31.7% since July. The Chinese government has taken drastic measures to try and stop the falling stock prices.
- While a falling stock market in China could negatively impact the global economy due to China's role as a major trading partner and consumer of commodities, the exposure of Chinese households to the stock market is relatively low. Most Chinese households' financial assets are held in cash and bank deposits rather than stocks.
- The stock market crash reflects the fact that China's economic growth rate has been slowing in recent years after a long period of double-digit growth. The crash was likely exacerbated by the unsustainable rise in stock prices due to
The document summarizes several common investment myths, including that the performance of January predicts the performance of the full year, that the "Santa Claus rally" in December reliably occurs, that the S&P 500 performs best on Tuesdays, that copper prices can predict the economy, and that markets should be sold in May and avoided over the summer. For each myth, the document analyzes historical data and finds little statistical evidence to reliably support the strategies predicted by the myths.
Сегодня он успешно совмещает карьеру ученого, преподавателя, финансового консультанта и управляет инвестициями друзей и знакомых на фондовой бирже, используя технологию мониторинга новых медиа, собирающую и анализирующую настроения тысяч мелких и крупных экономических агентов. 27 ноября он рассказал об этом в центре Digital October.
http://digitaloctober.ru/ru/events/knowledge_stream_finansovyy_geniy
Western governments are hopelessly addicted to deficit financing while refusing to address looming funding issues - with apologies to the embarrassingly foolish Angela Merkel, politicians can no more successfully “battle” the markets than you and I can successfully “battle” gravity. Petrocapita is an investment trust built around the premise that demand for energy will continue to move prices higher over the long-term. Petrocapita was created to allow investors to add professionally managed oil & gas assets directly to their portfolios.
She adores hats. She is always very polite and respectful of others. She waves to everyone, and consistently avoids conflict. She is a lady; she is The Queen.
Without a doubt, Queen Elizabeth lives a life quite unlike everyone else in the World – after all, royalty does have its privileges. Yet, when it comes to investing, the Queen is swimming in the same pool of stock market sharks as us common people.
Like everyone else, she pours through her quarterly statements to see how she’s fared. And like everyone else, she loves to make money and simply deplores negative returns. It was rumored that the 2008 crisis hit her particularly hard – over USD 40 million in stock market losses.
This experience must have jilted something, as when The Queen was visiting the esteemed London School of Economics she asked the professor a rather “un-queen” like question – why did economists fail to predict the biggest global recession since the Great Depression?
The document discusses the current economic cycle and signs that the economy may be slowing down after nearly a decade of growth. It notes that while economic numbers have been strong, interest rates have risen several times in recent years and indicators like the CAPE ratio suggest the market may be overvalued. Rather than trying to time the market, the document recommends investors hedge risks by taking advantage of tax laws to protect assets and reduce downside if a market correction occurs.
The document discusses the need for ICT corporations to shift their focus from financial systems to economics in light of global economic shifts. It notes the job losses in the ICT sector, especially at Microsoft, and argues economics should guide business decisions more than politics. The US economy is analyzed and found to have significant debt issues, calling into question its status as sole world leader. The document advocates for ICT companies like Microsoft to assess local markets, focus on the bottom two thirds of consumers, and develop strategies guided by economic principles rather than just maintaining the same approaches.
1) The US presidential election in November is causing some concern among clients about its potential impact on the economy and markets.
2) Historically, stock market returns in presidential election years have averaged 6.5% versus 7.9% in non-election years, though removing recession years like 2008 reduces the difference.
3) No single president has ever enacted all their proposed changes due to checks and balances, so markets are unlikely to change dramatically based on election outcomes alone. It's best for long-term investors to stay the course and not make decisions based on unknown potential outcomes.
- There is no certainty in financial forecasting, especially in large liquid markets like FX. Market authorities often contradict themselves by saying trends will continue when markets are bullish but admitting they have no idea about future movements when markets turn bearish or volatile.
- FX rates are influenced by human sentiment, which is capricious. While some macroeconomic factors may influence rates, commentators' choice of explanatory variables and failure to consider full market context leads to oversimplified understandings that may influence trader behavior.
- Financial markets involve thousands of intelligent agents whose motivations are partly hidden but sometimes manifest in predictable patterns related to herd behavior, risk management, and profit-taking. Markets may have nonlinear patterns that statistical models
Fasanara Capital | Investment Outlook
1. The Future Is Wide Open: Avoid The ‘Illusion Of Knowledge’ Trap
The single most dangerous thinking trap / optical illusion for investors today is to look at Trump, Brexit and Italy Referendum as non-events, buried in the past. We believe that 2017 may likely be driven by the same factors that failed to shape 2016. The non-events of 2016 are likely to be the drivers of 2017. Finally, we will get to find out if Brexit means Brexit, if Trump means Trump, if a failed Italian referendum means early elections and a membership of the EMU in jeopardy down the line.
