it is his signature…
‘THE PUTS HAVE EXPIRED’: Morgan Stanley warns that neither trade nor the Fed can save them now
“We think many have been misinterpreting the signals from the market to be a bullish signal for growth when in fact the market has been signaling since April that growth was likely to disappoint,” Wilson writes.
“The S&P 500 is the most defensive, highest quality and liquid stock market in the world, so if it is outperforming strongly, it is likely a bad sign for future growth. The dramatic underperformance of the small cap Russell 2000 and cyclical sectors all year was a clear indication that things were not improving, nor were they likely to this year.”
Also have a look at Figure-4 of the article: Cyclical / Defensive Stock Ratio.
This is similar to “Market Timing by Performance of the Hi-Beta and Lo-Beta stocks” which switched from equities to fixed income on 12th August.
https://imarketsignals.com/2016/profitable-market-timing-using-performance-of-the-hi-beta-and-lo-beta-stocks-of-the-sp-500/
This indicator was brought to our attention by Andreas Himmelreich (judgetrade) 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. Subsequently Steve Auger (InspectorSector) provided an algorithm to model this on Portfolio 123. This is all on the Forum.
Andreas how is your 5-stock portfolio doing?
Sorry, if I am the only one who does not know this, but what is the under followed seeking alpha list? Is there a list available?
Here is the link to the lists. It may not work for you if you are not a contributor to SA.
https://seekingalpha.com/account/authorboard/payment_calculator
Yes LOL
Michael Burry, of The Big Short fame, thinks there is a “bubble” in passive investing and ETFs that skews towards large cap companies and small value cap companies are being neglected.
Yeah, its been trending that way for a while now. Its part of my explanation for why small value and foreign stocks are getting hammered. Hasn’t yet reversed course though. It will in time.