Dear friends,
When I say, “I hope you’re well,” it’s far more than an opening formality.
Did you blink?
If so, you missed it. The Great Bull Market of 2020. In perhaps the shortest-lived bull market in history, the DJIA rebounded by over 21.4% in three days after The (First) Bear Market of 2020. The latter growled from 19 February – 23 March, while the latter charged from 23 – 26 March after which we had a sharp down, a sharp up, a wimpy down and Continue reading →
“Look straight ahead. What’s there?
If you see it as it is
you will never err.”
Bassui Tokusho, Japanese Zen Buddhist monk
Today we have little if any clarity as to where we are going with regards to the markets and the economy. We simply do not know, never having been here before. Much depends on when the numbers of people testing positive for COVID-19 peak and begin to trend downwards, as they seem to be doing now in Italy and South Korea. These are countries where one can Continue reading →
In this fourth of a six-part series on the Six Rules of Investing, I look at investing according to the business cycle. This article is divided into four sections: 1) The Investment Environment, 2) Assets that do well in stages of the business cycle, 3) February Fund Performance, and 4) My Target Portfolios.
How has your portfolio compared to the market or other portfolios? Does it offer sufficient reward for the risk that you are taking? Chart #1 contains the Continue reading →
In November 2014 we published a piece entitled, “Mediocracy and Frustration,” a lament of lame 3.9% annualized returns since the century began for the S&P 500. The historically low returns reflected two monster drawdowns blamed on the tech bubble of 2000 and the financial crisis of 2008 and 65 months of retractions 20% or more from peak.
As if that was not bad enough, every pundit was predicting eminent collapse, including two Nobel Prize winners. A beloved bull, it was a not.
They were wrong. All of them.
The bull lasted Continue reading →
Long-short funds generally position themselves as “the new 60/40,” that is, as funds appropriate as a core holding for a reasonably conservative investor. Their argument is that 60/40 funds work only when both the stock and bond markets are in a relatively good mood. A fund that simultaneously bets against wobbly companies with overvalued stocks and bets in favor of high-quality companies with undervalued ones has the prospect of earning money, or at least minimizing pain, even when markets are behaving poorly.
There are two problems with such funds. First, they Continue reading →
First Pacific Advisers, the adviser to the FPA funds, has reached an agreement with London-based Polar Capital. Under the agreement, FPA’s International Value and World Value teams – headlined by Pierre Py and Greg Herr – will operate as Phaeacian Partners, an independent subsidiary of Polar Capital. The transition from FPA to Polar would play out over six to nine months.
Phaeacian? Mysterious race, much discussed in Homer’s works. Highly advanced, great seafarers, generally hospitable. Their king was Continue reading →
One Rock Fund (ONERX) launched on March 6, 2020, the only public offering by – and only client of – Wrona Investment Management of Pinehurst, NC.
One Rock will invest in the stocks of corporations with “business momentum.” Here’s a description of the Continue reading →
In real estate, it’s all about location.
In investing, it’s all about timing.
On February 5, 2020, which the Dow at 28,807, Direxion launched the Direxion Flight to Safety Strategy ETF (FLYT). The passive fund tracks an index comprised of gold, large-cap utility stocks, and long-dated US Treasury bonds. It rebalances quarterly, with the least volatile component of Continue reading →
The Securities and Exchange Commission, by law, gets between 60 and 75 days to review proposed new funds before they can be offered for sale to the public. Each month, Funds in Registration gives you a peek into the new product pipeline. Most funds currently in registration will not become available until June.
The month’s SEC pipeline saw filings for Direxion U.S. Hyper Growth ETF (HIPR) and Direxion U.S. Fallen Knives ETF Continue reading →
Most months, 50 or 60 equity-oriented funds and ETFs undergo partial or complete changes to the management teams. Perhaps owing to our strained physical and financial environment, the number of changes this month is substantially lower: 38. Three of those are occasioned by retirements and 11 more are simply adding a member to an existing team. On whole, the industry seems to be focusing its energy elsewhere this month.
And good for Continue reading →
Fidelity has disclosed plans to underwrite their money market funds in order to keep their yield from going negative. They have also closed Fidelity Treasury Only Money Market Fund, FIMM Treasury Only Portfolio, and FIMM Treasury Portfolio, which have cumulative $85.5 billion AUM. Fidelity was concerned about the yields on T-bills which, briefly, looked like Continue reading →