2. Structural Shift: These Are Transformational Times
The macro outlook of the next years will be influenced the most by these structural trends:
› Protectionism, De-Globalization & De-Dollarization. In Pursuit of Inclusive Growth
› End of ‘Pax Americana’. The ascent of China. Geopolitical risks on the rise
› End of ‘Pax QE’. Markets without steroids, but still delusional.
› 4th Industrial Revolution: labor participation rate falling from 63% to 40% in 10 years?
3. Our Baseline Scenario: Bubble Unwind, Equities and Bonds Down
Starting this 2017, our major macro convictions are as follows:
› Global Tapering to progress
› US Dollar to keep grinding higher
› European Political Instability to worsen
› US Equities to weaken
The options market signals that investors anticipate higher inflation and interest rate hikes in the near future under President Trump. It also indicates that the downside risk to stocks is limited and that deregulation, tax cuts, and fiscal stimulus could spur stronger economic growth and higher corporate profits. Specifically, the options market sees industries like financials, industrials, technology, and consumer discretionary as benefiting most. Overall, the options market views Trump as understanding the importance of global trade and does not see him imposing severe sanctions on important trade partners like Mexico, China, and emerging markets.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
The document discusses investment strategies and thinking processes. It summarizes that good thinking is a lonely process that requires anticipating change correctly. It discusses how linear thinking can cause investors to miss opportunities for change. It provides examples from history where thinking on the margins helped identify opportunities, such as recognizing changes in technology stocks in the 1960s and interest rates in the 1980s. It analyzes current market conditions and predicts the odds of a new secular bull market are now 45-50%, though few investors currently believe this. It concludes that select market correlations broke down last week and economic reports imply tapering may be delayed, supporting stocks in the near-term.
The document summarizes the performance of the Western Reserve Master Fund for the first quarter of 2010. It rose 22.3% gross and 18.2% net, outperforming benchmarks. It also provides background on Charles Mackay's 1841 book "Extraordinary Popular Delusions and the Madness of Crowds" and discusses how recent economic events could be added to the book. The document then analyzes specific investments in the fund's portfolio, including Citigroup and Wells Fargo, focusing on their earnings power, cash flows, and valuation using a pre-tax, pre-provision income approach.
Vikram Mansharamani is an expert on financial bubbles who authored the book "Boombustology". He believes it is possible to identify bubbles before they burst by analyzing multiple factors, including macroeconomics, microeconomics, psychology, politics, and ecology. While impossible to time exactly when a bubble will pop, this "boombustology" approach helps gauge risk. Mansharamani remains concerned about the risks of bubbles in areas like Chinese real estate and corporate debt, and believes a crisis in China could significantly impact the global economy and commodity markets.
Fasanara Capital | Investment Outlook
1. Fake Markets: How Artificial Money Flows Kill Data Dependency, Affect Market Functioning and Change the Structure of the Market
Hard data ceased to be a driver for markets, valuation metrics for bonds and equities which held valid for over a century are now deemed secondary. Narratives and money flows trump hard data, overwhelmingly.
‘Fake Markets’ are defined as markets where the magnitude and duration of artificial flows from global Central Banks or passive investment vehicles have managed to overwhelm and narcotize data-dependency and macro factors. A stuporous state of durable, un-volatile over-valuation, arrested activity, unconsciousness produced by the influence of artificial money flows.
- Passive Flows: The Prehistoric Elephant In The Room
- ETFs Are Taking Over Markets
- The Impact of Passive Investors on Active Investors: the Induction Trap
- How Narratives Evolve To Cover For Fake Markets
- Defendit Numerus: There is Safety in Numbers
- What Could We Get Wrong
2. Be Short, Be Patient, Be Ready
Markets driven by Central Banks, passive investment vehicles and retail investors are unfit to price any premium for any risk. If we are right and this is indeed a bubble (both in equity and in bonds), it will eventually bust; it is only a matter of time. The higher it goes, the higher it can go, as more swathes of private investors are pulled in. The more violently it can subsequently bust.
The risk of a combined bust of equity and bonds is a plausible one. It matters all the more as 90%+ of investors still work under the basic framework of a balanced portfolio, exposed in different proportions to equity and bonds, both long. That includes risk parity funds, a leveraged version of balanced portfolio. That includes alternative risk premia funds, a nice commercial disguise for a mostly long-only beta risk, where premia is extracted from record rich markets that made those premia tautologically minuscule.
The document discusses the development of the Investment Rate, which aims to determine how much money will be systematically invested into the economy each year to define longer-term economic and stock market cycles. It describes how the author analyzed various economic data and theories before determining that the key factor was the life cycles of normal people. Through analyzing data on retirement planning, mortgage payoff timelines, and college education costs, the author was able to identify age 50 as the key "Kee Age" when normal people have both the means and motivation to begin investing aggressively for retirement.
