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.
Question for anyone in the know … Does J.P Morgan service clients (other than MarketWatch / media in general) who pay extra for “superior” investment advice, or do they meet out such advice impartially to rich and poor alike and at the same time? If they have paying customers, what types of advice are they getting for their money that you and I may not be receiving free of charge? And if there are paying customers who receive essentially the same advice at the same time, wouldn’t the free advice serve to “front-run” them and lessen their profits? For example: If every Tom, Dick and Harry decides to unload equities on the same day that Morgan’s paying clients sell, won’t they suffer greater losses than they might otherwise as their stocks drop farther and faster than they otherwise would have?
One potential way around the apparent quagmire would be if J.P. Morgan acted on their advice a day or two earlier and has already shifted their clients’ money out of equities and into bonds and cash. In that case, the advice this morning is essentially telling you what they have already done for their paying customers. And likely, those sales and purchases were implemented at more favorable prices.
I hope this is received as a fair and reasonable question and not criticism of the post or J.P. Morgan or of the advice given. It may well be the right advice. When there is a widespread public assumption that stocks are poised to fall, that is often a self-fulfilling prophecy.
I just read it and thought it was understandable and that there was a cogent logic to it. There are all sorts of experts offering opinions all day on Bloomberg tv, too. And CNBC and any of the other ones. I learn, often, from them, but do not immediately go and make moves in the portfolio after hearing what they have to say. I like my plan. PART of my plan = to stay flexible to some degree with SOME of the money. I like my selections, but remind myself that I'm not married to them. But before I liquidate a holding, I must find a new alternative that is just as compelling.
Most firms send their advice/alerts to their preferred clients first, and then excerpts to media/public a few days later.
BTW, many think-tanks and research firms (technical, social, political) do the same. At many firms, nothing can go out until a formal internal report/document has been created and approved. In science/technical areas, I am familiar with some research institutes that value these internal reports more than conference or peer-reviewed journal publications.
Supposedly the buy-side and sell-side 'analysts' don't coordinate the timing of release of their guidance, but I still don't trust Wall Street to play fair, even if it's the law or SEC regulation. A Chinese-firewall sort of thing, I think.
Nevertheless, a good rule of thumb is that when Joe/Jane Retail Investor see something in the media or as a research note from their firm, the information's already long-since known by others with far deeper pockets so it's not a surprise to everyone and depending on what's discussed, the 'easy' money could already have been made.
An even better rule of thumb is to never act blindly on what big-bank 'analysts' and prominent CIOs put out no matter how loudly their prognostications might be. You could've made a fortune fading (taking the opposite position) on such statements from, for example, Goldman's various CIOs over the years or Cramer's TV picks. Frankly, to me, the more I see them on TV or the financial press/social media, the less credence I give them.
By contrast, senior investment analysts or CIOs who eschew the media and rarely do interviews or make prognostications, or smaller folks running tiny funds or doing newsletter analysis might be worth paying more attention to in terms of their assessments and opinions - such as David Giroux of TRP or Jason Kelly. But even there, you still have to do your own diligence!
Kolanivak isn’t just another market pundit. As a spokesman for the investment arm of JPMorgan Chase he commands a very high stature. If size and financial influence of company or institution is considered, the advice might be seen to carry more weight and be of superior quality. One would expect advice from such a giant to move markets. Their advice feels incrementally different from that of smaller money managers like Charles Schwab, T. Rowe Price or Invesco.
From Wikipedia: ”JPMorgan Chase & Co. is an American multinational financial services company … the largest bank in the United States and the world's largest bank by market capitalization. The firm is considered systemically important by the Financial Stability Board (which) has led to enhanced regulatory oversight …” (Wikipedia)
Here’s an indication of the relative sizes of some financial institutions by market cap:
It seems to me about 70% of the time when I sell something it comes back to life.
