AAII Sentiment Survey, 9/21/22 What’s either encouraging - or scary - depending how you view it, is that virtually every asset class is in free fall. Oil’s in the 80s, down from north of $100. Gold’s under $1700, which is about as low as it’s been in 3 or 4 years. Bonds of course stink, unless you go very short term where rates have risen. Stocks of every stripe falling. When a fund like VWINX drops nearly a percent in a single day you know you’ve got problems. No secret why this is happening. Interest rates have soared. I suspect market forces in the face of 8% inflation are more responsible for the rate increases than the Fed’s words or actions. They take the credit. Market forces force their hand.
I’m not optimistic. However, I’d rather go down owning equities than churning out a few % in short term bonds. And there’s always the chance I’m overly pessimistic and at least some risk asset classes (gold, nat. resources, foreign stocks, etc.) will stage a rally. Wouldn’t take a lot to tilt the table in a diversified investor’s favor. A real interesting fund ro watch is AOK. Been beaten silly this year. It will rise again from the dead. But, when?
Article: Can You Sue Your Financial Adviser?
AAII Sentiment Survey, 9/21/22 By next Tues weds if have couple rallies for couple trading days where 90% of stocks positives by days ends, sale offs maybe subsidizing/hopeful for bottom consolidation
Sp500 shows oversold conditions but multiple support levels were passed
We maybe early to parteee though. Lots Wall Street experts say at least 5 -9 more months of pain / sp500 > 20s% leg down and severe lasting 1.5-2.5 yrs recession.
Large corps/FAANG starting laid offs and lots folks in real estates /commercial are hurting, housing sales down for 7 months now. Feel like 2009 all over again.
Buffet once stated *nobody know nothing* he is extremely right
Gundlach says bonds are wickedly cheap compared to stocks and offers one way to get a 9 return I just checked a bunch of intermediate-term core/core-plus bond funds that I track.
They're down 0.97% to 1.46% today.
Gundlach's call might be a little premature...
Laddering Short-Term Treasury Purchases Giggle. I read the title given to this new thread and thought it meant that someone or a group of someones--- known or unknown--- had bought monstrously gigantic amounts of Treasuries.
That's what I thought it meant, too.
I see how the original title could be misinterpreted.
I'm sorry about that.
I modified the title to hopefully make it clearer.
Yes the change makes the meaning clear. But I enjoyed being silly and wrong.
AAII Sentiment Survey, 9/21/22 Also from Twitter and Carson Investment Research on the prior four occasions the S@P was up an average 19.1% and 33.2% six and twelve months later. I am finding Twitter is filled with great research by some fabled analysts with decades of experience. But not sure of its value in the real world. Lots of curve fitted data mining there. Time will tell if this latest signal proves anywhere near as profitable as in the past. Heaven knows that since the June lows there have been an abundance of indicators saying the next six and twelve months will see outsized gains.
AAII Sentiment Survey, 9/21/22 Today was a lot nastier than the index numbers reveal. My GNMA fund fell over 1%. Rare. Banks continued to get slaughtered. Many down over 30% YTD. Due to both the inverted curve plus fed’s (regulators) making noise about higher capital reserve requirements for large regionals.
Egads! (my “sentiment” reading)
Added - As of yesterday TRP’s conservative allocation fund PRSIX was off -14.37% YTD. Can’t imagine today helped it any. (Off a cool 15% YTD after Thursday)
AAII Sentiment Survey, 9/21/22 Interesting. It was 3/8 or 3/9 2009 that the terrible bear market ended. A Monday or Tuesday as I recall. The 5th (lowest sentiment reading) was probably the Friday before. I phoned Oakmark and D&C on Friday to get instructions for Roth conversions. (Had run out of dry powder. New approach needed.) Completed the paperwork over the weekend. Mailed them both “next day delivery” on Monday. Missed the bottom by 1 day …
Oh shucks!
AAII Sentiment Survey, 9/21/22 I already mentioned that the Survey was the most negative since 3/5/2009 (memorable SP500 at 666 on 3/9/09). Also this week was among the 5 worst sentiments since the Survey inception in 1987.
Being a contrarian indicator, the Survey is significant at extreme levels.
How Has Private Equity Investing Fared for Mutual Funds? "According to PitchBook, the number of unicorns, or private companies valued over $1 billion, has ballooned from 39 in 2013 to more than 1,200 as of September 2022. And while mutual fund investment in these companies has resulted in its share of success stories, it has also yielded disappointments." "This update of Morningstar’s original 2016 'Unicorn Hunting' report assesses the historical trends
of U.S.-domiciled open-end diversified U.S. equity mutual fund ownership of private-firm equities
between Jan. 1, 2007, and June 30, 2022. It excludes exchange-traded funds and funds of funds."Link
Laddering Short-Term Treasury Purchases "Why stagger the purchases, laddering them a few weeks apart?
This allows you to gain from rising interest rates, while also giving you easier access to your cash if you need it.""As I noted in that July article — and it is still true today —
the sweet spot in the T-bill yields seems to be in the 13-week and 26-week maturities.
The 26-week is now just 10 basis points lower than the 2-year Treasury, which closed yesterday at 3.86%.
The 13-week is desirable because the shorter term allows you to get access faster to future rate increases."Link
Gundlach says bonds are wickedly cheap compared to stocks and offers one way to get a 9 return Stocks are still somewhat expensive based on historical PE ratio. Plus, the outlook for future earnings (due to recession) is now in question.
https://multpl.com/s-p-500-pe-ratioCurrent S&P 500 PE Ratio:
19.03 -0.
12 (-0.60%)
1:38 PM EDT, Thu Sep 22
Mean:
15.98
Median:
14.90
Min: 5.3
1 (Dec
19
17)
Max:
123.73 (May 2009)
In general, Bonds outlook may look rosier at end of 4Q 2022. Just not quite yet.
Stocks could look a bit better by then, too, if the current trend continues. Cash (earning closer to 4% range) may be king.
FPA customer service? It's kind of shocking that if companies of Uber's size can get hacked by an
18-year-old--
https://techcrunch.com/2022/09/19/how-to-fix-another-uber-breach/--that investors aren't more concerned about security issues. I agree regarding the convenience of not getting multiple statements from each boutique fund company, multiple tax forms, multiple estate issues to resolve, multiple application forms to fill out, multiple everything to link and expose to a potential breach. But I also think having everything at one institution may not be wise either. Some sort of Goldilocks balance is nice. But perhaps I've watched too much Mr. Robot.
Gundlach says bonds are wickedly cheap compared to stocks and offers one way to get a 9 return What is he recommending to get the 9%? The article is behind a paywall.
Not sure about that article specifically, but in his webcast a week ago, his emphasis was on Treasuries and agency issues delivering bigtime after Fed rate raises are ~ over. For the latter, he said his flagship fund DBLTX was buying beaten-down agencies yielding > 5%.
I'd guess that projecting 9% would have to include capital gains when the Fed's done, (if) the economy has slowed, and investors dive into Ts thinking rates have peaked.
As I mentioned in another thread, it's worth recalling that his old TCW fund and the then-new DBLTX made a mint for investors after 2008.
So did Pimco Income, by the way. It'll be interesting to see what Pimco's saying about the opportunities they see in the near future.
