- Peter Richardson
- Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!
Thursday, January 21, 2021
Monday, November 16, 2020
The variety of directional market indicators I follow point positive for the SPX. But there are
also signs that the market is high both on technical and fundamental grounds. The SPX is
getting very overbought for the intermediate term, is quite overvalued, and is getting hyper-
extended when viewed on a very long term basis. So, if you are trading or investing, be
aware that you playing in a very effervescent and expensive market. The rapid acceleration
of Covid cases may well do more economic damage well into next year and could lead to
some extensive volatility in the market. The news on the Covid vaccine front sounds terrific,
but even with high efficacy and broad distribution, the economy will take time to regain
solid footing. Even if SPX net per share were to hit new high ground of $200 by 2022,
the market is hardly on the bargain table at an assumed p/e of 18.1x. Moreover, a
broader and stronger economy by late next year may bring significant inflation
pressure and rising bond yields. These latter developments could crimp the market p/e
even if the Fed keeps short rates low to accomodate a move to fuller employment.
I am on the sideline now and it would take a substantial correction to get me interested in
a long side trade. I sure as hell did not see the "blue wave" I was hoping for, and I think
the popular view of political gridlock will turn out to prove disappointing for the economy
and investors. If the Dems do not sweep the senate run-offs in Georgia, times could turn
very frustrating for a guy like me as I believe the economy needs a substantial overhaul
if the US is to do well in the years ahead.
Sunday, November 01, 2020
Sunday, September 13, 2020
Sunday, August 30, 2020
Well, they have gone out and done it this time. A super easy Fed with help from generous fiscal policy has allowed monetary liquidity to balloon to 40% yr/yr, a historic record. with the economy still depressed, the velocity of money has tanked with the extra liquidity flowing to the financial and capital markets. What's more the Fed is now apparently willing to have inflation move up over the longstanding target to foster a stronger labor market and put an end to the deflation pressure created by the rapid decline in the economy during the Covid lock down phase. Normally,with this kind of stimulus, the US economy would surge for a bit, but with the longer term potential of the economy inherently modest, the eventual recovery of money velocity will primarily reflect higher inflation. If so, we will eventually see higher bond yields, a reduced SPX p/e ratio, and, perhaps a lower value for the USD.
Saturday, July 18, 2020
production have bounced back sharply, and my profits indicator, although still negative on a yr/yr
basis, is improving. Unfortunately, initial claims for unemployment insurance is still running at
an awful 1.3 mil. a week. From a Covid-19 perspective, the economic reopening has been a
disaster, featuring a sharp run-up in both cases and deaths. In states across the south and west,
health delivery systems are being sorely taxed with the risk of humanitarian issues on the rise in
spots like GA, FL, TX and AZ. The rise in cases may well partly account for the rise in claims.
Across the US, many localities face risky school autumn openings because cases are rising
and testing and contact tracing have become less useful. I am not about to speculate on whether
the virus is practically out of control and whether efforts to tame it will cause additional and
substantial economic damage. So, I would not care to speculate on how well the economy and
the markets will do over the next few weeks and months. The sheer large number of dumbfucks
both in office and among the public have cost us dearly health-wise and we can only hope that
common sense will regain more footing.
The intermediate term trend indicators remain positive for the SPX. It has been range-bound for
a short period of time. The SPX is currently moderately overbought at a 6.5% premium to its
40 wk. m/a. SPX Weekly
Monday, June 22, 2020
On balance, the US economy is showing a degree of recovery from deeply depressed levels.
Retail sales have come back nicely and output levels have moved up some. My profits ahead
indicator reads -15.4 which is awful but not as bad as at the bottom in 2009. My business strength
indicator (BSI) is a lowly 107.9, which also exceeds the bottom in 2009 (A sound, healthy BSI
runs 140 -145). It remains very concerning that nearly 25 million people have lost their jobs and
that more recent data suggests that more upscale employees are being laid off. As the economy
continues to re-open, many more workers will be recalled, but the upscale earning jobs that are
lost will be very slow to comeback. There is huge slack in the economy, and even though raw
materials prices have been recovering, deflationary and default pressures will continue for a
while. The Fed remains just about fully accomodative, but Congress is juggling the ball here
on fiscal policy with an off-chance there could be a fuck up later this summer. So far, market
players have been letting the 2020 national election ride.
The recovery uptrend from late Mar. was broken on a correction of a sharp overbought and the
SPX is now in a downtrend which is so early as to be inconclusive. The market is mildly over-
bought against the 200 day m/a, and the negative rollover in MACD bears watching. The
continued high VIX reading implies more volatility. DailySPX