Frustrating, isn’t it? I’ve had 2 or 3 like that the past 3 or 4 months. One stock I bought on a Barron’s recommendation in the fall only to watch it decline more than 6% a couple days later (all in 1 day). “Who needs this?” I asked - and ditched the *#!##. Well now it’s gained 10-15% above the initial purchase price and tends to rise on days when the market goes down. Of course I regret the knee-jerk reaction to sell it.
There’s a couple things at work, here, however. First, who would have foreseen in November the impressive jump in the equity markets over the past 2-3 months? I sure didn’t. So just about anything you ditched 2-3 months ago is now much higher. But, those kinds of bets might just as easily have gone the other way - unless you have a very good crystal ball. The second factor is that those kinds of spec plays command a relatively small dollar investment. Who’s going to bet the farm (or even a sizable amount) all at once on what amounts to a speculative investment? Why is that important? Because even after an impressive % gain, the actual dollar gain from such a small investment months out is likely to be relatively small. What all this argues for, I think, is mostly larger investments in a limited stable of proven reliable holdings. Less exciting, but a lot more predictable. (Less stressful as well).
I first put some money into single stocks back in the '90s. It was PG&E. Biggest utility in the country. Utilities are safe, right? Boom. The whole Erin Brokovitch stuff blew up in my face, and it was discovered that all those people down in Kern County (?) had been poisoned and were suffering from cancer because PG&E is a suck-hole company. There were also other incidents. A manhole cover blew out of its position from an explosion under the street in S.F. Someone else was injured seriously. And more.
Crud. So, that outfit is on my shit-list.
Only in 2021 did I begin again to dabble in single-stocks. Got my ass handed to me, via RGR and ENIC. No more of THAT.
At last, I have made up the loss, plus a bit more, by now. I've learned to do better homework, make better decisions, I hope. I've held the same five (5) single-stocks in my new stable for the duration, since I once again started over. TRP lists them this way for me, in terms of "Personal Rate Of Return:" as of 17 Feb, '23: In the black: NHYDY ET JRSH (on fire lately. But a tiny investment.) BHB ******* In the red: PSTL HYDB (ETF) SCHP (ETF)
Diversified by industry as far as my budget will let me, too. That's deliberate. Hang in there! I'm happy today, despite the cruddy weather and the puke-ish Markets. I have opera tix for tonight! Best mutual fund for me, still: PRWCX.
Comments
Question for anyone in the know … Does J.P Morgan service clients (other than MarketWatch / media in general) who pay extra for “superior” investment advice, or do they meet out such advice impartially to rich and poor alike and at the same time? If they have paying customers, what types of advice are they getting for their money that you and I may not be receiving free of charge? And if there are paying customers who receive essentially the same advice at the same time, wouldn’t the free advice serve to “front-run” them and lessen their profits? For example: If every Tom, Dick and Harry decides to unload equities on the same day that Morgan’s paying clients sell, won’t they suffer greater losses than they might otherwise as their stocks drop farther and faster than they otherwise would have?
One potential way around the apparent quagmire would be if J.P. Morgan acted on their advice a day or two earlier and has already shifted their clients’ money out of equities and into bonds and cash. In that case, the advice this morning is essentially telling you what they have already done for their paying customers. And likely, those sales and purchases were implemented at more favorable prices.
I hope this is received as a fair and reasonable question and not criticism of the post or J.P. Morgan or of the advice given. It may well be the right advice. When there is a widespread public assumption that stocks are poised to fall, that is often a self-fulfilling prophecy.
BTW, many think-tanks and research firms (technical, social, political) do the same. At many firms, nothing can go out until a formal internal report/document has been created and approved. In science/technical areas, I am familiar with some research institutes that value these internal reports more than conference or peer-reviewed journal publications.
Just wondering, Derf
Supposedly the buy-side and sell-side 'analysts' don't coordinate the timing of release of their guidance, but I still don't trust Wall Street to play fair, even if it's the law or SEC regulation. A Chinese-firewall sort of thing, I think.