The fund manager provides an update on the fund's performance in the third quarter and year to date. While the fund outperformed the S&P 500 in September, it underperformed for the quarter and year due to headwinds from cash holdings and short positions. The manager discusses lessons learned about maintaining target exposures and plans to increase long and short exposures going forward. He also plans to cast a wider net by potentially investing in foreign companies, such as recently establishing a position in Hyundai Motors preferred stock trading at a steep discount. While shorting has been painful, he believes the environment remains attractive for short sellers and plans adjustments to the short strategy including smaller position sizes and better matching long/short exposures.
- The fund rose 3.9% in September vs. 3.1% for the S&P 500. For the quarter, it declined 2.3% and is up 6.3% year-to-date, underperforming the S&P 500 which is up 5.2% and 19.8%, respectively.
- The manager held too much cash (20-40%) and not enough long exposure, aiming to be conservatively positioned. However, this was too conservative given the substantial short position and proved costly as the market rose strongly.
- Going forward, the manager will aim to maintain the target exposures of 100% long and 30% short, occasionally holding more cash/increasing the
The reason the world's economic slump continues is quite clear - people are spending less money than before.
The solution used by the world's central banks is to reduce the amount of money available to people to spend.
Irony or confusion? Take a pick. One thing is clear - investors are doing unusual things with their money, and unfortunately they are paying the price.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
How much should we worry about the chinese stock market collapseAmol Patil
- The Chinese stock market has fallen significantly over the past month, dropping 31.7% since July. The Chinese government has taken drastic measures to try and stop the falling stock prices.
- While a falling stock market in China could negatively impact the global economy due to China's role as a major trading partner and consumer of commodities, the exposure of Chinese households to the stock market is relatively low. Most Chinese households' financial assets are held in cash and bank deposits rather than stocks.
- The stock market crash reflects the fact that China's economic growth rate has been slowing in recent years after a long period of double-digit growth. The crash was likely exacerbated by the unsustainable rise in stock prices due to
The document summarizes several common investment myths, including that the performance of January predicts the performance of the full year, that the "Santa Claus rally" in December reliably occurs, that the S&P 500 performs best on Tuesdays, that copper prices can predict the economy, and that markets should be sold in May and avoided over the summer. For each myth, the document analyzes historical data and finds little statistical evidence to reliably support the strategies predicted by the myths.
Сегодня он успешно совмещает карьеру ученого, преподавателя, финансового консультанта и управляет инвестициями друзей и знакомых на фондовой бирже, используя технологию мониторинга новых медиа, собирающую и анализирующую настроения тысяч мелких и крупных экономических агентов. 27 ноября он рассказал об этом в центре Digital October.
http://digitaloctober.ru/ru/events/knowledge_stream_finansovyy_geniy
Western governments are hopelessly addicted to deficit financing while refusing to address looming funding issues - with apologies to the embarrassingly foolish Angela Merkel, politicians can no more successfully “battle” the markets than you and I can successfully “battle” gravity. Petrocapita is an investment trust built around the premise that demand for energy will continue to move prices higher over the long-term. Petrocapita was created to allow investors to add professionally managed oil & gas assets directly to their portfolios.
She adores hats. She is always very polite and respectful of others. She waves to everyone, and consistently avoids conflict. She is a lady; she is The Queen.
Without a doubt, Queen Elizabeth lives a life quite unlike everyone else in the World – after all, royalty does have its privileges. Yet, when it comes to investing, the Queen is swimming in the same pool of stock market sharks as us common people.
Like everyone else, she pours through her quarterly statements to see how she’s fared. And like everyone else, she loves to make money and simply deplores negative returns. It was rumored that the 2008 crisis hit her particularly hard – over USD 40 million in stock market losses.
This experience must have jilted something, as when The Queen was visiting the esteemed London School of Economics she asked the professor a rather “un-queen” like question – why did economists fail to predict the biggest global recession since the Great Depression?
The document discusses the current economic cycle and signs that the economy may be slowing down after nearly a decade of growth. It notes that while economic numbers have been strong, interest rates have risen several times in recent years and indicators like the CAPE ratio suggest the market may be overvalued. Rather than trying to time the market, the document recommends investors hedge risks by taking advantage of tax laws to protect assets and reduce downside if a market correction occurs.
The document discusses the need for ICT corporations to shift their focus from financial systems to economics in light of global economic shifts. It notes the job losses in the ICT sector, especially at Microsoft, and argues economics should guide business decisions more than politics. The US economy is analyzed and found to have significant debt issues, calling into question its status as sole world leader. The document advocates for ICT companies like Microsoft to assess local markets, focus on the bottom two thirds of consumers, and develop strategies guided by economic principles rather than just maintaining the same approaches.
