Archive for December, 2017

Weekly Market Recap Dec 31, 2017

Courtesy of Blain.

StockTrader New Year’s Eve Edition!

Despite a hiccup on the last day of the year, indexes finished off a fantastic year in fine fashion with the S&P 500 surging 19.6% and the NASDAQ 28.4%!!  Keep in mind that is off a strong rally in November/December 2016 post election day.   Volume was extremely light as is usual for the week between Christmas and New Years Eve.   More crazy records being broke – it was the DJIA 9th positive month in a row – the first time that has happened since 1959.  The NASDAQ rose for the 6th straight year  – which last happened in 1975 to 1980.

“There’s not much happening, but the quiet action tells a really important story: it tells you the bulls remain in control, that sellers are few and far between, and that we’re waiting for the next big catalyst, which will probably be earnings,” said Adam Sarhan, chief executive of 50 Park Investments.

“Otherwise, we’re seeing the market digest a very strong 2017 rally. It is perfectly normal and healthy to see the market pause after a huge rally, and the absence of selling in and of itself is very healthy,” he said.

Selling late in the day Friday came in the last half-hour of trading, a fall that roughly corresponded with the publication of a Reuters report that Russian tankers had supplied fuel to North Korea in recent months.

Bitcoin fell nearly 10% Thursday after South Korea announced tougher measures to crack down on cryptocurrency trading.  That said, 10% is basically a daily move for this type of stuff!

Here are the best performers in the S&P 500 for 2017.  Align Technology is the maker of Invisalign dental braces.  Note the 2 home builders and chip makers.

Nothing market moving economically.

Here is the 5 day weekly “intraday” chart of the S&P 500 …via Jill Mislinski.

Interesting infographic on companies making the most profit PER employee
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Bill Gates vs Steve Jobs

By VWArticles. Originally published at ValueWalk.

The Wealth Acquirer


Published on Dec 24, 2017


Watch Bill Gates and Steve Jobs share the stage in this rare appearance together!

Also see Full Bill Gates book list

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Correcting For Selection Bias, Backtest Overfitting, And Non-Normality – II Journals

By VW Staff. Originally published at ValueWalk.

Marcos Lopez de Prado of Guggenheim Partners expands on his thoughts about the deflated Sharpe Ratio as published in his JPM 40th Anniversary issue article.

Correcting For Selection Bias, Backtest Overfitting, And Non-Normality

Marcos Lopez de Prado

Image source: YouTube Video Screenshot

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Vintage Warren Buffett, John Templeton & Robert Wilson Discussing Investment Principles (1985)

By VW Staff. Originally published at ValueWalk.

Interviews with legendary investors Warren Buffett, John Templeton and Robert Wilson. In the interviews, the gentleman explain their investment principles and how they view the stock market. They also discuss what makes them different and why they can beat the market.


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Vintage Warren Buffett, John Templeton & Robert Wilson Discussing Investment Principles (1985)

American-born British investor, fund manager, philanthropist, valuewalk, Templeton Growth Fund, greatest stock picker ever, John Marks Templeton, Chartered Financial Analyst, CFA, Time magazine's 100 Most Influential People, value investors, famous value managers, global value, Investing the Templeton Way: The Market Beating Strategies of Value Investings Legendary Bargain, Franklin Templeton Investments, Contrarian investing, legendary investor, "avoiding the herd", "buy when there's blood in the streets", Templeton Prize

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Elon Musk – 8 Keys To Success

By VWArticles. Originally published at ValueWalk.

Please write out your own interpretation of Elon Musk’s Keys To Success in the comment section! (generic answers given at the end of the video) Elon Musk


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Tesla Model 3 Launch Event Eight Ideas That Led To His Successes in Business: 1 0:00 – a lot of it is execution (and Hard Work) 0:20 – but also take feedback and try to improve 2 1:03 innovation comes from questioning the way things have been done before 1:18 try to get your customers to help you 3 2:56 get profits (Interesting Advice coming from Elon Musk) 4 3:58 substance over show 5 4:21 be good with the details 6 5:35 first principles thinking 7 6:39 try to be practical 8:54 having a purpose does make easier to attract talent 8 10:00 finding the leverage

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The China Hustle – Official Trailer

By VW Staff. Originally published at ValueWalk.

From the producers of ENRON: THE SMARTEST GUYS IN THE ROOM comes a Wall Street heist story about a still-unfolding financial crime so big, it has the power to affect all of our wallets. Investors on the fringes of the financial world feverishly seek new alternatives for high-return investments in the global markets, and have found a goldmine in China. But when one investor discovers a massive web of fraud, everything else is called into question. Jed Rothstein’s documentary rings the alarm on the need for transparency in an increasingly deregulated financial world by following those working to uncover the biggest heist you’ve never heard of.


