Volatility

22 Jan

AAL might be a big value – but it looks more like a big value trap

Yesterday, I wrote about news over the weekend that winter storms had resulted in more than 1,100 cancelled flights out of Chicago. Another report indicated that from the Midwest to New England, total cancelled flights were more than 2,000 over the course of the weekend. The market was closed yesterday, so the first opportunity the market is going to have to react to this news is today. Don’t be surprised, however if airline stocks in particular are among the most volatile in the market through the entire week. More →

By Thomas Moore Airline Industry Fundamental Analysis Investiv Daily Risk Transportation Value Investing Value Traps Volatility
21 Dec

This is what the beginning of a bear market looks like

In the last week, bearish momentum has really started to pick up. This entire year has been punctuated by volatility driven by uncertainty, but it’s really only since late November that the overall market tone has actually started to turn negative. That fact has finally come to bear this week, forcing the S&P 500 below an important support level near its yearly lows around 2,600. Until this week, the market had managed to hold up pretty well in correction territory, using that support to bounce and move higher on multiple occasions – until now. More →

By Thomas Moore Investiv Daily Market Forecast Market Forecast Risk S&P 500 Technical Analysis Volatility
23 Oct

GILD is deeply undervalued – it it a good play in the current market?

One of the legitimate challenges any investor faces when market tension is increasing is how far do you go to keep buying stocks when the market looks more and more like it could be reaching the kind of “sea change” turning point that could mark the beginning of a new bear market. There really isn’t a single correct, or best answer to that question; some of the most famous and successful value investors in the market, including Warren Buffett are well-known to keep buying stocks even when the rest of the market is actually going down. More →

By Thomas Moore Biotechnology Investiv Daily Pharmaceutical Sector Risk Value Investing Volatility
22 Dec
How Will You React To Volatility?
What will you do if volatility increases in 2018?

Your behavior and risk appetite is more important than what will happen with stocks.

We’ll discuss many strategies so you can find the one that will help you sleep well.

Introduction

We are currently in an environment of extremely low volatility and extremely high complacency. The S&P 500 is up 20% year to date, the economy is doing well, and it all seems perfect.

No one knows if 2018 will be similar and therefore the only thing one can do is to have a plan of action prepared for any kind of scenario. Today, we’re going to discuss how to be prepared for an increase in volatility. More →
By Sven Carlin Investing Strategy Investiv Daily Volatility
27 Jul
The Truth About The VIX
The VIX is especially liked by the media because it’s based on what has happened. However, the VIX has no forecasting power.

We’re looking at an historically low VIX which indicates a complacent market, this creates cheap downside protection for those who fear a fall.

Nevertheless, there are interesting opportunities to take advantage of the low VIX for the brave.

Introduction

We constantly hear news about the VIX index. However, few really know how the VIX index is derived, what its importance is in the financial world, and if it even has an influence on your portfolio. As the VIX index is at all-time lows, it’s a good time to discuss what it is and if there is an opportunity to take advantage of it. More →
By Sven Carlin Investiv Daily Volatility
19 May
What Three Chinese Companies Tell Us About The Risks You Need To Watch For In Emerging Markets
Proper due diligence is needed to separate low risk from high risk investments.

The fact is, nobody does their research anymore as ETFs and index funds have taken over the investment world.

I’ll describe a few Chinese investments that look amazing at first but can easily lead to a total loss.

Introduction

Yesterday we talked about how emerging markets are generally becoming attractive. Today we’ll discuss a few Chinese stocks that show some of the risks lying in such a market.

As I see the S&P 500 climb to new highs, I understand that risk isn’t what investors think about, but my experience that spans a few market cycles keeps me focused on the risks while investing.

By risk I don’t mean short term volatility coming from market sentiment. The S&P 500 hasn’t been volatile at all in the last 8 years as it has just gone up, but for every point that it goes up while corporate earnings remain flat, the risk investors are taking gets higher. More →
By Sven Carlin China Emerging Markets International Diversification Investiv Daily Volatility
10 May
The Trouble The Market Refuses To See
GDP growth is at three year lows, car sales have dropped 11%, and the biggest sector contributing to new employment is about to go into oversupply.

The FED is in a stalemate situation. It should raise interest rates and deleverage, but it’s already too late as the economy, government, and population is hooked on low interest rates.

Introduction

The market’s behavior reminds me of the three wise monkeys. One doesn’t see, the other doesn’t speak, and the third doesn’t hear. The VIX index, a measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices, indicates that investors expect stability and didn’t even react to the bad news coming from the automotive industry, jobs, and a very important bankruptcy. More →
By Sven Carlin Auto Industry Interest Rates Investiv Daily Jobs Report US Economy Volatility
01 May
What You Can Learn From Under Armour
There’s a divergence between Under Armour’s fundamentals and its stock price.

Every growth story is bound to end or at least slow down at some point, and at that point the stock usually gets hammered.

However, sentiment must not be underestimated as an $0.03 earnings beat can send the stock up 10%.

Crazy Stock Movement

Under Armour’s (NYSE: UAA, UA) stock has had a wild ride in the last four years. It went from $12 in 2013 to highs above $50 in 2015 only to fall to the current lows around $19. More →
By Sven Carlin Investiv Daily Retail Under Armour Valuations Volatility
28 Dec
2017 Looks Like Another Excellent Trading Year
Rebalancing your portfolio between sectors and markets should lower your risks and increase your returns in 2017.

2016 is an excellent example of how such a strategy works when the general stock market is overvalued.

Things like avoiding REITs in August 2016 or entering metals will be easy to spot and act upon, even in 2017.

Approaching The Current Market Risk Reward Puzzle

A recent Wall Street Journal article raised the question of whether investors looking to get into the market now are too late for the Dow 20,000 party. Many investors watched the 7-year stock bull market from the side-lines after they got burned during the latest financial crisis and didn’t overcome their anxiety and invest again. The article suggested that investing now is a good thing to do if you are a long-term investor. More →
By Sven Carlin Banks Bear Market Bull Market Commodities Investing Strategy Investiv Daily REITs Stocks Volatility Zinc
13 Oct
How To Spot The Big Trends Of The Future
In the short term, the market is heavily influenced by new information and noise.

In the long term, there are clear trends that can give you an edge to beat the market.

We’ll discuss a few trends that are clear but that will take time to develop.

Introduction

Some argue that the market is efficient and prices always reflect available information. The Efficient Market Hypothesis (EMH) was developed by Chicago School of Economics Professor Eugene Fama who was also awarded a Nobel prize for his findings in 2013. Implications of the EMH are that it is impossible to beat the market consistently on a risk-adjusted basis since market prices only react to new information or changes in discount rates. More →
By Sven Carlin Commodities Efficient Market Hypothesis Gold Investiv Daily Oil Robert Shiller Stocks Volatility