This document provides an overview of All Star Financial, an independent fee-only financial advisory firm. It discusses the firm's services, investment philosophy, and approach to managing client portfolios. Key points include:
1. All Star Financial provides personal and corporate financial planning, investment management, and tax services. They manage client assets using mutual funds, ETFs, stocks, and bonds.
2. The firm's investment approach focuses on reducing risk and volatility through strategic asset allocation and diversification. They emphasize keeping what you earn over maximizing returns.
3. Examples from past economic cycles and market downturns illustrate why diversification and staying the course are important strategies during volatile periods. Panicking and making
How to protect and grow your investments during retirement. If you are retired and have funds invested in the stock market and if you want to live well in retirement and avoid unpleasant surprised down the road, this Survival Guide is for you. If you are like me, you would prefer to hold on to any GAINS and avoid LOSS of principle, receive investment GROWTH above the norm and enjoy greater financial SECURITY and peace of mind, support an independent, active LIFESTYLE. And leave a legacy. Here's how I plan to do just that.
This document discusses the 1st & Main Investment Advisors Q3 2016 newsletter. It summarizes that the advisors have taken a conservative approach to equity allocations since late 2015 due to market corrections. While slowly increasing risk again, they feel prepared if election uncertainty causes challenges. Historically, election results have little long-term impact on markets. The advisors recommend staying focused on goals and broader economic trends rather than election prognostications.
The Financial Crisis of 2008 was caused by a housing bubble fueled by excessive leverage and risky lending practices. As home prices declined and credit tightened, consumers and financial institutions were squeezed, resulting in a recession. While the recession may be longer than expected due to deleveraging, history shows that technological innovation and global trade will support long-term economic growth. To navigate the current volatility, investors should stick to their long-term plan and take advantage of opportunities while maintaining a diversified portfolio and emergency funds.
This document provides an introduction to a course on technical analysis and professional stock trading. It discusses that the course will teach how to determine market trends, forecast price targets and durations, and successfully day trade. It positions technical analysis as the focus, looking at price and volume data as reflecting all known information, rather than fundamentals. The document contrasts technical analysis and speculation, which can be professionally practiced, with gambling and fundamental analysis. It also references the influential trader W.D. Gann and promises the course will transmit his forecasting methods.
This document contains 9 lessons about investing and financial success. It discusses concepts like:
1) Compound interest is the most powerful force in building wealth over the long run.
2) Predicting short-term market movements is impossible, yet people continue trying. Investors should focus on long-term factors like earnings growth and dividends.
3) Doing nothing and avoiding unnecessary trading is often the best investment strategy. Reversion to the mean ensures outliers are temporary.
Guy Haselmann provides commentary on his transition to OpenDoor Trading and his views on U.S. Treasuries. He believes technical factors have dominated Treasury markets in recent years more than fundamentals. The bifurcation between on-the-run and off-the-run Treasuries is damaging price discovery. He expects long-dated Treasuries to hit new low yields sooner than expected due to factors like central bank bond buying programs and capital flows into positive-yielding U.S. debt. Haselmann also shares his views that the U.K. will remain in the EU after the upcoming referendum and that political fear may be trying to prevent setting a precedent for exiting the EU.
Michael Durante Western Reserve spring 2010 reviewMichael Durante
The document summarizes the performance of the Western Reserve Master Fund for the first quarter of 2010. It rose 22.3% gross and 18.2% net, outperforming benchmarks. It also provides background on Charles Mackay's 1841 book "Extraordinary Popular Delusions and the Madness of Crowds" and discusses how recent economic events could be added to the book. The document then analyzes specific investments in the fund's portfolio, including Citigroup and Wells Fargo, focusing on their earnings power, cash flows, and valuation using a pre-tax, pre-provision income approach.
The Western Reserve Master Fund rose significantly in Q1 2010, outperforming benchmarks. As of late April, the fund's year-to-date return was 40.1%. The document discusses Charles Mackay's 19th century book on economic bubbles and irrational behavior. It argues the recent financial crisis would make a good addition to Mackay's work. Several bank stocks, including Citigroup, are highlighted as attractive long investments due to inaccurate fair value accounting and an improving credit outlook.
- Clinton delivered a State of the Union address in 2000 touting strong economic indicators, but markets soon collapsed into the worst decade in 80 years.
- Obama's 2010 State of the Union acknowledged economic struggles of high unemployment and falling home values since the recession. Stocks then surged after his speech.
- Most individual investors perform poorly despite believing they are above average. Cognitive biases, inability to predict the future, and lack of patience often cause investors to make suboptimal decisions.
Michael Durante Western Reserve 2009 review and 2010 outlookMichael Durante
- The document provides an annual review and outlook from 2009 to 2010 for a financial services fund.
- It summarizes that the financial crisis created significant investment opportunities due to delays in government action and uncertainty, but that credit losses were not as severe as feared.