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The China Hustle – Official Trailer

China Hustle

Image source: YouTube Video Screenshot

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Getting People To Agree: A TED Experiment

By Guest Post. Originally published at ValueWalk.

In April Mariano Sigman and I (mostly Mariano) carried out an experiment at TED on how to get people to make better decisions and to agree!  Here is the video and the writeup describing this and other experiments on the topic of how to get people to agree on difficult questions.  An important challenge these days…..


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The video:

And the ideas piece:

How Can We Improve Democracy? One Intriguing Idea: Set Up A Jury System.

Collective wisdom might best be found when small groups of people are given a chance to discuss and deliberate, say social scientists Mariano Sigman, Joaquin Navajas, Gerry Garbulsky and Dan Ariely. Could this suggest a better way to vote?

For many years, problems with democracy have been pushed under the carpet in the general belief that “democracy is the worst form of government — except for all the others.” While people have felt unhappy with the results after certain elections, their unhappiness didn’t cause them to question the entire system.

However, after surprising results like the EU referendum in the UK (aka Brexit), the 2016 US presidential election, or the 2016 peace referendum in Colombia, this feeling has changed. We’ve seen that democratic decisions are more volatile and less predictable than what common sense and forecasting technologies were ready to accept. In fact, it might be time to refine and revise what we mean by democracy and how it should be implemented.

While science cannot establish the goals of democracy, carefully designed scientific experiments can — and should — help identify the best ways to achieve them after they’re agreed upon by a society. For centuries, sociologists, political scientists, mathematicians…
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Michael Mauboussin Discusses The Paradox Of Skill

By VW Staff. Originally published at ValueWalk.

Michael Mauboussin, Director of Research at BlueMountain Capital Management discusses a framework to think about skilled active managers.


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Michael Mauboussin Discusses The Paradox Of Skill

michael mauboussin, Credit Suisse, valuation and portfolio positioning, capital markets theory, competitive strategy analysis, decision making, skill versus luck, value investing, Legg Mason, The Success Equation, Think Twice: Harnessing the Power of Counterintuition, analysts, behavioral finance, More Than You Know: Finding Financial Wisdom in Unconventional Places, academics , valuewalk

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Walter Schloss Book List

By Jacob Wolinsky. Originally published at ValueWalk.

Walter Schloss is one of the greatest value investors ever. Schloss had a career which spanned many decades from the early times of Ben Graham to the 2000s. Unforunately, Schloss never wrote any books nor are there many recommendations from the famed value investors. However, we were able to find a few books he recommended and one about Schloss which mostly come from a great talk which he gave at the Ivey School of Business in 2008. If you have any others please send us tips@valuewalk.com

See the six books below

Also check out our full investor list of books here

schloss]

Book Name Author Publish Date Date recommended Source
value investing from graham Bruce C. N. Greenwald & Judd Kahn & Paul D. Sonkin & Michael van Biema 2004 2004 Investors Archive
The Memoirs of Walter J. Schloss Walter J. Schloss 2003 2003 Investors Archive
A Modern Approach to Graham and Dodd Investing Thomas P. Au 2004 2004 Investors Archive
The Intelligent Investor 3rd edition Ben Graham 1965 2008 Ivey Interview
Perkins The Internet Bubble Michael and Anthony Perkins 1999 2008 Ivey Interview
Security Analysis Graham & Dodd 1940 2008 Ivey Interview

An excerpt from the Ivey interview where Schloss discusses his time as a soldier in World War II

Well, I like to buy stocks that are hitting new lows. I like to look at the stocks, I


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“Q1 Stock Market Outlook: We’re Gonna Need a Bigger Slide”

 

"Q1 Stock Market Outlook: We’re Gonna Need a Bigger Slide"

Courtesy of Zero Hedge

by FFWiley

If 2018 rings in a bear market, it could look something like the Kennedy Slide of 1962.

That was my conclusion in “Riding the Slide,” published in early September, where I showed that the Kennedy Slide was unique among bear markets of the last eighty years. It was the only bear that wasn’t obviously provoked by rising inflation, tightening monetary policy, deteriorating credit markets or, less commonly, world war or depression.

Moreover, market conditions leading up to the Slide should be familiar—they’re not too far from market conditions since Donald Trump won the 2016 presidential election. In the first year after Kennedy’s election, as in the first year after Trump’s election, inflation seemed under control, interest rates were low, credit spreads were tight, and the economy was growing. And, in both cases, the stock market was booming.

