Pretty cool bull case!

Research
94

Hi Andreas,

In what I’m tracking for economic indicators I have several things flashing yellow and overall am in a cautious but invested state. But do have one component that’s in the “red zone” right now: Intermodal Rail Traffic. It’s been maxed out since May for me.

Probably the #2 factor that’s at a middling concern level is Industrial Production

But lots of other things look fine, so there’s positives balancing things out too.

edit: added image of what the econ tracker looks like now

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95

Watch the Unemployment Rate, currently 3.7%.
If the November rate is 3.9% (to be reported on 12/6/2019) then my UER model will signal the next recession.
Since 1948, for 11 recessions, the signal would have provided a max lead time of 21 weeks, and a minimum lead of -13 weeks (late signal), and an average lead of 2 weeks.
https://seekingalpha.com/article/4290145-unemployment-rate-signal-recession-update-september-5-2019

So I am not so sure about a “Pretty cool bull case!”.

Andreas, your own Beta indicator (when Hi-Beta stocks perform better than Lo-Beta stocks the model signals investment in the stock market, otherwise investment in bonds) is currently in fixed income since 8/12/2019.

This indicator was brought to our attention by Andreas Himmelreich who noticed that it correlated well with his 5-stock portfolios, e.g. when high beta stocks were doing well, his portfolios went up in value, and otherwise it under-performed. (It’s all on the forum if you care to search.) So how is this portfolio performing lately?

96

high beta 5 Stock ports are doing very badly :wink:

a 0.2% uptick in unemployment would be a huge miss and of cause a big hit to nearcasting recession modells…

Lets see how things develop, so far Iam Long and my strat is adding stocks…

97

Thanks Andreas keeping us informed. Your high beta model’s performance confirms the Beta-Timer’s signal.

98

Hi Georg and Andreas,

From Georg’s reference to Andreas’ High-Beta model, I wonder if this is a publicly viewable model? If so, I would appreciate a link. I couldn’t find it from searching. Thank you.

Also, I am curious why the email links for all members have disappeared from our profiles? For years, one P123 member could contact another privately to ask a basic question such as the one I just asked. It seems rather wasteful – in terms of space and distraction from the primary subject – to use a forum post to ask a simple question like the one I just asked when it could be asked privately (and the thread can stay on the subject).

When we could contact one another, I always welcomed messages from other P123 members – and that capability actually enabled the formation of some excellent, long-term friendships that I value highly. Please bring it back (or let us know a good reason why it was removed)! Thank you.

Chris

99

This will be fixed on Monday. The removal was inadvertent.

100

ATHs, Just saying :wink:

101

ok, lets get real:

hedgeye calls quad3 (gdp slowing, Inflation rising) for the 4th quater 2019.

Those guys are Pretty good, recommend the Webcast.

Also they helped me in bettering my trading Systems.
I put Quality in my ranking System and at the same time Industry Momentum and I got to tell you
it worked “Wonders”, especially I was able to add to the volumne filter (e.g. the System now picks more
liquid stocks even with better Performance then my old one with less liquidity).

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Hedgeye Call.jpg
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102

https://www.youtube.com/watch?v=ht8BeyhQKPc&feature=emb_logo

Very good video on why we are mid cycle and why the best is in front of us!!!

So if (and only if) your modells tell you to stay long, be brave :slight_smile:

Best Regards
Andreas

Best Regards
Andreas

103

Some interesting data comparisons in his charts. We shall see in 2029 how much they are worth :slight_smile:

104

Andreas,

For Industry Momentum, I been exploring PE expansion. For me it’s Momentum expressed via Sentiment.

Here are a couple of possible implementations;

  1. FMedian(“PEExclXorTTM”,#Industry)/FMedian(“PEExclXorPTM”,#Industry)

  2. FMedian(“PEExclXorTTM/PEExclXorPTM”,#Industry)

I use the first expression.

