Category: Markets

Optical Illusions

In August 1987, the Nasdaq 100 was extremely overbought. In July 1998, the Nasdaq 100 was extremely overbought. In January 2000, the Nasdaq 100 was extremely overbought. In October 2007, the Nasdaq 100 was extremely overbought. The Nasdaq 100 is extremely overbought today. Sell everything? If only it were that simple. When looking at the […]

Bitcoin and the Greater Fool

“It is the peculiar quality of a fool to perceive the faults of others and to forget his own.” – Marcus Tullius Cicero Would you pay $110 for something that’s only worth $85.73? What if you owned something worth $85.73 and you could sell it for $110?  Would you hold on to it? These probably […]

Valuation and Volatility

U.S. stock valuations are rising. One way to measure that is the CAPE ratio, which smooths earnings over a ten year period. This ratio for the S&P 500 hit 28.7 this week, which is in the 94th percentile going back to 1928. The only periods in history with a higher CAPE ratio were July through […]

Volatility and Mean Reversion

“Don’t confuse lack of volatility with stability, ever.” – Nassim Taleb Volatility is low. How low? Over the past month, the Dow Jones Industrials Average has traded in a range (from high to low) of 1.4%. Going back to 1970, that’s the least volatile period in history. At 2.2%, the same range for the S&P […]

Make Normalization Great Again

“Maybe your weird is my normal. Who’s to say?” – Nicki Minaj I’ve had numerous conversations with financial advisors over the last several weeks about the current state of markets and thoughts on asset allocation in 2017.  Many of these advisors who use our strategies believe that it’s going to be another strong year.  We […]