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I was wondering about this information form Bespoke and was going to try and look it up. I think what is most interesting is that it reflects that the 500 Index is oversold well into the 2nd deviation while most all of its sectors are not with some on the border between the first and second deviation.
Why do you think this is? And, why do you think it (the Index) is so oversold, well past the sectors that make it up?
But what I find amazing is the contrast in the 3 & 5 year returns for (diversified) large-cap equity funds in general and those funds focused on raw materials/energy. It's a stark contrast with the first group showing 10%, 15%, and even 20% annualized gains over 3 & 5 years, and the second group essentially flat or negative over that same period.
Doesn't make sense to me considering that to a degree the two groups are interconnected economically. (You don't buy a car and than not put fuel in it or drive it - or drive only on unpaved roadways. And few houses today are built of mud and grass and heated with solar.) Point I'm awkwardly trying to make is that the products which drive earnings for large cap stocks rely to an extent on the use of energy, metals, lumber, cement, etc. for their production and continued operation.
Either one group of stocks appears to be way overvalued - or the other way undervalued.
Macro View Pressure Mounts on China to Act August 21, 2015 By Scott Minerd, Chairman of Investments and Global CIO Guggenheim Partners,
As a result, the PBoC will soon be forced to reduce bank reserve requirements while allowing for a more rapid devaluation of the RMB. Time is not on the side of Chinese policymakers. Given the severity of the current domestic slowdown, pressure is mounting for more radical policy action.
Expect to see further downward pressure on commodity prices, global equities, and U.S. Treasury yields. The first sign that we are approaching a bottom for all three will be when China caves and allows the RMB to adjust to a more appropriate level, which could mean another 25–30 percent decline in the value of the RMB against the U.S. dollar.
A sort of interesting technical tidbit: 1970 has been cited I dunno how many times (e.g., here, months ago) as a key support level for the S&P, and it closed there, on the nose, today.
I thought that diversification among countries would reduce my portfolio volatility. Not! I am losing faith in CAPM and those Nobel prize winners.
HA. Sometimes it will reduce volatility. In today's case, heavy selling took place overnight in Asia and Europe and continued over here. Longer term such diversification helps. Shorter term it's often hard to see the difference.
Comments
I was wondering about this information form Bespoke and was going to try and look it up. I think what is most interesting is that it reflects that the 500 Index is oversold well into the 2nd deviation while most all of its sectors are not with some on the border between the first and second deviation.
Why do you think this is? And, why do you think it (the Index) is so oversold, well past the sectors that make it up?
Interesting, yes? Indeed, it is.
Hussman (HSGFX) was up 2%. That means that now he's only lost 8% for his investors over the past year.
But what I find amazing is the contrast in the 3 & 5 year returns for (diversified) large-cap equity funds in general and those funds focused on raw materials/energy. It's a stark contrast with the first group showing 10%, 15%, and even 20% annualized gains over 3 & 5 years, and the second group essentially flat or negative over that same period.
Doesn't make sense to me considering that to a degree the two groups are interconnected economically. (You don't buy a car and than not put fuel in it or drive it - or drive only on unpaved roadways. And few houses today are built of mud and grass and heated with solar.) Point I'm awkwardly trying to make is that the products which drive earnings for large cap stocks rely to an extent on the use of energy, metals, lumber, cement, etc. for their production and continued operation.
Either one group of stocks appears to be way overvalued - or the other way undervalued.
Pressure Mounts on China to Act
August 21, 2015 By Scott Minerd, Chairman of Investments and Global CIO Guggenheim Partners,
As a result, the PBoC will soon be forced to reduce bank reserve requirements while allowing for a more rapid devaluation of the RMB. Time is not on the side of Chinese policymakers. Given the severity of the current domestic slowdown, pressure is mounting for more radical policy action.
Expect to see further downward pressure on commodity prices, global equities, and U.S. Treasury yields. The first sign that we are approaching a bottom for all three will be when China caves and allows the RMB to adjust to a more appropriate level, which could mean another 25–30 percent decline in the value of the RMB against the U.S. dollar.
Things will get worse before they get better, and investors around the world are demonstrating appropriate concern. Unfortunately, relief is nowhere in sight.
http://www.guggenheimpartners.com/perspectives/macroview/pressure-mounts-on-china-to-act
The U.S. 10 year continues the yield towards 2%. Will close around 2.05% today.
I have my shopping list handy, so we shall see what the mood of the market is next week.
From my watch-list: MFLDX, HSGFX and BEARX all had nice gains.
Approximately +1% +2% and +2% respectively.
Interestingly, both gold funds I track were down a bit, despite the metal gaining.