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Loving Stocks Here! Meta and Alphabet Setting Up Nicely for Long Term Investors!

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  Image: Nelson still remains bullish. We wouldn’t be surprised to see the markets make new highs as they have done time and time again over the stock market’s storied history of bull and bear markets, crashes and rip-your-face off rallies, and economic booms and recessions! There are myriad risks, but we’re not overthinking this market. We like stocks for the long haul. “The active versus passive over-benchmarking plague is hurting investor returns, and flawed measures of risk are disguising the underperformance.” — Brian Nelson, CFA Dear members: Latest thoughts on Meta Platforms >> Latest thoughts on Alphabet >>  One of the hardest parts of investing is keeping your head when others around you are running for the exits. That’s … Read more

Experience and Judgment

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Hi everyone: — I think you and I would both agree that there’s far too much noise out there. For every investor that believes one thing, another investor might believe the complete opposite. From those pushing market-tracking index funds to those seeking to outperform the market, there’s no shortage of paths for an investor to pursue either. There are day-trading aficionados with huge followings on social media and factor-based investing gurus highlighting “science” as the secret to stock market outperformance–and just about everything in between. — A number of years ago while I was looking to hire someone on our sales staff at Valuentum, the view came up that research was a commodity. It was weird because, in my view, … Read more

Economic Roundtable: Quant Quake, Quac-cidental Correlation

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Image Source: Anders Sandberg.  Last week, the markets may have revealed that internals aren’t all that healthy. Major equity markets experienced a “rotation” that reminded many investors of the “quant quake” from August 2007. As Valuentum’s Brian Nelson wrote in Value Trap, “just a few bad days in the market caused a rapid unwinding of many quant long-short strategies (back then). Goldman’s chief financial officer said at the time that the firm was witnessing ‘25-standard deviation moves, several days in a row.’” On the surface, markets last week seemed relatively calm, but as the episode in 2007 revealed the activity last week may just be the calm before the storm. Many are pointing to overcrowded trades in betting against certain … Read more