Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
The first couple guests were above average. Provided the typical “hem & haw” about various assets, interest rates, employment numbers, Fed policy, etc. Neither went out on a limb very far. What caught my attention was the gal who recently succeeded Ray Dalio at Bridgewater (in part, anyway) as co-chief investment officer. Just a 30-60 second clip mid-way into the show, but I thought she nailed it pretty good. (Skipped the last 10 minutes, assuming it was Larry Summers slumber hour.)
Anybody care to explain in plain English what Summers said? I got lost right after his opening line: “The Fed understands that they don’t understand.”
Ya, after that start, I must admit that I heard him without really listening. It was consummate Summers, eh? I take heart, after today, in the advice from Feeney and Hooper about diversification. It was a very MIXED day for my portfolio.
The more I watch this weekly program the less I take away. Sometimes the show’s “highlight” amounts to a 30-second Lewis Rukeyser clip pulled from the archives. For the life of me I don’t understand why most of the discussion is so bland. Not bad guests. Just same old advise: ”Be careful, diversify, be wary of the Fed.” Gosh - Really? And of course the “Soft landing / Hard landing / No landing” gibberish. Even when I manage to cut through Summers’ long-winded rambling style I rarely find anything useful in terms of investment advice. To be sure there are occasional (rare) guest exceptions. Liz from Schwab and the fixed-income gal from Franklin Templeton among them.
This week there was however one salient point. The gentleman “in the middle” @Crash mentions noted that the Fed tightening has been partially (perhaps largely) offset this year by looser fiscal policy in Asia and Europe. In essence, “a flood of liquidity” from their central banks has helped propel risk assets higher. This liquidity has bled into the equity markets at home and abroad boosting valuations and speculation. I was reminded of that comment in reading Barron’s this morning. Randall Forsyth makes exactly the same point (citing another source).
"Flood of liquidity in Asia and Europe?" Huh? The G7 are all raising rates to fight inflation, no? Yes, Lizanne Saunders is great. I think Feeney is sensible. Clements is a one-note samba.
This article helps explain the European liquidity issue. Monetary / fiscal policy works with a lag. @Crash is correct that the ECB has recently tightened. However for much of 2022 its policy was stimulative. Actually, the point both the WSW guest and Forsyth make is that this stimulus is winding down.
Here’s a clip from the Forsyth piece I noted earlier (Barron’s 2/20/23): ”Much of the early-year rally also had been driven by a largely unrecognized global liquidity surge noted by Citi global markets strategist Matt King. Even as the Fed was reducing its balance sheet (aka quantitative tightening), actions by the European Central Bank, the Bank of Japan, and the People's Bank of China were adding $1 trillion to global liquidity, he writes in a provocative research note.”
(Yep - I should have made this clearer in my original comment.)
Regarding recent WSW attention paid to the “Soft landing, Hard landing, and No landing” scenarios -
Am awaiting the introduction of a new line of mutual funds or ETFs. The ”Hard Landing”, “Soft Landing” and “No Landing” series. Invest in the one which best fits your prognosis.
OOPS. What's going on? The segments are pulled apart as separate units. Go to the one I linked above, then hit back-page and the other segments will be available in front of you. The opener is Tom Donelon. Spelling?
...03 March, 2023: Once again, the show is difficult to find online. It's not showing up on YouTube, as is customary. I don't even see it in a chopped-up fasion, the way it was LAST week.. WTF????? ...................Found it on Bloomberg's own page. Had to sit through ADS before it began. https://www.bloomberg.com/live
(That's not a dedicated link.). I'm apparently watching a live-replay of WSW late at night here, inprogress. So I can't navigate back to the start.
I found the first 2 guests bright and insightful. Both got into the nuts & bolts of market volatility. Some comments on the 0-dated options craze and its impact on volatility longer term. Not sure I agree with some of the woman’s assumptions - which sound like she’s expecting another sharp drop in equities later in the year. But I’ve heard that elsewhere as well. Long term - both seemed to agree the future course of inflation, and hence Fed actions, will be very impactful on equity returns going forward.
Folks looking for actionable advice likely to be disappointed. More focused on the mechanics of the markets rather than stock picking.
"I’ve been trying to listen to this episode late at night for couple days now. Unfortunately, I can’t seem to get through Larry’s piece without falling asleep - so have yet to finish it. "
+1 @Old_Joe - I’m convinced if you listened only to Summers and El-Erian you’d never invest. Frankly, I watch only the first 40 minutes of the one-hour WSW - so don’t do Summers.
Katterer at Causeway is so smart and engaging. But I just don't need small-cap volatility anymore. The other guest from Voya says you would do well with EM if you can hang on for 3-4 years into the future. Not interested, after EM has burned me so often.
Ketterer at Causeway is so smart and engaging. But I just don't need small-cap volatility anymore. The other guest, Barbers Reinhard from Voya says you would do well with EM if you can hang on for 3-4 years into the future. Not interested, after EM has burned me so often.