Here’s an updated look at Trump’s stock rally versus the Kennedy rally and subsequent Slide:

As you can see, we’ve now reached the chart’s critical juncture—at this time of the calendar in 1962, the post-election rally was ending, and the Slide was about to begin. Our chart begs the question: Will the similarities continue and lead us into a Trump Slide in early 2018?

Or, with less drama, you might like to hear my Q1 stock market outlook.

While it’s certainly possible Trump’s rally has run its course, I’ll argue that it’s unlikely. And to make my case, I’ll rely largely on a single indicator, one that measures monetary policy. I use the indicator to help determine whether policy is behind the curve, ahead of the curve, or somewhere in between. In this article, I’ll call it VCURVE, for “versus the curve.”

Tracking VCURVE through 16 Market Corrections

Before I explain how VCURVE is calculated, let’s look at the history. The following chart compares VCURVE to every instance since 1954 when the stock market corrected by more than 10% and for at least two months:

The upper panel shows an especially…
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Zero Hedge

Belgian F-16 Pilot Ejects Before Fiery Crash, Gets Caught In High Voltage Power Lines

Courtesy of ZeroHedge View original post here.

A Belgian F-16 fighter jet crashed in Northwestern France on Thursday, leaving one of its pilots hanging by his parachute from high voltage electricity lines, according to the BBC

Both pilots had minor injuries after they ejected from the plane, which clipped the roof of a house and crashed in a field near Pluvinger. The pilot stuck in the 250,000 volt power lines was brought down after a two hour rescue operation by French emergency ser...



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Phil's Favorites

Buyer beware: How Libra differs from Bitcoin

 

Buyer beware: How Libra differs from Bitcoin

Recent revelations about the lack of privacy protections in place at the companies involved in Facebook’s new Libra crytocurrency raise concerns about how much trust users can place in Libra. (Shutterstock)

Courtesy of Alfred Lehar, University of Calgary

Facebook, the largest social network in the world, stunned the world earlier this year with the announcement of its own cryptocurrency, Libra.

The launch has raised questions about the difference between Libra and existing cryptocurrencies, as well as the implications of private companies competing with s...



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Digital Currencies

Buyer beware: How Libra differs from Bitcoin

 

Buyer beware: How Libra differs from Bitcoin

Recent revelations about the lack of privacy protections in place at the companies involved in Facebook’s new Libra crytocurrency raise concerns about how much trust users can place in Libra. (Shutterstock)

Courtesy of Alfred Lehar, University of Calgary

Facebook, the largest social network in the world, stunned the world earlier this year with the announcement of its own cryptocurrency, Libra.

The launch has raised questions about the difference between Libra and existing cryptocurrencies, as well as the implications of private companies competing with s...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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The Technical Traders

Is A Price Revaluation Event About To Happen?

Courtesy of Technical Traders

Skilled technical traders must be aware that price is setting up for a breakout or breakdown event with recent Doji, Hammer
and other narrow range price bars.  These types of Japanese Candlestick patterns are warnings that price is coiling into
a tight range and the more we see them in a series, the more likely price is building up some type of explosive price breakout/breakdown move in the near future.  The ES (S&P 500 E-mini futures) chart is a perfect example of these types of price bars on the Daily chart (see below).

Tri-Star Tops, Three River Evening Star patterns, Hammers/Hangmen and Dojis are all very common near extreme price peaks and troughs.  The rea...



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Kimble Charting Solutions

India About To Experience Major Strength? Possible Says Joe Friday

Courtesy of Chris Kimble

If one invested in the India ETF (INDA) back in January of 2012, your total 7-year return would be 24%. During the same time frame, the S&P 500 made 124%. The 7-year spread between the two is a large 100%!

Are things about to improve for the INDA ETF and could it be time for the relative weakness to change? Possible!

This chart looks at the INDA/SPX ratio since early 2012. The ratio continues to be in a major downtrend.

The ratio hit a 7-year low a few months ago and this week it kissed those lows again at (1). The ratio near weeks end is attempting to...



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Insider Scoop

10 Biggest Price Target Changes For Friday

Courtesy of Benzinga

  • Credit Suisse raised IHS Markit Ltd (NYSE: INFO) price target from $68 to $76. IHS Markit shares closed at $67.75 on Thursday.
  • Wedbush boosted Restoration Hardware Holdings, Inc (NYSE: RH) price target from $170 to $185. RH shares closed at $169.49 on Thursday.
  • Mizuho lifted Seagate Technology PLC (NASDAQ: STX) price target from $46 to $50. Seagate shares closed at $52.94 on Thursday.
  • UBS raised the price target for Weight Watchers Intern...


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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Biotech

The Big Pharma Takeover of Medical Cannabis

Reminder: We are available to chat with Members, comments are found below each post.

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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