Not a taper tantrum but something

Properly used, Corporate Bond ratings are effective tools helping marketing participants to understand risk and return. Simply put, as riskier assets will have lower ratings, and must provide an increase return to investors to entice them to purchase the assets. In other words, “the higher the risk the higher the return”.

The chart [...]

Second quarter 2012 and how is the market doing?

US stock market – sector breakdown, YTD ending Q2 2012

As we move into the final trading days of Q2 2012 I thought it would be interesting to look back and see how each of the major market sectors has performed year to date (YTD). The chart above shows the eight winning and two [...]

The January effect, 1950 to 2011

S&P 500 – January 3rd 2012 to January 12th 2012, daily close

The first two weeks of 2012 trading are almost complete so its time for a status check. As the chart above indicates the S&P 500 so far is up roughly 3%, so short of a sharp correction in New York today (possibly, [...]

Just in time for the first trading day of the year …

2012 Dogs of The Dow – note JPM can be dropped if you’d like to avoid exposure to the banking sector

A wide variety of trading strategies have been introduced over the years in an attempt to beat the market. Dogs of The Dow, popularised by analyst Michael O’Higgins in his 1991 investment [...]

Small caps setting up for The January Effect?

The equity markets in 2011 have been a mess, overall both small cap and large cap stocks have lost money YTD but large caps have lost less (-2.36% for large caps compared to -6.51% for large caps. However the chart above shows small caps ($RUT) outperforming large caps ($SPX) over the past ten trading [...]

America and China’s curious relationship

The chart above shows monthly returns on The Shanghai Composite Index (black line) compared with US Imports from China (red line). The table below presents correlations of the two series, first month on month and then with increasing monthly lags i.e., one month lag, two month, etc. We can see that month on month [...]

So far in 2011, bonds have soundly beaten stocks

The US 30Y Treasury opened at 121.95 on January 3rd 2011 and closed at 141.29 on December 9th 2011, for a YTD gain of 15.85%.

The S&P 500 opened on January 3rd 2011 at 1271.87 and closed on December 9th at 1255.19, for a return of -1.31%.

With roughly three weeks to go, short [...]

Bonds Beating U.S. Stocks Over 30 Years for First Time Since 19th Century

An interesting article but a little misleading – they’re talking about gains in bonds that you’d only realise if you were actively trading the securities. If you’re a buy and hold investor (not a trader) lots of these same bonds are priced at a premium. I’m still buying shares myself and will continue to [...]

Groupon mulls raising IPO price

OMG Groupon again!

I’d like to think that people wouldn’t be fooled by this crappy company but I’ve been on the street long enough to know that the guys underwriting this POS know what they’re doing – this IPO will be two things: a hype machine and a wealth destroyer. AVOID.

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Sin stocks are where it’s at

nobody makes money from so-called “ethical investing”.

Just look at the returns of the S&P 500, The Vice Fund (they invest in alcohol, tobacco, firearms, gambling and nuclear warfare, yes indeedy) and the Social Index Fund (DSFRX) over the past seven years