I enjoyed the mildly stated but pointed conflicts between the two women in the early segment. Kettner thinks active management best now. Avoid index funds. Reinhard primarily uses index funds due to low cost. Ketterer likes foreign developed markets which she sees as cheap if measured against the U.S. the past decade. But Reinhard says to reduce exposure to foreign markets which have been hot more recently. Favors U.S. holdings.
Sure, Kettner is more media savvy, younger looking, appears to have her head screwed on straight. Doesn’t mean she’s right on those issues. Interesting that Reinhard was in studio with the host / moderator while Ketterer appeared on a large screen. I’m sure psychologists or communications professors would have a good take on how that plays in to viewer perceptions. But, I haven’t a clue. (Well, I do have a clue, but it’s not worth sharing.)
Zell comes across as an old money-grubbing traditionalist concerned about his bottom line and little else.
Agreed! At any rate, I'm not making any deliberate moves to add to my foreign exposure in stocks or bonds. Foreign equity exposure for me has stood at 9% of total for quite some time. EM is negligible, according to Morningstar X-Ray. And no EM bonds. I keep tracking AGEPX but won't buy unless something drastic happens. I'm happy to remain domestic with my bonds, all junk, except what may be in PRWCX. I can get fat yield while remaining domestic. Yes, totalreturn is the goal. I bought at the wrong time. I'm riding it out, collecting and reinvesting dividends every month. I figure I'll stand pat for a long time in those junk funds. I also just started a position for wifey in SCHP TIPs of varying durations. That's her small but slowly growing pick-em-up truck fund, for our other home in Asia. Give us a decade or more and we might actually have enough in there for a pickup purchase! And les I forget: PRTXX (Treasuries, MM) is offering lovely returns lately, at low to zero risk: 4.31%.
Comments
See: Karniol-Tambour of Bridgewater Assiciates
This week there was however one salient point. The gentleman “in the middle” @Crash mentions noted that the Fed tightening has been partially (perhaps largely) offset this year by looser fiscal policy in Asia and Europe. In essence, “a flood of liquidity” from their central banks has helped propel risk assets higher. This liquidity has bled into the equity markets at home and abroad boosting valuations and speculation. I was reminded of that comment in reading Barron’s this morning. Randall Forsyth makes exactly the same point (citing another source).
https://finance.yahoo.com/news/cibc-settles-cerberus-matter-220000945.html?.tsrc=fin-srch
"Flood of liquidity in Asia and Europe?" Huh? The G7 are all raising rates to fight inflation, no? Yes, Lizanne Saunders is great. I think Feeney is sensible. Clements is a one-note samba.
Here’s a clip from the Forsyth piece I noted earlier (Barron’s 2/20/23): ”Much of the early-year rally also had been driven by a largely unrecognized global liquidity surge noted by Citi global markets strategist Matt King. Even as the Fed was reducing its balance sheet (aka quantitative tightening), actions by the European Central Bank, the Bank of Japan, and the People's Bank of China were adding $1 trillion to global liquidity, he writes in a provocative research note.”
(Yep - I should have made this clearer in my original comment.)
Am awaiting the introduction of a new line of mutual funds or ETFs. The ”Hard Landing”, “Soft Landing” and “No Landing” series. Invest in the one which best fits your prognosis.
I wouldn't be too surprised if a firm introduced similar funds in an attempt to increase AUM!
https://www.bloomberg.com/news/videos/2023-02-25/stock-markets-hitting-a-reset-video
OOPS. What's going on? The segments are pulled apart as separate units. Go to the one I linked above, then hit back-page and the other segments will be available in front of you. The opener is Tom Donelon. Spelling?
Once again, the show is difficult to find online. It's not showing up on YouTube, as is customary. I don't even see it in a chopped-up fasion, the way it was LAST week.. WTF?????
...................Found it on Bloomberg's own page. Had to sit through ADS before it began.
https://www.bloomberg.com/live
(That's not a dedicated link.). I'm apparently watching a live-replay of WSW late at night here, in progress. So I can't navigate back to the start.
Folks looking for actionable advice likely to be disappointed. More focused on the mechanics of the markets rather than stock picking.
Google
(My Hulu TV records it automatically)
@hank- beats the heck outta sleeping pills.
https://www.bloomberg.com/news/videos/2023-03-11/wall-street-week-full-show-03-10-2023
Katterer at Causeway is so smart and engaging. But I just don't need small-cap volatility anymore. The other guest from Voya says you would do well with EM if you can hang on for 3-4 years into the future. Not interested, after EM has burned me so often.
Sure, Kettner is more media savvy, younger looking, appears to have her head screwed on straight. Doesn’t mean she’s right on those issues. Interesting that Reinhard was in studio with the host / moderator while Ketterer appeared on a large screen. I’m sure psychologists or communications professors would have a good take on how that plays in to viewer perceptions. But, I haven’t a clue. (Well, I do have a clue, but it’s not worth sharing.)
Zell comes across as an old money-grubbing traditionalist concerned about his bottom line and little else.
Good guests, I think. Intelligent conversations.
https://www.bloomberg.com/news/videos/2023-03-24/wall-street-week-full-show-03-24-2023