Green Book March 2021
Bureaucratic Bull
Twenty-one years ago, the bullish bets were on publicly-traded businesses (especially ones with dot-coms after their names). In contrast, today’s bulls seem more beguiled by bureaucrats—the central bankers who, having saved markets and the economy from catastrophe in the last year, are assumed to have mastered the business cycle.
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Featured Articles
If You Like TINA, You Should Love “SAMARA!”
Equity investors have had a multi-year love affair with TINA—the belief that “There Is No Alternative” to stocks in a world of ridiculously-low interest rates. This TINA romance has carried on so long that the S&P 500 is nearing valuations last seen in the Tech bubble’s final inning. If the fling with TINA has become prohibitively expensive, we’d like to introduce “SAMARA.”
A “New-Era” Look At The Future
Young readers sometimes give us a not-so-subtle roll of the eyes when we discuss any sort of stock market history that occurred before their date of birth, but it takes experience to appreciate that “there’s nothing new under the sun—least of all in the stock market.”
Reflation Trade Or Real-Yield Tantrum?
The market focus has started to shift from a reflation trade to a real-yield tantrum. We compare the latest real-yield tantrum with four prior episodes where rate increases were driven by higher real yields, while breakeven rates were flat to lower: 2005, 2013, 2015, and 2018.
The Discretionary Divide—An Earnings-Season Update
We revisit the great divide that has emerged between companies and entire industries over the course of the past year. The fragmentation is, of course, the result of companies/industries that benefited from the pandemic environment, and those that were adversely affected.
Short Performance And Short Interest Both Revert
The Reddit-driven January performance of heavily-shorted stocks reversed in February, but not nearly enough to reverse all the previous gains.
Newfound Popularity Of Thematic ETFs
We’ve noticed a small segment of equity ETFs, designated as “thematic,” that is increasingly gaining popularity. Thematic ETFs invest in baskets of stocks that share narrowly-defined business enterprises outside of the standardized GICS methodology.
Table of Contents
Stock Market
- Newfound Popularity Of Thematic ETFs
- Bureaucratic Bull
- Ruminations On The Fed, Past And Present
- More On The “Rate-of-Change” In Rates…
- Higher Prices Shouldn’t “Surprise” Us
- NOPE And NOPE!
- A “New-Era” Look At The Future
- If You Like TINA, You Should Love “SAMARA!”
- Small Caps: It’s Still Early
- Bond Yields “Take Down” An Old Favorite
- Lever Up!
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
Portfolios
Major Trend
Estimating the Downside
At Random
If You Like TINA, You Should Love “SAMARA!”
Equity investors have had a multi-year love affair with TINA—the belief that “There Is No Alternative” to stocks in a world of ridiculously-low interest rates. This TINA romance has carried on so long that the S&P 500 is nearing valuations last seen in the Tech bubble’s final inning. If the fling with TINA has become prohibitively expensive, we’d like to introduce “SAMARA.”
A “New-Era” Look At The Future
Young readers sometimes give us a not-so-subtle roll of the eyes when we discuss any sort of stock market history that occurred before their date of birth, but it takes experience to appreciate that “there’s nothing new under the sun—least of all in the stock market.”
Reflation Trade Or Real-Yield Tantrum?
The market focus has started to shift from a reflation trade to a real-yield tantrum. We compare the latest real-yield tantrum with four prior episodes where rate increases were driven by higher real yields, while breakeven rates were flat to lower: 2005, 2013, 2015, and 2018.
The Discretionary Divide—An Earnings-Season Update
We revisit the great divide that has emerged between companies and entire industries over the course of the past year. The fragmentation is, of course, the result of companies/industries that benefited from the pandemic environment, and those that were adversely affected.
Short Performance And Short Interest Both Revert
The Reddit-driven January performance of heavily-shorted stocks reversed in February, but not nearly enough to reverse all the previous gains.
Newfound Popularity Of Thematic ETFs
We’ve noticed a small segment of equity ETFs, designated as “thematic,” that is increasingly gaining popularity. Thematic ETFs invest in baskets of stocks that share narrowly-defined business enterprises outside of the standardized GICS methodology.
Stock Market
- Newfound Popularity Of Thematic ETFs
- Bureaucratic Bull
- Ruminations On The Fed, Past And Present
- More On The “Rate-of-Change” In Rates…
- Higher Prices Shouldn’t “Surprise” Us
- NOPE And NOPE!
- A “New-Era” Look At The Future
- If You Like TINA, You Should Love “SAMARA!”
- Small Caps: It’s Still Early
- Bond Yields “Take Down” An Old Favorite
- Lever Up!