Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Beef may be back on the menu within the 1st quarter.
After looking around at a few risk ratios I haven’t looked at in a while and given recent developments in price action, I think there is more cause for concern here than many think.
I have reason to believe that Mr. Market is lying to us.
What if I told you there is a ‘no risk’ investment that will out perform the S&P 500, even assuming the S&P 500 will continue upward at the pace it has over the second half of 2014? Would you buy that investment?
Then consider owning cash, if you are a US resident denominated in USD. Very simply, SPX in USD units has been declining since the middle of the year, with the weekly trend by AROON having gone negative and what looks like a topping pattern forming.
As you can see from a comparison of the following two percentage gained/lost graphs of the 9 Major Sectors (plus the SPX), (the timeframe on the first graph is year-to-date, and on the second is this past week), market participants ventured into the “riskier” sectors to add more risk this week.
The second graph shows that Energy and Materials contributed substantially to the lift in equities this week…look for that trend to either continue, or reverse, if commodity prices begin to plunge again. (more…)
Although we often hear (or read) the words “diversified” and “portfolio” together, we should question if it is really true that an investment portfolio can really be well diversified.
To speak about diversification, we first need to speak about “correlation”. When it comes to correlation, our creed can be summed up in a statement once made by Ray Dalio of Bridgewater Associates:
“People think that a thing called correlation exists. That’s wrong. What is really happening is that each market is behaving logically based on its own determinants, and as the nature of those determinants changes, what we call correlation changes”. (Jack D. Schwager, “Hedge Fund Market Wizards, How Winning Traders Win”, Wiley 2012) (more…)