Nevertheless, a good rule of thumb is that when Joe/Jane Retail Investor see something in the media or as a research note from their firm, the information's already long-since known by others with far deeper pockets so it's not a surprise to everyone and depending on what's discussed, the 'easy' money could already have been made.
An even better rule of thumb is to never act blindly on what big-bank 'analysts' and prominent CIOs put out no matter how loudly their prognostications might be. You could've made a fortune fading (taking the opposite position) on such statements from, for example, Goldman's various CIOs over the years or Cramer's TV picks. Frankly, to me, the more I see them on TV or the financial press/social media, the less credence I give them.
By contrast, senior investment analysts or CIOs who eschew the media and rarely do interviews or make prognostications, or smaller folks running tiny funds or doing newsletter analysis might be worth paying more attention to in terms of their assessments and opinions - such as David Giroux of TRP or Jason Kelly. But even there, you still have to do your own diligence!
Kolanivak isn’t just another market pundit. As a spokesman for the investment arm of JPMorgan Chase he commands a very high stature. If size and financial influence of company or institution is considered, the advice might be seen to carry more weight and be of superior quality. One would expect advice from such a giant to move markets. Their advice feels incrementally different from that of smaller money managers like Charles Schwab, T. Rowe Price or Invesco.
From Wikipedia: ”JPMorgan Chase & Co. is an American multinational financial services company … the largest bank in the United States and the world's largest bank by market capitalization. The firm is considered systemically important by the Financial Stability Board (which) has led to enhanced regulatory oversight …” (Wikipedia)
Here’s an indication of the relative sizes of some financial institutions by market cap:
J.P. Morgan Chase $418 Billion
Bank of America $283 Billion
Charles Schwab $150.77 Billion
T Rowe Price $26.4 Billion
Invesco $8.4 Billion
'Most of Kolanovic’s 2022 calls didn’t pan out. He has since reversed his view,'
There’s a couple things at work, here, however. First, who would have foreseen in November the impressive jump in the equity markets over the past 2-3 months? I sure didn’t. So just about anything you ditched 2-3 months ago is now much higher. But, those kinds of bets might just as easily have gone the other way - unless you have a very good crystal ball. The second factor is that those kinds of spec plays command a relatively small dollar investment. Who’s going to bet the farm (or even a sizable amount) all at once on what amounts to a speculative investment? Why is that important? Because even after an impressive % gain, the actual dollar gain from such a small investment months out is likely to be relatively small. What all this argues for, I think, is mostly larger investments in a limited stable of proven reliable holdings. Less exciting, but a lot more predictable. (Less stressful as well).
Hello! Am I batting .500?
I first put some money into single stocks back in the '90s. It was PG&E. Biggest utility in the country. Utilities are safe, right? Boom. The whole Erin Brokovitch stuff blew up in my face, and it was discovered that all those people down in Kern County (?) had been poisoned and were suffering from cancer because PG&E is a suck-hole company. There were also other incidents. A manhole cover blew out of its position from an explosion under the street in S.F. Someone else was injured seriously. And more.
Crud. So, that outfit is on my shit-list.
Only in 2021 did I begin again to dabble in single-stocks. Got my ass handed to me, via RGR and ENIC. No more of THAT.
At last, I have made up the loss, plus a bit more, by now. I've learned to do better homework, make better decisions, I hope. I've held the same five (5) single-stocks in my new stable for the duration, since I once again started over.
TRP lists them this way for me, in terms of "Personal Rate Of Return:" as of 17 Feb, '23:
In the black:
NHYDY
ET
JRSH (on fire lately. But a tiny investment.)
BHB
*******
In the red:
PSTL
HYDB (ETF)
SCHP (ETF)
Diversified by industry as far as my budget will let me, too. That's deliberate.
Hang in there! I'm happy today, despite the cruddy weather and the puke-ish Markets. I have opera tix for tonight!
Best mutual fund for me, still: PRWCX.