- It argues that mark-to-market accounting exaggerated fear and losses during the crisis, but that bank fundamentals have significantly improved along with credit performance, leaving financial stocks still undervalued.
Michael Durante Western Reserve 2009 review and 2010 outlookMichael Durante
- The document provides an annual review and outlook from 2009 to 2010 for a financial services fund.
- It summarizes that the financial crisis created significant investment opportunities due to delays in government action and uncertainty, but that credit losses were not as severe as feared.
- It argues that mark-to-market accounting exaggerated fear and losses during the crisis, and that bank stocks remain undervalued relative to fundamentals now that the crisis has subsided and losses were not as bad as estimated.
The retail environment is complicated, challenging and in many ways foreign. Think about viewing the retail environment through a prism. What used to be one homogeneous beam of light that large scale retailers and CPG companies could scale against has become a fractured spectrum of colors. No one really knows which color to chase first or how to take systems that were focused on a single beam and adapt them to chase more than one.
The document provides a seasonal market outlook and review of global markets in Q4 2014 and for the year as a whole. Key points:
- Global stock markets fell sharply in mid-December due to falling commodity prices but recovered by Christmas. The FTSE 100 ended 2014 down 2.7%.
- Mining stocks and food retailers struggled while utility companies performed well, benefiting from growing demand for income and declining rate expectations.
- Commodity prices are expected to remain weak in 2015 due to slowing demand from Europe and China and increased supply, particularly of oil from US shale production.
MNK Employees vs. Company 9/6/2017 Lawsuitquoththeraven
This document is a complaint filed in the United States District Court for the District of Columbia by Robert J. Solomon on behalf of Mallinckrodt Pharmaceuticals Employee Stock Purchase Plans. The complaint names Mallinckrodt PLC and several of its directors and officers as defendants. It alleges that during 2014-2017, defendants made false and misleading statements about Acthar, Mallinckrodt's key drug, which generated 34% of sales in 2016. Specifically, defendants failed to disclose Acthar's monopoly was due to anticompetitive practices and the drug's reliance on Medicare/Medicaid reimbursements, exposing Mallinckrodt to regulatory risk. The complaint seeks damages for losses resulting from declines
Herbalife: A Devastatingly Perfect Storm that Could Send Shares Under $30 Thi...quoththeraven
The document discusses how a perfect storm of negative events could send shares of Herbalife under $30. These include: 1) An upcoming documentary called "Betting on Zero" that has been underestimated and could cause a PR nightmare through emotional personal stories of victims; 2) Carl Icahn potentially exiting his position before the documentary's release or upcoming FTC sanctions in May; 3) Deteriorating growth in China, Herbalife's largest market, and questions around a new China joint venture. The author believes the stock could drop significantly from its current $53 price due to these factors unfolding in the coming months.
Journal of hepatology association between consumption of herbalife nutritio...quoththeraven
This document summarizes a study that identified an association between consumption of Herbalife nutritional supplements and acute hepatotoxicity (liver damage). The study identified 12 patients in Israel with unexplained acute liver injury who had been consuming Herbalife products. 11 patients were female, average age was 49.5 years. Liver biopsies showed signs of active hepatitis and inflammation. Three patients had a second bout of hepatitis after resuming Herbalife products. The study calls for further evaluation of Herbalife products for potential hepatotoxicity and cautions consumers, especially those with underlying liver conditions, until more is known.
The document summarizes the outcome of an FTC settlement with Herbalife and the subsequent market reaction. Key points:
- Media reports initially claimed the FTC said Herbalife was not a pyramid scheme, but the FTC chair stated this was inaccurate and the settlement does not make that determination.
- Carl Icahn's statement filing with the SEC claiming the FTC found Herbalife was not a pyramid scheme may have been misleading and violated securities laws.
- While the settlement does not use the word "pyramid", the FTC complaint is largely in line with their definition and past cases against pyramid schemes. The outcome creates uncertainty around how Herbalife will be impacted long-term.
Herbalife: Media Materially Misstates FTC Outcome, Icahn Files Potentially Qu...quoththeraven
• FTC Commissioner Ramirez stated during Friday’s 10AM press conference that press reports claiming the “FTC confirmed Herbalife to not be a pyramid scheme” were inaccurate
• The misleading statement that “the FTC concluded Herbalife was not a pyramid scheme” was in an early morning Carl Icahn press release, subsequently filed with the SEC in a 13D/A
• MLM attorney and advocate for the industry Kevin Thompson stated that this settlement “does not represent the end of the FTC process with Herbalife”
• Adamant Herbalife long John Hempton noted on his blog and on Twitter that “If Herbalife is a pyramid scheme, the conditions imposed will cause it to collapse”
• Substantive risk remains as FTC and Pershing Square engage international jurisdictions with the agency’s findings and the SEC concludes its investigation into the company
Corker - Annual report for calendar 2014quoththeraven
The document is an annual report filed by The Honorable Robert P Corker Jr. for calendar year 2014. It lists various assets owned by Corker and his spouse including real estate holdings, investment accounts, mutual funds, and other securities. The total value of the assets is over $5,000,000. It also lists 12 stock sales made in February and May 2014.
