Mon 10.31.11

Saw this from Oppenheimer that puts into perspective how much of a rally that October experienced. Even with today's sell-off, it would put this month as one of the best months ever.

Thurs 10.27.11

It looks like due to the European bailout, we are "risk-on" again. Well, it looks like there's a good reason to join the bulls on this, as it shows that Europe doesn't have the same political problems that the US has, or if they do have these problems, they will at least work with each other for the better good. I still have my doubts that European banks will be able to go out into the market and raise 106 billion euros of capital, but all that matters is that for the time being, we can quit focusing on Europe and start focusing back at the US structural problems (eg no job growth)
Also, it will be interesting to see what the ISDA says about whether this triggers an event thereby making credit default swap payments. If this triggers CDS, we should know pretty quickly who's holding the risk.

Wed 10.26.11

Forget the noise and look to jobs if you want to see this economy flourish. I still believe Europe's problems will eventually take the US Dow back down into the 10,000's, but I'm all for this bullishness that we are seeing in the US markets.....my problem is that this smells like a bear rally, and not a bull rally, but only time will tell. There's a lot of excess liquidity out there and some investors are willing to take a chance as the so-called "safe havens" are yielding practically nothing, but once again I'd be wary....

Tues 10.25.11

Found this piece of research from InvestTech Research interesting. Going back to 1960, had you only invested in the S&P 500 from Nov 1st - April 30th, you would have captured 97% of the S&P 500's absolute market's performance

Here are the specifics of seasonality: Imagine we start with two $10,000 accounts, and use them to make investments in an S&P 500 Index fund. One account invests in one 6-month period, the other invests in the remaining 6-month period. Account A is invested from November 1st through April 30th each year, while Account B is invested from May 1st through October 31st. Here are the numbers: • Account A portfolio grew from $10,000 to over $438,967. That is a 42-fold increase. • Account B portfolio barely doubled to $22,659. By selecting the seasonally strong period from November through April, you capture 97.1% of the available performance over the past 52 years. (Note the November-April seasonality fared poorly in 2007 and 2008). > Source:InvesTech Research, October 21, 2011 Technical and Monetary Investment Analysis, Vol11 Iss11