Archive for category Monthly Strategy
Monthly Strategy – July 2010
Posted by Belisarius in Monthly Strategy on July 3, 2010
Almost unchanged from June.
Equities
Only extremely favorable economic data could change the negative trend established. This is highly unlikely. So I would say we will soon see S&P 500 at 875.
On a macro level, the stimulus is wearing off, politicians and central bankers are not ready to continue with loose fiscal an monetary policies, just the opposite, austerity is the game. For now.
Private demand is weak. Private investments also show no strength. Real-estate is burdened with unsustainable debt levels, still to high prices and weak demand. Without real-estate investment recovery, we cannot talk on sustainable and historically high economic growth rates.
Monthly Strategy – June 2010
Posted by Belisarius in Monthly Strategy on June 9, 2010
Little late…but better late then never…
Equities
Only extremely favorable economic data could change the negative trend established. This is highly unlikely. So I would say we will soon see S&P 500 at 900.
On a macro level, the stimulus is wearing off, politicians and central bankers are not ready to continue with loose fiscal an monetary policies, just the opposite, austerity is the game. For now.
Private demand is weak. Private investments also show no strength. Real-estate is burdened with unsustainable debt levels, still to high prices and weak demand. Without real-estate investment recovery, we cannot talk on sustainable and historically high economic growth rates.
Monthly Strategy – May 2010
Posted by Belisarius in Monthly Strategy on May 5, 2010
Equities
With my 1,200 S&P 500 target reached I’ve moved to a kind of a ambiguous stance to the markets. Now I believe the equity markets are bound for a 10%+ down move at least.
My mid-term view remains unchanged – this is just a bear market rally; U.S. and E.U. economies will experience same patterns in both economy and markets as Japan in ‘90ies.
Recent pickup in consumer spending was due to decreased savings rate, not income growth, so I believe it is unsustainable mid term. The inventory cycle has ran its course, government stimulus is wearing off. A slower GDP growth is almost certain for the second half of the year.
Monthly Strategy – April 2010
Posted by Belisarius in Monthly Strategy on April 1, 2010
Equities
Although I’m convinced that the economy is not pulling a V-shaped almost everywhere except in China and in their commodity based economy satellites I believe that in the short term the equity gains will continue. I have a 1200 S&P 500 target.
I have only a small exposure to the markets (via a June SPY 105/106 put ratio backspread) to keep interest for the markets. It’s performing bad.
My mid-term view remains unchanged – this is just a bear market rally; U.S. and E.U. economies will experience same patterns in both economy and markets as Japan in ‘90ies.
Monthly Strategy – March 2010
Posted by Belisarius in Monthly Strategy on March 1, 2010
Equities
In the macro arena we have leading indicators rolling over, and a stream of worse-than-expected data pieces on U.S. housing, U.S. employment, U.S. durable goods ordered and large move lower by consumer confidence.
Seems that the markets do not appreciate the data. Things that move the markets are only FED policy on rates, dollar strength and Greece debt problems. China credit tightening in forgotten for the time being (at least to the next announcement).
Monthly Strategy – February 2010
Posted by Belisarius in Monthly Strategy on February 1, 2010
Equities
We have seen a meaningful correction in equities in recent couple of weeks, we have a market that fails to react to presumably good news, we have low levels of cash in equity mutual funds and still high number of bulls; high beta stocks suffered massively; For me this is a setup for reversal, I expect further short term losses.
My mid-term view remains unchanged – this is just a bear market rally; U.S. and E.U. economies will experience same patterns in both economy and markets as Japan in ‘90ies.
Monthly Strategy – January 2010
Posted by Belisarius in Monthly Strategy on January 2, 2010
Equities
Equity performance was impressive in recent month, down to the last trading day of the year. Thursday trading showed that the investors are not so confident that the upside will continue, revealing, maybe a moment of truth. Everybody is long because of fear not to miss further gains, but scared of a potential slip.
The new regulation for real-estate developer land purchases in China; slowing credit growth and Rusal IPO which could capture excess cash which is fueling the rally and serve as a sort of a global wide correction catalyst.
Monthly Strategy – December 2009
Posted by Belisarius in Monthly Strategy on December 2, 2009
I am starting a monthly strategy overview to have my strategy in one place and a to test accuracy of my views. Written revisions and accommodations would also contribute to my investment discipline.
Equities
I have been surprised by the market strength as the market rejected the Dubai turmoil as a correction catalyst. This has substantially changed my views on the markets. The belief (in my view incorrect) that the economy will start recovering at average post recovery rates is strong. The Dubai spurred correction has only proved to be a buying opportunity. Because of that I wouldn’t exclude S&P 500 moving ahead of 1200 points. I would also expect short-term equity strength on both global and emerging markets level.