1. Plaintiff Charles Erhart filed this complaint against Defendant BOFI Holding Inc. for whistleblower retaliation and related claims.
2. Erhart was hired as an internal auditor for BOFI and found several violations of law during his audits, including failure to notify individuals of recorded phone calls and untimely deposits to employee 401k accounts.
3. When Erhart attempted to document these findings, he was threatened and instructed by BOFI executives not to put violations in writing or to remove or hide evidence of wrongdoing. Erhart's job performance evaluation was later downgraded in retaliation for documenting issues.
The document is a memorandum from attorneys at the Federal Trade Commission to a United States District Court providing supporting documents and transcripts for a motion seeking a temporary restraining order against Vemma Nutrition Company and several individuals related to the company for allegedly operating an illegal pyramid scheme. The memorandum includes a table of contents listing over 30 exhibits and transcripts to support the FTC's claims against Vemma.
In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
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Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...
Chris Irons - Quoth the Raven Research - "Short the Whole F***ing Thing" Slides, May 3, 2018
1. Short the Whole F***ing Thing
Going Long Gold to Be Short the Government’s “System” and
Why I Have No Faith in Monetary Policy in 15 Minutes or Less
Christopher Irons
Quoth the Raven Research, LLC
GeoInvesting, LLC
cirons@geoinvesting.com
quoththeravensa@gmail.com
Twitter: @QTRResearch
Twitter: @GeoInvesting
May 3, 2018 – The Art of Short Selling
2. Introduction
• It’s easy to be a short seller when you’re a skeptic and/or cynic by nature
(growing up in a household with a low bullsh*t tolerance also helped)
• Some people choose individual companies to short
• While I also do this, I’m equally as skeptical about our government, our
Federal Reserve and Central Banking policy globally
• Driving policy based on spending and consumption instead of saving and
underconsumption simply doesn’t make sense to me – not how I was
raised
• Best way to position against the system: own gold
May 3, 2018 – The Art of Short Selling
3. Gold vs. Government 30 Second Overview
Gold:
1. Finite supply
2. First used as money ~3000 years ago
3. Used to back the U.S. dollar until
demand for gold redemptions became
too overwhelming
4. Still held in reserve by Central Banks
5. History of holding its value
6. Hedge against inflation, global
uncertainty, instability and basically
any type of economic/monetary
catastrophic situation you don’t think
about on a daily basis
Government:
15 days ago sends my
friend, who is a mailman, a
heat advisory while he’s
delivering mail in Buffalo.
The temperature was 36°F
outside.
May 3, 2018 – The Art of Short Selling
4. Shorting “The System”
• To me, shorting “the system” means being diversified properly so in the event of a
significant United States based (or global) economic crisis, currency crisis, sovereign
debt crisis or crisis of monetary policy or economic theory, you’ll be hedged or poised
to benefit – owning gold covers all of these scenarios
• Many people carry “systemic hedges” as a very small weighting or small percentage of
capital – if at all. The Siegels and Buffetts of the world will tell you to be 100% in
stocks at all times and to buy all dips.
• This isn’t necessary, it isn’t diversification, it requires no thought, in my opinion it’s generally insane and it’s a
strategy only applicable to a Fed-insured rigged market that only goes up – like ours
• My idea is to be overweight systemic hedges at all times – they don’t have to
dominate your portfolio, but keeping a double digit weighting of capital in gold, silver
and commodities like oil is a serious way to hedge against the system and the dollar –
these are all things that Central Banks can’t print more of
May 3, 2018 – The Art of Short Selling
5. Is Now a Good Time to Short “the System”?
• As long as the government is in charge, any time is a good time
• Just think about the last thing you dealt with involving government – the DMV? the VA? the Post Office? the Healthcare
Marketplace? the Tax Code? Was it efficient and pleasant? How about the IRS computers going down on tax day this year,
reportedly affecting over 30 million returns?
• Like many bubbles of years past, our economic system as it exists today is mostly a confidence
game based on confidence in our monetary policy and the U.S. dollar
• Global currencies are backed by the U.S. dollar, which is backed by – well, nothing.
• Monetary policy has undergone a drastic shift over the last few decades with nearly no historical track record to back it up
• Monetary policy has a ridiculous focus on deficit spending and consumption versus savings and
underconsumption
• You don’t need to be a PhD – think back to your first “savings” account as a kid. What was the point? Debt and spending?
• We’re arguably at the top of a 10 year bull market in equities, the VIX appears to have woken
up for first time in 10 years
• Our current President – love him or hate him – is unpredictable and will guarantee further
volatility
• Oh, and we’re running TRILLION dollar deficits globally at an economic peak! Fun!
