It is high time I packed it in. I have been doing the capital markets and economic stuff for 55 years.
- 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 !!!
Monday, March 08, 2021
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