MSCI accepts China A-shares

By | 2017-06-21T10:25:10+00:00 June 21st, 2017|Categories: Market Strategy Report|

After three years of rejection, MSCI has finally accepted China A-shares into its bellwether emerging markets index. http://www.reuters.com/article/us-msci-indexes-idUSKBN19B325?il=0 The move will be gradual, however, and broader demand for A-shares seems already priced in. We note that the best rallies in [...]

Jeremy Grantham throws in the mean-reversion towel…

By | 2017-06-20T12:57:09+00:00 June 20th, 2017|Categories: Market Strategy Report|

After decades of preaching profit margin reversion, GMO’s Jeremy Grantham just recanted (pp. 9-16). His first-order evidence is presented in Chart 1 below. Something is obviously different about “new era” valuations. Chart 1. Higher and briefer valuation troughs   Grantham [...]

Don’t overthink market volatility – part 2

By | 2017-05-19T10:30:32+00:00 May 19th, 2017|Categories: Market Strategy Report|

Does Wednesday’s volatility spike vindicate those predicting an important market top based on super-low volatility?  Not by historical experience.  The chart below flags super-calm markets over the past century.  There are too many false flags for a positive assertion. So [...]

Don’t overthink market volatility…

By | 2017-05-18T11:17:10+00:00 May 18th, 2017|Categories: Market Strategy Report|

Now I’ve heard everything.  Mark Mobius says low market volatility is tied to social media: Social media is having a huge impact,” the executive chairman of Templeton Emerging Markets Group said in an interview during a visit to Tokyo. “It’s creating confusion [...]