May 3, 2018 – The Art of Short Selling
6. Meet Your “System”
• Insane monetary policy/regulation that is anything but free market capitalism
• Bond markets and equity markets worldwide are rigged by Central Banks
• Trying to curb short sellers is the first step for the U.S. to turn into Japan
• Government regulates (interferes with) basically everything except what dipping sauces FINRA
registered brokers are permitted to use for their chicken fingers at lunch (could happen in 2019)
• Meanwhile, the government can’t cut spending, as both sides of the political aisle
consistently promise
• Bi-partisan jackassery ensures that more money will be printed as a “solution” and the debt ceiling will
need to continue to be raised
• The system encourages privatizing profits and socializing losses
• This is why the 2008 TARP money went to banks and not into your wallet
• At some point, the bailout “solution” will be a “problem” – and then we won’t
have a solution – could be weeks/months/years/decades from now
May 3, 2018 – The Art of Short Selling
7. Pay Attention When the “Herd” Says You’re Crazy
• Trust me, being long gold and/or shorting “the system” is the last thing people
want to talk about 10 years into a euphoric bull market, which makes it even
more appealing to me.
• Few people have the fortitude or common sense to point this out – Peter Schiff
and Bill Fleckenstein are two notable names. Neither is a regular in fin media
• Last time Fleckenstein was on CNBC, Tim Seymour insulted him for being long gold
• Peter Schiff predicted the 2008 housing crisis, was literally laughed at on air while doing so
• The more people that say the “timing is crazy,” the more necessary I believe
this line of thinking is – sure, it may not happen, according to economists and
analysts but…
• …the sayings “It can’t happen” and “It won’t happen” remind me of some of
my favorite quotes…
May 3, 2018 – The Art of Short Selling
8. "At this juncture, however, the
impact on the broader economy
and financial markets of the
problems in the subprime market
seems likely to be contained. In
particular, mortgages to prime
borrowers and fixed-rate mortgages
to all classes of borrowers continue
to perform well, with low rates of
delinquency."
- Ben Bernanke on Housing, March
2007
May 3, 2018 – The Art of Short Selling
9. What About the Fed/Regulators/Economists?
May 3, 2018 – The Art of Short Selling
10. What About the Fed/Regulators/Economists?
May 3, 2018 – The Art of Short Selling
11. Other Great Quotes in Economist/Analyst History
• Former National Association of Realtors chief economist David Lereah published a book called
"Why the Real Estate Boom Will Not Bust—And How You Can Profit from It" early in 2006. It
has not aged well.
• In August 2007, Joseph Cassano, who ran insurer AIG's financial products division, said he
couldn't see AIG "losing one dollar in any of those (credit derivative) transactions." AIG was
bailed out in 2008.
• In December 2007, Goldman Sachs chief investment strategist Abby Joseph Cohen suggested
the S&P 500 would hit 1,675 by the end of 2008, a climb of 14% — it actually ended below
900.
• “Two brokerage firms - RBC Capital Markets and UBS Warburg -- just downgraded Enron from
a Strong Buy on Wednesday, after the stock already had fallen from a 52-week high of $84.87
to $4.14. Thanks for nothing.” – CNN Money, 2001
Sources: Reuters, Business Insider
May 3, 2018 – The Art of Short Selling
12. The Fed’s Answer to Any Problem?
But remember: QE hasn’t “worked” unless we
can unwind the stimulus and still be better off
than we would have been.
"The U.S. government has a technology, called a printing press (or today,
its electronic equivalent), that allows it to produce as many U.S. dollars
as it wishes at no cost.”
– Ben Bernanke, November 2002
May 3, 2018 – The Art of Short Selling
13. Why does this happen over and over?
May 3, 2018 – The Art of Short Selling
14. Herd Mentality and Fear of Being Wrong
“If everyone is thinking alike, then somebody isn't thinking.”
― George S. Patton Jr.
“A bad conscience is easier to cope with than a bad
reputation.”
― Friedrich Nietzsche
May 3, 2018 – The Art of Short Selling
15. More Great Quotes in Analyst History
Adam Jonas, Morgan
Stanley price targets and
corresponding 2018
adjusted EPS estimates
for Tesla.
DO YOUR OWN WORK –
These analysts will not
save you!
May 3, 2018 – The Art of Short Selling
16. The Analyst I Listen To
“Trust your own judgement, live with it and love it.”
– Nas
May 3, 2018 – The Art of Short Selling
17. Instead, Economists Ignore Nas and Are Buying
Each Other’s Bullsh*t
“I am entirely sympathetic to the efforts of the Fed,
this is a very hard time. But you should know that I
am biased, because before he was promoted, Ben
Bernanke was the Chairman of the Princeton
economics department.”
