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Showing posts from November, 2013

Nov 23 2013 – Weekend Market comment

Nov 23 2013 – Well things are pretty much the same as last week. The market is strong and money continues to flow into equities based on the TINA effect. The Dow Jones industrial average closed above 16,000 points for the first time and the Standard & Poor’s 500 index closed over 1,800 points.

There is a rotation in to smaller cap stocks, and regional banking is doing better. In other words it is a bull market and this coming week looks to continue the party.

The problem with investing in the stock market is that most amateurs don't feel safe until the market has already gone up. The safer you want to feel, the further it has already gone up, and the later you are to the party. Most investors are starting to buy right now and are starting to make a little money. But in the not-too-distant future, the market will start to come back down because this increase in prices is not sustainable. In short the little guy buys at the top.

So remember the market is a game of musical chair…

November 17 2013 Weekend Market comment

November 17 2013 – Honestly I am not very confident writing this comment this week and I am not going to give an firm advise because I am not really sure how this will end. The stock market, which has been melting up most of this record-breaking year, is on the cusp of achieving a troika of major milestones. Dow 16,000 is within easy reach for the first time. The Standard & Poor's 500 is fast approaching 1,800. And the Nasdaq composite is nearing 4,000 for the first time since the dot-com bubble burst in 2000.
But milestones do attract the attention of mom and pop investors, including many who might feel pressured to get in the market after missing out on the gains because they've been on the sidelines. They also put fear in many fund managers. I think in the coming few days we hit those numbers and rest for a while. This is not the time to put new money to work.
Keeping up with the market has been tough. The S&P 500 is up 26.1% in 2013 and notched 36 record closes a…


Nov 13 2013 - Ok so why did I buy TBT a few weeks ago and now I am on the sidelines, but planning ot return, what is the point? Well the short answer is bonds go down in value when they are replaced by newer bonds that have a higher interest rate. So bonds are a good thing to own when rates drop (like the last few years) and are to be avoided in a rising rate environment. (the next few years).

It you are still confused read this.

I started to talk about bonds in my May 11 2013 Market comment, where I spoke of the death of Mr. Bond. Now is the next leg in that story. OK so who cares about bonds? Well not me, at least not for years. To me bonds were boring, I like stocks that pop and make a fortune, overnight riches! But as I get older I see why "Gentlemen prefer bonds". Bonds move in stable long-term directions and so they are often easier to predict than equities.

So how do I know that interest rates will be going up? you might ask. Well the answer is there are not a lot of…

Nov 9 2013 Weekend Market Comment

Nov 9 2013 – Thursday night I shut off my monitor a smugly grinned, the market sold off, just as my last weekend market comment said it would, I was in cash, short gold miners and short long dated treasuries and even a little long bet on TripAdvisor. A tiny bit of “would-a could-a should-a” lurked in the back of my mind, perhaps last week if I was bold I could be riding the double short NASDAQ -- QID for a nice bounce today. Ah but that would be against a rule of mine. No equity shorts while we are in a strong bull market.
Come Friday I was reminded why I had that rule, oh baby what a surprise! The market rudely rallied without so much of hint of notice to me. The U.S. jobs report was better than expected and unlike the past good news was hailed as good and the buy the dip crowd hit the buy button. Well it should not be a complete surprised many fund managers are swimming in cash and look foolish for not cashing in on this near record rally. 
This is November and funds buy in Novembe…

Nov 2 2013 Weekend Market Comment

Nov 2 2013 – Have you heard about TINA? Well you should TINA is driving the markets. TINA is a lot of what I was talking about in my article The New Momentum. TINA is short for There Is No Alternative and traders are talking about TINA. Right now if you are running a pension, a hedge fund, a mutual fund or a sovereign wealth fund you really don’t have a choice, the only thing that is paying a return is equities. The market is overbought, the market is tired and the market will pull back but for now money continues to flow in. The problem is that the money does not trust the market so it continues to pile in to the same 100 top trade on the street. So you have the TINA imbalance, it makes the index rise but most of the market is falling apart. 
One of the strangest place money continues to flow in, is a big bet on of all things Air Canada. Air Canada's class B shares closed at a new 52-week high Wednesday, extending an upward trend that has seen the airline's stock value more …