You may also want to experiment with;

FMedian(“ProjPENextFY”,#Industry)/FMedian(“ProjPECurFY”,#Industry)

Walter

PS Higher is better when used in a ranking system

105

Hi Walter,

I try it out, thank you!!!

Best Regards

Andreas

106

ATHs, just teasing :wink:

107

Again ATH, this gets really scary…

Opinions on the market?

108

It is a bit scary. Especially with several of my holdings reporting earnings this week; ROKU, PERI and VERU. Opened a small short position on the QQQs.

Walter

109

same here, not easy to follow your model in that teflon market…, lets see…

110

Most of my Models have Adaptive Allocation across uncorrelated Assets. Conservative Portfolios are 80% hedged with Bonds and Gold. Aggressive portfolios are 60% hedged with bonds and gold. The models are very conservative at this point in time. The Nasdaq is highly extended from it’s MA(50). Usually this signals a correction is coming soon. Time will tell if this was a good choice to Hedge so much of maybe I am leaving money on the table.

111

Do you hedge with gold and bond call options? That’s what I do, but somewhere around 50% coverage.

112

I use ETF.

I hedge with GLD, TLT, UGLD, TMF, GSY, TIP and a Bond rotational strategy. I have experimented with SH but unless 2008 comes back you lose Alpha.

113

I reiterate my secular bull case for the USA!

This is not the time to be bearish after a 20%, but bullish!

(Everybody waited for a pullback, but when it happens everybody is too scared to buy, that is exactly what happens now!)
2018 lows 50/50, but I do not believe in a 2008 Scenario (10% chance).
https://twitter.com/DavidTaggart/status/1237409350722838540

The Russell 2000, the weakest index of the big three was basically already at the 2018 lows, which is a good sign!
The chop from here will be painful but looking out 12-18 Months I am very bullish!
The Nasdaq is showing Relative Strength which is constructive!

The 30 Year Bond is above 65 Price / Earnings, that prices (today!!!) in a -3 to - 4% Deflationary period, that would be a -4% to – 5% hit on inflation, in my view, that is very unlikely.
https://twitter.com/crossbordercap/status/1237006307925864449 (is based on a 150 Year backtest!)
Also watch Buffets remarks on Bonds (he basically states a bond bubble!).

There are big successes in China taming (they are closing down emergency hospitals!!!) the virus, US Military just made a deal with a pharma company on a treatment drug.

Any positive news will pop the market:
The market did respond yesterday positively to good news (Trumps remarks, not being political here).
Also, we did test (almost twice!) the lows yesterday and the tape was very constructive:

Tanker stocks (!) popped big time and small cap hyper growth (pure estimates Ranking) too (when they start to track the pop, thats constructive!)
https://finance.yahoo.com/quotes/AGLE,ATTO,AXTI,CERC,CNTY,CRVS,EPIX,EVLO,HBIO,HROW,LAWS,LINX,LIQT,LMB,LMNR,MCHX,MCRB,NLNK,NNA,PHX,RCKY,SBOW,SMED,STKS,TUSK,UEPS,USAK,VIST
Also see my TA on Twitter: https://twitter.com/GfI_Himmelreich/status/1237634936032632833

Do not look at this Ceteris Paribus: There will be action (QE, Interest Rates Lowering, Deficit Spending, Treatment, Vaccine etc.) to handle this V-Crisis and the Oil Bust (US will take action to defend US Oil industry, independent who will win the election!).
Banks are much better equipped, same with households (this is the ONLY Expansion of the US where US households deleveraged!).
O.k., Corporate and Gov dept looks terrible, but this is better to handle as bank and a private overleverage (if that would be the case a 2008 scenario would be likely).

Also look at the sentiment of this board, it has never been more scared then today. Same with me! That means something, as humans we are bearish, when we should be bullish and the other way around.

If you trade money that you do not need the next 5 Years and your aim is total return, then this is not the time to hedge extensively (maybe a cheap fat tail hedge, but not for example a TLT Hedge) or to sell.
This is the time to be cool.

Best Regards
Andreas