Tudor Jones and Powell’s Little Big Horn

In June 1876 several hundred men, led by an overly confident Lt Colonel George Armstrong Custer, 7th Calvary Regiment of the U.S. Army, rode into an area in what is now southern Montana near the Little Big Horn river.

They engaged an Indian village there and grossly underestimated the strength of their opponent. They ran into several thousand, very unhappy Lakota Sioux and Cheyenne Indians.

In what is now known as Custer’s Last Stand, Lt. Colonel Custer and about 210 of his men, were completely overwhelmed and wiped out.

Legendary hedge fund manager Paul Tudor Jones spoke to Goldman Sachs last week.  Mr. Jones is the founder of Tudor Investment Corporation, one of the oldest and best known hedge funds in the industry.

He touched on several topics with Goldman Sachs including inflation, interest rates, bonds, the tax cuts, market volatility, central banks, and the stock market. Continue reading

When Fear Runs Amok in the Stock Market

The break in the stock market starting January 29 thru the low on Feb 9th stunned a lot of people.  I remember watching CNBC’s Closing Bell and I honestly thought that at one point Kelly Evans was going to lose it. You could just feel the fear.

It was Monday February 5th when the Dow Jones Industrial Average (DJIA) was down nearly 1600 points at its low before closing down 1,175 points. We had not seen this kind of selling in a long time as the market has been in a trance of low volatility, no fear, passive investing.

We’ve had a few bouts of intense selling in August – October 2015, August – October 2011  and certainly in 2008.  But that two week downdraft was one of the more intense since 2008. So how bad can it get when fear runs amok? Continue reading

Global Sell-off in Stocks as Volatility Explodes

This week the Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) experienced their biggest drops in years especially if you look at the lows for the week.  But this was not just a sell-off in the United States, there was also a significant global sell-off underway.

In the world’s second largest economy, China, the Shanghai Composite was down big for the second week in a row. It dropped 332.23 points or 9.6% and shattered a 2 year uptrend line.

China’s Shenzhen Composite dropped 142.267 or 7.8%.  It closed the week at the lowest level since September 18, 2015.  Over the last 2 weeks it has dropped 13.9%.

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Stock Market Woke Up…Something Changed

Friday February 2nd was Ground Hog Day in the United States.  The stock market woke up…something changed.  But it wasn’t just the stock market in the United States, it was happening around the globe.  But first back to the famous ground hog, Punxsutawney Phil.

Punxsutawney Phil saw his shadow and there’s suppose to be six more weeks of winter.  In honor of this day, I watched the Bill Murray movie, Ground Hog Day.

Something Changed

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FOMO is Surging…Think the Opposite

The Fear of Missing Out (FOMO) is gripping the stock market big time.  I just saw a report that Bank of America Merrill Lynch’s indicator that measures money flow into the stock market, is giving a sell signal. This proprietary indicator measures the cash flowing into the stock market…stocks, ETFs, mutual funds.

It’s a great feeling watching your stock or ETF tick up every day, every week. It’s exciting and makes you feel really good. Continue reading