Stocks Way Up, Volatility Way Down: Should We Be Alarmed?

11/30/-1  Author: Dr. JoAnne Feeney, Portfolio Manager

After a brief (and small) spike in volatility around the election, the S&P 500 volatility index (VIX ©) has fallen fairly steadily and we now find ourselves back in a period of relative calm, last seen in the fall of 2014. Investors should presume it won’t last. Shortly after that 3-year lull, volatility poked its head up occasionally and with greater vigor as Greece, China, and other concerns dominated the Read More...

Now is when value really Shines

11/30/-1  Author: CBS Market Watch, Feb 17, 2017

By Mark Hulbert Market Watch February 17, 2017 CHAPEL HILL, N.C. — If you’ve ever wanted to tilt your portfolio toward value stocks, the next 75 days may be your best chance over the next four—and maybe eight—years. I’m referring to out-of-favor stocks that are trading for low prices relative to their companies’ underlying net worth. They are to be contrasted with issues at the opposite end of the spectrum—so-called Read More...

Why We Like Tech, Consumer Discretionary but Hate Brick and Mortar Retail

11/30/-1  Author: Dr. JoAnne Feeney, PM, February 21, 2017

The US recovery has been well short of dazzling, but the economy has enjoyed modest GDP growth (1.9% for Q4), rising employment (227,000 jobs added in January, up from the 4Q monthly average of 148,000), and a low unemployment rate (now at 4.8%). At least at the aggregate level, the US economy is following a resilient, if not terribly exciting, expansion path. If we look under the hood, both firms Read More...

Tariffs, with Some Guesswork

11/30/-1  Author: Dr. Charles Lieberman, Chief Investment Officer

The Chicken Littles of the world expect a wholesale imposition of tariffs on imported products into the U.S. to set off a trade war that badly hurts the global and domestic economy. This is possible, but highly unlikely, given the lessons learned in the 1930s and widely accepted economic theory that favors free trade. It is just typical fear mongering. But, a border equalization tax, BET, seems likely to be Read More...

The Drug Price Misconception

11/30/-1  Author: David Lieberman, Portfolio Manager

In 2015 Martin Shkreli’s Turing Pharmaceuticals increased the price of an anti-malaria drug, Daraprim, by 5,000%, which was understandably met with widespread anger and triggered a backlash for drug prices more generally. But this anger was and remains misdirected. A vast majority of drugs have experienced price deflation and we must isolate generic price deflation from the news grabbing price increases that the media likes to write about to best Read More...

Logical Inconsistency

11/30/-1  Author: Dr. Charles Lieberman, Chief Investment Officer

Senior Fed officials, notably including a number of Fed doves, have been commenting repeatedly in recent weeks how undesirable it would be for an expansionary fiscal policy to be implemented right now by the new Trump Administration. However, this newly revealed view is totally inconsistent with the Fed’s position that the labor market is not tight and that there remains meaningful scope for additional expansion. For quite some time, the Read More...

Trump Dominates, But the World is a Big Place

11/30/-1  Author: David Lieberman, Portfolio Manager

Since the US election, the focus of the world has been on President-elect Donald Trump. Trump commands tremendous attention because of his tweets and personality and this has taken focus away from the news flow in the rest of the world. But the rest of the world remains a driver of the US markets and also contributes to the US economy. Data from most countries around the world is improving. Read More...

Adjusting Expectations

11/30/-1  Author: Dr. Charles Lieberman, Chief Investment Officer

The growing scarcity of labor is now slowing the pace of hiring, but adding to upward pressure on labor costs, which will soon flow through into price inflation. For those wondering when the economy might reach full employment and start generating inflation, evidence is mounting that we have already passed that critical point. Ongoing job growth will only reinforce this growing trend, so stimulative policies would now be unnecessary and Read More...

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