- Paul Krugman 2008-09
May 3, 2018 – The Art of Short Selling
18. Results of Economist/Analyst Confirmation Bias
• Majority of economists and analysts all think the same
• Everyone continues to wind up trusting “the system” without looking at
it critically – ever
• Regardless of whether or not the unthinkable happens, this is
dangerous
• No one talks about, or pays attention to, the fact that our monetary
policy is an unprecedented experiment – the outcome of which
continues to remain unknown
• Whistleblowers can go ignored (see: Harry Markopolos)
May 3, 2018 – The Art of Short Selling
19. Maybe the Government Will Catch On – Or Not…
• Madoff – $65 billion fraud
• Enron - $60 billion market cap (adj. for inflation ~ $88 billion today)
• WorldCom – inflated assets by $11 billion
• Chinese Reverse Mergers – over $15 billion in fraud uncovered
• Theranos - $9 billion valuation wiped out
• Lehman – hid over $50 billion in loans disguised as sales
• Waste Management - $1.7 billion in fake earnings
• Tyco, Volkswagen, Autonomy, Nortel, WaMu, Bear Sterns, Bre-X (Canada),
etc. etc etc.
May 3, 2018 – The Art of Short Selling
20. Long Gold to Short the System
• Gold as a store of value versus the U.S. dollar (other commodities similar)
• A store of value is the function of an asset that can be saved, retrieved and exchanged at a later
time, and be predictably useful when retrieved. More generally, a store of value is anything that
retains purchasing power into the future. It is finite in supply, unless the U.S. dollar printing press.
“…at no cost”
- Bernanke, 2002
May 3, 2018 – The Art of Short Selling
21. Long Gold to Short the System
Measured in U.S. dollars, it’s clear that gold has maintained its purchasing power
May 3, 2018 – The Art of Short Selling
22. Economists Downplay Gold But It’s Held in Reserve…
• Easy question: if gold isn’t that important – as economists and financial pundits
sometimes say - why do the world’s central banks still hold it in reserve?
• To manage risk
• To promote stability
• To hedge against the USD/inflation
• To hedge against “the system”
• Do the same in your portfolio.
The same economists telling us that
gold isn’t money are the ones shilling
for the central banks that are buying.
May 3, 2018 – The Art of Short Selling
23. How To Own It?
• Having exposure to bullion is best, if you have the means
• You don’t want to be stuck holding GLD or some gold ETF or gold related stock if there’s going to be a
systemic shock
• If the owner of your gold ETF is smacked hard during systemic shock, you’re now officially holding
shares of The Weinstein Company or Theranos instead (read: $0).
• Depending on your level of tin foil hattery, you may seek to purchase gold that is held in a vault either
in the U.S., or outside of the U.S. (Switzerland is popular & highly regarded as safe)
Riskier Less Risky
Gold miner stocks Gold ETFs Gold futures Physical Bullion
Investment Vehicle
Alex Jones Conspiracy Meter
May 3, 2018 – The Art of Short Selling
24. The “Pain of Short Selling”
• When you speak up against the “herd” everybody usually will tell you
that you’re wrong about everything
• You’re often viewed as the “bad guy” by people who don’t understand
what you’re talking about or people who are charged with just coming up
with hot takes (see: financial media)
• You have to get the facts, timing AND the psychology of the market right,
or you will get your head crushed in like I did on:
• Questcor/Mallinckrodt – right thesis, was 3 years early (cc: David Einhorn, Andrew Left)
• Herbalife – still think facts are correct, stock thinks otherwise
• Green Mountain Coffee – bought out at nearly 100% premium and shortly thereafter wrote down
the Keurig Kold, one of the main reasons I was short
May 3, 2018 – The Art of Short Selling
25. The “Pain of Short Selling”
• “Brain damage” - companies that don’t like the truth will sue you, hire
private investigators or “business intelligence” firms to perform counter-
intelligence/spy on you
May 3, 2018 – The Art of Short Selling
26. The “Art of Short Selling” & Lessons
• You absolutely must trust your own research & instincts
• Your research must be 100% error proof and rock solid, backed by facts
• You must be ready for psychological twists and turns
• Must have the fortitude to swim against the current & take on major risk
• You have to be nuts - as Marc Cohodes says “have a genetic defect”
• Next time a short seller/skeptic speaks, you don’t have to agree, but it’s
probably worth it to at least listen and consider
• Billions in U.S. listed China based fraud uncovered by short sellers
• Harry Markopolos blew the whistle on Madoff years before he went bust, no one listened
• Austrian based economist Peter Schiff predicted the housing collapse
May 3, 2018 – The Art of Short Selling
27. Thank You
Christopher Irons
Quoth the Raven Research, LLC
GeoInvesting, LLC
cirons@geoinvesting.com
quoththeravensa@gmail.com
Twitter: @QTRResearch
Twitter: @GeoInvesting
May 3, 2018 – The Art of Short Selling